Macy’s reported mixed results for the latest quarter, as investors remain cautious about the effectiveness of CEO Tony Spring‘s turnaround efforts, which are being closely scrutinized by an activist investor pushing for a sale of the company. The retailer, which operates Macy’s, Bloomingdale’s, and Blue Mercury, saw a 1.1% decline in comparable sales during the crucial holiday quarter. However, sales across its owned and licensed businesses, plus its online marketplace, showed a slight increase of 0.2%, marking its best performance since the first quarter of 2022. Additionally, the first 50 stores that Macy’s is focusing on for its turnaround strategy saw comparable sales rise by 0.8%, continuing a positive trend for the fourth consecutive quarter.
Despite these bright spots, Macy’s is still facing challenges. For fiscal 2025, the company expects adjusted earnings per share to range from $2.05 to $2.25 and sales between $21 billion and $21.4 billion, falling short of Wall Street’s expectations. This comes after the company posted earnings of $1.80 per share in the fiscal fourth quarter, exceeding analysts’ expectations of $1.53. However, total sales for the period were down 4%, totaling $7.77 billion, below the anticipated $7.87 billion.
Looking ahead, Macy’s projects lower earnings and sales for the current quarter, prompting the company to adopt a cautious approach. Despite challenges, Macy’s has continued to invest in improving its stores, particularly its top-performing locations. Under Spring’s plan, Macy’s is closing 150 underperforming stores while focusing resources on improving the customer experience at the remaining locations. The company has invested in enhancing staffing and visual presentations at certain locations, which has led to stronger sales at those stores.
While Macy’s still struggles with a decline in comparable sales across its namesake banner, its other brands, Bloomingdale’s and Blue Mercury, have seen growth. The retailer is also contending with an activist investor, Barington Capital, which has urged the company to reduce spending, explore selling its luxury brands, and rethink its real estate strategy. Macy’s intends to buy back shares under its existing $1.4 billion authorization, although its turnaround efforts will take time and depend on broader economic conditions.
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