Macy’s posts strongest sales growth in 13 quarters; raises guidance
Macy’s Inc. reported a better-than-expected third quarter with sales growth across its three banners as its turnaround strategy continues to gain momentum.
The department store giant reported its second consecutive quarter of comparable sales growth and said that its sales were the strongest in 13 quarters. The company lifted its full-year sales and earnings outlook.
Macy's net income fell to $11 million, or $0.04 per share, for the quarter ended Nov. 1, compared to $28 million, or $0.10 per share, in the year-ago period. Adjusted earnings came to $0.9 per share. Analysts had expected a loss of $0.14 per share.
Net sales fell to $4.71 billion from $4.74 billion in the year-ago period, topping analysts estimates of $4.62 billion (Macy’s noted the most recent quarter sales metric included store closures). Total revenue inched up to $4.91 billion from $4.90 billion,
Total comparable sales rose 2.5% on an owned basis and were up 3.2% on a comparable owned-plus-licensed-plus-marketplace basis.
By division, comparable sales for Bloomingdale’s jumped 8.8%, its its biggest increase in three years and fifth consecutive quarter of growth. Macy’s s comparable increased 1.4%, and Bluemercury’s rose 1.1%.
Macy’s noted that comparable sales at its revamped (“Reimagine”) 125 stores rose 2.7%. The revamped locations, which feature improved service and interior updates, continue to outperform the overall Macy’s store chain.
“Our third quarter sales were the strongest in 13 quarters, reflecting the acceleration of our Bold New Chapter strategy and demonstrating that the meaningful enterprise-wide changes we’ve made are resonating with customers,” said Tony Spring, Macy’s chairman and CEO. “As we enter the holiday season, we are well-positioned with compelling new merchandise and an omni-channel customer experience that delivers both inspiration and value. With a strategy rooted in hospitality, our teams are focused on driving long-term, profitable growth.”
Introduced in February 2024, Macy’s Bold New Chapter strategy includes closing 150 Macy’s stores, prioritizing investment in approximately 350 “go-forward” nameplate locations, accelerating growth in the luxury sector with the opening of about 15 Bloomingdale’s stores and at least 30 Bluemercury stores during the next three years.
David Silverman, senior director of Fitch Ratings, said that Macy’s third quarter report, including positive comparable sales at both Macy’s and Bloomingdales, is "another data point supporting the company’s ability to stabilize market share through its Bold New Chapter strategy. "
"The company’s efforts to improve merchandising and service appear to be gaining traction, as the company sees somewhat accelerating top-line results despite a choppy environment and ongoing challenges at regional malls," Silverman said. "Fitch believes the company continues to benefit from its fundamental strengths including its scale, vendor relationships and good financial position, and is likely taking some share from weaker players in the department store and soft lines space."
Macy’s raised its guidance for net sales to $21.48 billion to $21.63 billion, up from its previous range of $21.15 billion to $21.45 billion. Comparable sales are now expected to be flat to up about 0.5%, up from its previous forecast of comp sales to be down 1.5% to about flat.
Adjusted earnings per share are now expected to range from $2 to $2.20, up from the company’s previous forecast of $1.70 to $2.05.
