Macy’s Q4 earnings: future outlook disappoints

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on Feb 27, 2024
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  • Macy's reported its financial results for the fourth quarter on Tuesday.
  • Here's what its CEO Tony Spring said in a press release today.
  • Macy's stock is trading down following the earnings print this morning.

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

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Macy’s stock down on muted guidance

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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:

Our portfolio, healthy balance sheet and fortified operations position us to execute A Bold New Chapter. This strategy is designed to create a more modern Macy’s, Inc. that is expected to generate meaningful value for our shareholders in the years ahead.

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

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  • 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:

Throughout the fourth quarter, we delivered an improved omnichannel experience, with effective merchandising and a clear demonstration of value that resulted in a strong close to the year.

What else was noteworthy?

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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.

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