Macy’s Turns Profitable in Q4 Despite Net Sales Decline
Macy’s Inc., continuing to invest in its best stores while shedding poor performing locations, showed progress in the fourth quarter of fiscal 2024 by turning profitable and posting a small comparable sales gain.
Net income for the fourth quarter ended Feb. 1 was $342 million, or $1.21 per diluted share, compared to a loss of $128 million, or $0.47 per diluted share in the year-ago period.
Operating income rose to $500 million, from a loss of $149 million in the year-ago period.
Adjusted earnings before interest, taxes, depreciation and amortization, which excludes charges associated with restructurings, impairment and settlements, reached $903 milion versus $1.1 billion in the year-ago period.
Net sales decreased 4.3 percent to $7.8 billion, though comparable sales were up 0.2 percent on an owned, licensed and marketplace basis. It’s widely believed that Americans are curtailing their spending due to the nation’s persistent inflation, high living costs and concerns about the impact of new tariffs implemented on China, Canada and Mexico by the Trump Administration this week. It should also be noted that the fourth quarter of fiscal 2024 included 13 weeks, while the fourth quarter of fiscal 2023 had 14 weeks.
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“As we close out the first year of the Bold New Chapter strategy, investments in the customer experience enabled us to achieve our highest comparable sales of the year, our best performance in 11 quarters,” Tony Spring, chairman and chief executive officer of Macy’s Inc., said in a statement Thursday. “At Macy’s, our ‘First 50’ locations delivered four quarters of increased sales, while our luxury nameplates – Bloomingdale’s and Bluemercury – achieved accelerated annual sales growth. As we enter the second year of our strategy, we plan to scale initiatives that are resonating with our customers to drive long-term profitable growth and further unlock shareholder value.”
Adrian Mitchell, Macy’s Inc.’s chief operating officer and chief financial officer, added, “Building on our momentum, we continue to elevate the customer experience, deliver operational excellence and make prudent capital investments. We remain committed to generating healthy free cash flow and returning capital to shareholders through share buybacks and predictable quarterly dividends.”
Comparable owned, licensed and marketplace sales growth at Macy’s First 50 locations, Macy’s digital channel, Bloomingdale’s, and Bluemercury was offset primarily by weakness in Macy’s non-First 50 and non-go-forward locations.
Macy’s Inc. go-forward business comparable sales were up 0.6 percent on an owned, licensed and marketplace basis.
The go-forward stores are those receiving significant investments for increased staffing in high-traffic areas such as women’s shoes and fitting room areas, fresher products and improved visuals. The retailer previously indicated that due to what it saw as a positive consumer response to the 50 Macy’s locations getting the most attention, an additional 75 Macy’s locations in fiscal 2025 will receive similar increased investments in assortments and service.
Aside from closing 150 Macy’s stores, the company’s three-year Bold New Chapter strategy, introduced in February 2024, calls for accelerating growth in the luxury sector, opening about 15 Bloomies stores, which are smaller, more specialized versions of the full-line Bloomingdale’s department stores; opening at least 30 new Bluemercury stores, and remodeling about 30 Bluemercury stores.
By division, Macy’s net sales were down 5.3 percent, with comparable sales down 0.9 percent on an owned, licensed and marketplace basis.
Macy’s go-forward business comparable sales were down 0.5 percent on an owned, licensed and marketplace basis. First 50 locations comparable sales were up 1.2 percent on an owned-plus-licensed basis.
Bloomingdale’s net sales were up 2 percent, with comparable sales up 6.5 percent on an owned, licensed and marketplace basis.
Bluemercury net sales were up 2.4 percent and comparable sales were up 6.2 percent on an owned basis.
Other revenue of $239 million, including those from credit cards and the Macy’s Media Network, decreased $16 million, or 6.3 percent.
For all of 2024, Macy’s Inc.’s net sales decreased 3.5 percent to $22.3 billion, with comparable sales down 0.9 percent on an owned, licensed and marketplace basis. Sales growth at Macy’s First 50 locations, Bloomingdale’s, and Bluemercury was offset primarily by weakness in Macy’s non-First 50 locations and digital channel.
Macy’s Inc. go-forward business comparable sales were down 0.6 percent on an owned-plus-licensed-plus-marketplace basis.
By division, Macy’s net sales were down 4.2 percent, with comparable sales down 1.6 percent on an owned, licensed and marketplace basis. Macy’s go-forward business comparable were down 1.3 percent on an owned, licensed and marketplace basis.
First 50 locations comparable sales were up 1.8 percent on an owned-plus-licensed basis.
Bloomingdale’s net sales were up 1 percent, with comparable sales up 2.5 percent on an owned, licensed and marketplace basis. Bluemercury net sales were up 2.8 percent and comparable sales were up 4 percent on an owned basis.
Asset sale gains of $144 million were $83 million higher. As part of its Bold New Chapter strategy, in fiscal year 2024, the company removed 64 non-go-forward Macy’s locations which contributed to current year asset sale gains.
The company is projecting 2025 sales of between $21 billion and $21.4 billion; comparable sales down 2 percent to 0.5 percent, and go-forward business sales down 2 percent to flat. Adjusted diluted earnings per share are seen at $2.05 to $2.25.
