Macy's Q4 earnings: future outlook disappoints

Macy’s Inc (NYSE: M) is trading down in premarket on Tuesday even though it reported better-than-expected earnings for its fourth quarter. 

Macy's stock down on muted guidance

Shareholders are concerned also because the retailer issued muted future guidance. Macy’s now forecasts its revenue to fall between $22.2 billion and $22.9 billion in fiscal 2024.

Analysts, in comparison, were at $2.77 billion. Tony Spring - the chief executive of Macy’s said in a press release today:

The department store chain expects up to $2.85 of adjusted per-share earnings in the first quarter. Wall Street currently has a consensus “hold” rating on $M. 

Macy's Q4 earnings snapshot

• Lost $71 million that translates to 26 cents
• Had $508 million of net income ($1.83 a share) last year
• Adjusted EPS printed at $2.45 as per the earnings report
• Revenue went down 1.7% year-over-year to $8.1 billion
• Consensus was $1.96 a share on $8.15 billion in revenue
• Gross margin improved 340 bps to 37.5% in Q4

Macy's ended its financial 2023 with inventory up 2.0% on a year-over-year basis. CEO Spring also said on Tuesday:

What else was noteworthy?

On Tuesday, Macy's also announced plans of closing 150 of its underperforming stores and prioritising luxury brands as part of its turnaround strategy.

The retailer also lowered its headcount by 3.5% last month that saw about 2,350 of its employees lose jobs. $M is currently up roughly 70% versus its low in mid-November.