Macy's, a prominent player in the retail landscape, reported a significant drop in its fiscal fourth-quarter results, marking a concerning trend for the department store operator. The company revealed that revenue fell to $7.77 billion for the three months ending on February 1, down from $8.12 billion during the same period last year.
This decline narrowly missed the analyst forecast of $7.78 billion, as reported by FactSet. Additionally, adjusted earnings per share (EPS) decreased from $2.24 to $1.80 but managed to surpass the Street's expectation of $1.54, showcasing some resilience amid challenging conditions. During a conference call, Chief Executive Tony Spring emphasized the company’s disciplined approach to managing margins and controlling costs, which played a pivotal role in achieving better-than-expected financial results.
"We maintained a disciplined approach to margins and cost controls," Spring noted. The improvement in earnings was attributed to lower-than-anticipated expenses and a boost in credit card revenue, giving investors some hope in an otherwise bleak market. In terms of comparable sales, Macy's experienced a 1.1% decline on an owned basis.
However, owned-plus-licensed-plus-marketplace sales indicated a modest increase of 0.2%. This was particularly noteworthy as it represented Macy's best performance since the first quarter of 2022, signaling potential stabilization within their sales strategies. Breaking it down by brand, Macy's own comparable sales decreased by 1.9%, while Bloomingdale's managed to rise by 4.8%, both figures reflecting owned sales.
The brand Bluemercury also showed promising growth with a 6.2% increase in comparable sales. Looking ahead to the current fiscal year, management has provided guidance indicating that net sales are expected to fall within the range of $21 billion to $21.4 billion. This projection suggests a contraction from the $22.29 billion reported in the previous year, reflecting broader market challenges.
Analysts following Macy's through FactSet have an average revenue estimate of approximately $21.34 billion for 2024. Comparable owned-plus-licensed-plus-marketplace sales are anticipated to decline between 0.5% to 2% compared to the fiscal year 2024, which had seen a 0.9% drop. Moreover, Macy's outlook for adjusted EPS is projected in the range of $2.05 to $2.25, indicating a decrease from $2.64 recorded last year, and below the $2.29 average analyst estimate, further highlighting the pressures that the retail giant is under. Spring reiterated a cautious stance during the analyst call, stating that management has opted for a "prudent approach" in light of prevailing external uncertainties facing both the company and consumers alike.
This sentiment reflects a broader concern within the retail sector as companies navigate the complexities of an evolving market landscape, with Macy's striving to maintain stability and profitability amid rising challenges. Price: 13.10, Change: -0.22, Percent Change: -1.62.