Macy’s (M) Q1 2024 earnings

Macy’s fiscal first-quarter earnings topped Wall Street’s expectations on Tuesday, and the retailer’s revenue came in roughly in line with revenue expectations as it pointed to early signs of momentum in its turnaround strategy.

The department store operator raised its full-year earnings expectations to reflect the first-quarter beat, along with the low end of its sales outlook. But the retailer said in a news release that it “assumes customers will continue to be discerning in their discretionary purchases.”

The company’s shares were down in morning trading.

On an earnings call with investors, CEO Tony Spring said the company is in the “early innings” of turning around its namesake stores. As the retailer has stepped up investments at 50 of its Macy’s stores, customers have responded by visiting more often and buying more when they do, he said.

For example, Macy’s has made sure there are sales associates at those stores ready to help customers in the fitting rooms and shoe department, and at jewelry counters. The company has rolled out new brands like Donna Karan and expanded others like French Connection, Free People and Hugo Boss. And Macy’s has tried to give shoppers more reasons to stop by, such as by offering personal styling sessions, fashion shows and fragrance bottle engraving, Spring added.

“We need more variety,” he said. “We need less redundancy. We need more interest within the assortment and I think that’s making a difference in the customer’s reception to the stores.”

Here’s what Macy’s reported for the three-month period that ended May 4 compared with what Wall Street expected, based on a survey of analysts by LSEG:

• Earnings per share: 27 cents adjusted vs. 15 cents expected
• Revenue: $4.85 billion adjusted vs $4.86 billion expected

Macy’s first-quarter net income tumbled 60% to $62 million, or 22 cents per share, compared with $155 million, or 56 cents per share, in the year-ago quarter. 

Net sales fell from $4.98 billion in the year-ago period.

Macy’s now anticipates net sales of between $22.3 billion and $22.9 billion, which would still represent a drop from $23.09 billion in 2023. It expects comparable sales, which take out the impact of store openings and closures, to range from a decline of about 1% to a gain of 1.5% on an owned-plus-licensed basis and including third-party marketplace sales. It had previously expected comparable sales to decline as much as 1.5%.

It expects adjusted earnings per share of between $2.55 and $2.90, raising its previous outlook of between $2.45 and $2.85.