Macy's reported mixed results for its fiscal fourth quarter, reflecting the challenges and opportunities in its ongoing turnaround strategy. The retail giant's "First 50" locations have shown promising performance, with comparable sales increasing by 0.8%, marking the fourth consecutive quarter of positive results for these stores. However, overall sales fell to $7.77 billion, a decline of approximately 4% compared to the previous year's $8.12 billion.
The mixed results come just over a year after Tony Spring assumed the role of CEO at Macy's. Under his leadership, the company has embarked on a significant restructuring plan, which includes the closure of 150 underperforming stores. This move aims to streamline operations and focus resources on better-performing locations to facilitate a turnaround.
Macy's plans to expand its strategy beyond the initial "First 50" stores, as these locations continue to outperform the rest of the company. Meanwhile, Macy's namesake banner remains a challenge, with comparable sales down 1.9%. In contrast, Bloomingdale's and Blue Mercury enjoyed another quarter of growth, with sales rising by 4.8% and 6.2%, respectively.
"Building on our momentum, we continue to elevate the customer experience, deliver operational excellence and make prudent capital investments," said Adrian Mitchell, Macy's chief operating officer and chief financial officer.
Despite the decline in total sales, Macy's managed to surpass Wall Street's earnings expectations but fell short on revenue figures. The company's comparable sales across owned and licensed businesses, along with its online marketplace, rose by 0.2%, marking the highest increase since the first quarter of 2022.
Activist investor Barington Capital has taken a stake in Macy’s, urging the company to cut costs and explore options to monetize its real estate portfolio. This move could provide additional financial flexibility for the retailer as it navigates its transition.
Looking ahead, Macy's has set expectations for adjusted earnings per share between $2.05 and $2.25 and anticipates sales ranging from $21 billion to $21.4 billion for fiscal 2025. The company also announced plans to resume share buybacks under its remaining $1.4 billion share repurchase authorization, depending on market conditions.