Macy’s Reports Financial Results and Plans to Close Locations

February 27, 2024  by HFBusiness Staff in Business Strategy, Industry   

“I am grateful to all our teams for their continued commitment to our customers during the holiday season. Throughout the fourth quarter, we delivered an improved omnichannel experience, with effective merchandising and a clear demonstration of value that resulted in a strong close to the year,” said Tony Spring, chief executive officer of Macy’s, Inc.

“Our portfolio of iconic and globally recognized nameplates, healthy balance sheet and fortified operations position us to execute A Bold New Chapter. This strategy is designed to create a more modern Macy’s, Inc. that is expected to generate meaningful value for our shareholders in the years ahead.”

Fourth Quarter 2023 Highlights
• Diluted loss per share of $0.26 and Adjusted diluted earnings per share of $2.45.

• Net sales of $8.1 billion, down 1.7% versus the fourth quarter of 2022.
◦ Digital sales decreased 4% versus the fourth quarter of 2022. 
◦ Brick-and-mortar sales were roughly flat versus the fourth quarter of 2022. 
• Comparable sales, on a 13-week basis, were down 5.4% on an owned basis and down 4.2% on an owned-plus-licensed basis. 
• Highlights of the company's nameplates include: 
◦ Macy’s comparable sales, on a 13-week basis, were down 6.0% on an owned basis and down 4.7%, on an owned-plus-licensed basis. 
◦ Bloomingdale’s comparable sales, on a 13-week basis, were down 1.5% on an owned basis and down 1.6% on an owned-plus-licensed basis.
◦ Bluemercury comparable sales, on a 13-week basis, were up 2.3% on an owned basis.
• Other revenue of $255 million, down $64 million.
• Gross margin for the quarter was 37.5%, up from 34.1% in the fourth quarter of 2022
• Selling, general and administrative (“SG&A”) expense of $2.4 billion, a $51 million decrease from the fourth quarter of 2022.

FULL YEAR 2023 HIGHLIGHTS
• Diluted earnings per share of $0.38 and Adjusted diluted earnings per share of $3.50.
• Net sales of $23.1 billion, down 5.5% versus 2022.
• Comparable sales, on a 52-week basis, down 6.9% on an owned basis and down 6.0% on an owned-plus-licensed basis versus 2022.
• Customer counts for the company’s nameplates totaled:
◦ 41.2 million active customers shopped the Macy’s nameplate 
◦ 4.0 million active customers shopped the Bloomingdale’s nameplate
◦ Approximately 711 thousand active customers shopped the Bluemercury nameplate
• Other revenue of $774 million, down $233 million from 2022.
• Gross margin for the year was 38.8%, up from 37.4% in 2022
• Inventory was up approximately 2% versus 2022 and down approximately 16% versus 2019.
• SG&A expense of $8.4 billion, a $86 million decrease from 2022.

A Bold New Chapter 
The company also announces, A Bold New Chapter, a strategy designed to challenge the status quo to fundamentally reposition the company, enhance the customer experience, deliver growth and unlock shareholder value. Developed by the Macy’s, Inc. leadership team, with the full support of the board of directors, the strategy aligns the organization to reinvigorate relationships with customers through improved shopping experiences with relevant assortments and compelling value. Details of the strategy can be viewed at www.macysinc.com/investors

“Over the past several years, we have taken proactive actions to fortify our operations, including strengthening our balance sheet, managing expenses and tightening inventory controls,” said Adrian Mitchell, chief operating and chief financial officer, Macy’s, Inc. “The dedicated work of our teams delivered a solid close to 2023 and provides a strong foundation for us to execute A Bold New Chapter.”

According to an article in Yahoo! Finance, as part of the “Bold New Chapter” initiative, Macy's is closing 150 underperforming locations, including 50 by the end of 2024. The company did not disclose where these stores are or if it will continue to have a presence in these markets.

The company focus its resources on investment in digital sales, expansion of small format stores and improvements in product assortment. 15 Bloomingdale’s and 30 Bluemercury stores are also planned to open in the next three years, and plans are in place to remodel 30 existing Bluemercury locations.

Macy's is aiming to "rationalize and monetize" its supply chain, in order to streamline fulfilment, and offer a "scalable" tech platform in the next three years so the company will be competitive with retail giants like Amazon and Walmart.