Macy’s reported a mixed set of financial results, highlighting both progress in its turnaround strategy and ongoing challenges in revitalizing the business.
While the department store giant exceeded Wall Street’s expectations for earnings, it fell short on revenue, reflecting the difficulties CEO Tony Spring faces in reshaping the company.
For its fiscal fourth quarter, Macy’s reported adjusted earnings per share of $1.80, surpassing analyst expectations of $1.53. However, revenue came in at $7.77 billion, slightly below the forecasted $7.87 billion. Net income for the quarter was $342 million, a significant improvement from a $128 million loss in the previous year.
Comparable sales across Macy’s owned and licensed businesses, as well as its online marketplace, rose 0.2%, marking the best performance for this metric since early 2022. However, comparable sales at Macy’s physical stores declined by 1.1%, signaling that brick-and-mortar locations continue to struggle.
As part of its restructuring plan, Macy’s has been investing in 50 key stores—referred to as the “First 50”—to improve customer experience through better staffing, merchandising, and visual presentation. These stores outperformed the broader company, with comparable sales rising 0.8% in the fourth quarter, marking their fourth consecutive quarter of growth.
However, Macy’s still operates around 350 locations after recent closures, and extending this strategy to the entire chain will take time and significant investment. The company has already shuttered 66 of the planned 150 underperforming stores and is on track to close more in the coming years.
Despite some promising signs, Macy’s faces external and internal pressures. The company forecasted lower-than-expected sales for fiscal 2025, projecting revenue between $21 billion and $21.4 billion—below analyst expectations of $21.8 billion. It also expects comparable sales to decline by as much as 2% in the coming year.
In December, activist investor Barington Capital took a stake in Macy’s, pushing for cost-cutting measures and exploring options such as selling off real estate assets. This marks the fourth activist investor challenge Macy’s has faced in the past decade. While some investors see potential in Macy’s real estate portfolio, concerns remain about whether the company is moving quickly enough to generate value.
Macy’s has signaled its commitment to shareholders by resuming share buybacks under its $1.4 billion repurchase authorization. The company also continues to see stronger performance in its upscale brands, with Bloomingdale’s and Bluemercury reporting sales growth of 4.8% and 6.2%, respectively.
With input from CNBC, the New York Times, and Bloomberg.
