Macy's to close 150 stores Amidst weak 2024 sales
Macy's Inc. (NYSE: 
M) announced a comprehensive restructuring plan on Tuesday, including store closures and cost-saving measures, alongside a forecast for annual sales and profit below expectations.
Store Closures and Cost-Saving Measures
The department store giant revealed plans to shutter approximately 150 stores through 2026, aiming to streamline operations and save $100 million in costs this year alone. Macy's (M) shares surged 7% following the announcement, buoyed by quarterly profit beats, although they have trailed behind industry peers in recent times.
While the closures represent less than 10% of Macy's annual sales and predominantly target underperforming mall-based locations, the move underscores the retailer's proactive stance in adapting to shifting consumer preferences and economic challenges. CFO Adrian Mitchell emphasized that no additional layoffs were planned due to the closures, offering some reassurance amidst uncertainty.
Strategic Vision and Forecast
Macy's CEO, Tony Spring, characterized fiscal 2024 as a transition and investment year, expressing optimism for a return to consistent sales and profit growth by 2025. The company also outlined plans to open 15 Bloomingdale's locations and at least 30 new Bluemercury stores over the next three years, focusing on accelerating growth in its luxury brands segment.
However, Macy's holiday-quarter comparable sales saw a decline of 4.2%, although it surpassed analysts' estimates, attributed partly to steep discounts that drew in shoppers. Notably, net credit card revenue took a hit, falling 26%, signaling economic pressures among its customer base.
Financial Performance and Outlook
The restructuring efforts resulted in a $1 billion charge in the fourth quarter, reflecting the company's commitment to realigning its operations for long-term sustainability. Despite the charge, Macy's exceeded earnings expectations, reporting adjusted earnings per share of $2.45, above analysts' estimates.
Looking ahead, Macy's (NYSE:M) forecasts net sales between $22.2 billion to $22.9 billion for 2024, slightly below analysts' average estimate. Similarly, adjusted earnings per share are expected to range between $2.45 and $2.85, falling slightly short of expectations.
The announcement comes amidst heightened scrutiny from activist shareholders and proxy battles, underscoring the urgency for Macy's to implement decisive measures to reignite growth and regain investor confidence. As the retail landscape continues to evolve, Macy's (M) remains committed to strategic agility and innovation in navigating challenges and capitalizing on opportunities in the ever-changing market.
M) announced a comprehensive restructuring plan on Tuesday, including store closures and cost-saving measures, alongside a forecast for annual sales and profit below expectations.Store Closures and Cost-Saving Measures
The department store giant revealed plans to shutter approximately 150 stores through 2026, aiming to streamline operations and save $100 million in costs this year alone. Macy's (
M) shares surged 7% following the announcement, buoyed by quarterly profit beats, although they have trailed behind industry peers in recent times.While the closures represent less than 10% of Macy's annual sales and predominantly target underperforming mall-based locations, the move underscores the retailer's proactive stance in adapting to shifting consumer preferences and economic challenges. CFO Adrian Mitchell emphasized that no additional layoffs were planned due to the closures, offering some reassurance amidst uncertainty.
Strategic Vision and Forecast
Macy's CEO, Tony Spring, characterized fiscal 2024 as a transition and investment year, expressing optimism for a return to consistent sales and profit growth by 2025. The company also outlined plans to open 15 Bloomingdale's locations and at least 30 new Bluemercury stores over the next three years, focusing on accelerating growth in its luxury brands segment.
However, Macy's holiday-quarter comparable sales saw a decline of 4.2%, although it surpassed analysts' estimates, attributed partly to steep discounts that drew in shoppers. Notably, net credit card revenue took a hit, falling 26%, signaling economic pressures among its customer base.
Financial Performance and Outlook
The restructuring efforts resulted in a $1 billion charge in the fourth quarter, reflecting the company's commitment to realigning its operations for long-term sustainability. Despite the charge, Macy's exceeded earnings expectations, reporting adjusted earnings per share of $2.45, above analysts' estimates.
Looking ahead, Macy's (NYSE:
M) forecasts net sales between $22.2 billion to $22.9 billion for 2024, slightly below analysts' average estimate. Similarly, adjusted earnings per share are expected to range between $2.45 and $2.85, falling slightly short of expectations.The announcement comes amidst heightened scrutiny from activist shareholders and proxy battles, underscoring the urgency for Macy's to implement decisive measures to reignite growth and regain investor confidence. As the retail landscape continues to evolve, Macy's (
M) remains committed to strategic agility and innovation in navigating challenges and capitalizing on opportunities in the ever-changing market.
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