Macy's Slips To Loss, Warns On FY24; To Close 150 Stores

(RTTNews) - Macy's, Inc. reported Tuesday a loss in its fourth quarter, compared to prior year's profit, amid weak sales. The latest results were hit by around $1 billion charge mainly related to the around 150 store closures planned as part of its newly announced strategy, A Bold New Chapter.

Further, the Omni-channel fashion retailer issued fiscal 2024 outlook, expecting weak profit and sales. The company said the outlook reflects continued operational progress and investments in key customer-focused initiatives in support of its new strategy.

In pre-market activity on the NYSE, Macy's shares were losing around 3 percent to trade at $18.74.

Regarding its new strategy, the company said A Bold New Chapter is designed to return the firm to enterprise growth. As part of this, the company would close around 150 underproductive locations over the next three years, including approximately 50 by the end of the fiscal year. It will prioritize investment in around 350 go-forward locations and the continued expansion of small-format stores.

Further, as part of the strategy, around 15 Bloomingdale's nameplate stores and at least 30 new Bluemercury stores will be opened in new and existing markets over the next three years. There will be roughly 30 Bluemercury remodels.

With the new strategy, beginning in 2025, Macy's expects annual Adjusted EBITDA dollar growth in the mid-single-digit range and low-single-digit annual comparable Owned + Licensed + Marketplace sales growth.

For fiscal 2024, the company projects adjusted earnings per share of $2.45 to $2.85 and net sales of $22.2 billion to $22.9 billion. In fiscal 2023, adjusted earnings were $3.50 per share on net sales of $23.09 billion.

Analysts on average expect the company to report earnings of $2.76 per share on sales of $22.96 billion, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

Comparable owned plus licensed plus marketplace sales are expected to be down around 1.5 percent to up 1.5 percent versus 2023

In its fourth quarter, net loss was $71 million, compared to prior year's profit of $508 million. Loss per share were $0.26, compared to profit of $1.83 a year ago.

The latest results included $1.0 billion of impairment, restructuring and other costs primarily related to actions that support profitable growth and market share gains, and align with its new strategy of A Bold New Chapter.

Around $950 million non-cash asset impairment charge is primarily related to the approximately 150 locations planned for closure over the next three years and the remaining associated with corporate assets.

Adjusted earnings were $685 million or $2.45 per share for the period, compared to last year's $524 million or $1.88 per share.

Net sales fell 1.7 percent to $8.12 billion from $8.26 billion in the same period last year.

Analysts expected the company to report earnings of $1.96 per share on sales of $8.15 billion for the quarter.

Comparable sales, on a 13-week basis, were down 5.4 percent on an owned basis and down 4.2 percent on an owned-plus-licensed basis.

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