Macy’s swings to loss in Q2: ‘we take a cautious view of the consumer’

Macy’s Inc (NYSE: M) ended 15% down on Tuesday even though its adjusted per-share earnings came in well ahead of Street estimates in its second financial quarter.

Macy’s did not lift its future guidance

Despite beating expectations in the recently concluded quarter, the chain of department stores refrained from raising its full-year guidance.

It continues to see up to $23.2 billion in revenue in fiscal 2023 on $2.70 to $3.70 of adjusted EPS, as per the press release. According to CEO Jeff Gennette:

Macy’s stock is now trading at a year-to-date low.

Macy’s Q2 financial highlights

• Swung to a net loss of $22 million that translates to 8 cents a share
• Had $275 million of net income in the same quarter last year
• Adjusted EPS printed at 26 cents as per the earnings press release
• Total revenue sunk just over 9.0% year-on-year to $5.28 billion
• FactSet consensus was 14 cents a share on $5.26 billion in revenue

Macy’s saw its inventories recoil 10% in the second quarter. CEO Gennette said today on CNBC’s “Squawk on the Street”:

What else was noteworthy?

Macy’s reported an 8.2% year-on-year hit to quarterly comparable sales at its owned store on Tuesday.

Its gross margin contracted 80 basis points to 38.1% in Q2. But the Chief Executive added:

Note that Macy’s saw its brick-and-mortar as well as digital sales decline year-on-year in the second quarter. The former plunged 8.0% and latter 10%. Still, CEO Jeff Gennette said:

On Tuesday, Macy’s also revealed plans of opening four new smaller shops.