Macy's Q4 Revenue Lag And Annual Outlook Disappoints Investors, Stock Slides

Macy’s Inc M shares are trading lower in premarket on Thursday after the fourth-quarter earnings.

The company reported a fourth-quarter sales decline of 4.3% year-on-year to $7.768 billion, missing the analyst consensus of $7.867 billion.

Comparable sales decreased 1.1% on an owned basis and up 0.2% on an owned-plus-licensed-plus-marketplace basis.

The company’s go-forward business comparable sales were down 0.7% on an owned basis and up 0.6% on an owned-plus-licensed-plus-marketplace basis.

By nameplate, Macy’s net sales were down 5.3%, with comparable sales down 1.9% on an owned basis and down 0.9% on an owned-plus-licensed-plus-marketplace basis.

Bloomingdale’s net sales were up 2.0%, with comparable sales up 4.8% on an owned basis and up 6.5% on an owned-plus-licensed-plus-marketplace basis. Bluemercury net sales rose 2.4%, and comparable sales grew 6.2% on an owned basis.

The operating margin was 6.2%. Operating income for the quarter was $500 million compared to a loss of $149 million last year.

The gross margin was 35.7%, down 80 basis points from the prior year. Adjusted EBITDA was $903 million versus $1.09 billion last year. Adjusted EPS of $1.80 beat the consensus estimate of $1.53.

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Macy’s held $1.3 billion in cash and equivalents as of February 1. Operating cash flow for twelve months totaled $1.3 billion with a free cash flow of $679 million.

Merchandise inventories were up 2.5% year-over-year. As of the end of FY24, total debt was $2.8 billion.

“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,” said chairman and CEO Tony Spring.

Outlook: Macy’s expects FY25 revenue of $21.0 billion – $21.4 billion, against the consensus of $21.811 billion. The company sees FY25 adjusted EPS of $2.05 – $2.25 against the estimate of $2.31.

Macy’s currently sees FY25 comparable owned-plus-licensed-plus-marketplace sales of -2% to -0.5%.

Price Action: M shares traded lower by 4.13% at $12.76 at last check Thursday.

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