MW Macy's stock falls as it cuts guidance in the face of 'external uncertainties'

By Steve Gelsi

The retailer said it's taking a 'prudent' approach to its outlook as it warns of a Q1 profit shortfall

Macy's issued a profit warning as it faces "external uncertainties" amid turnaround efforts, but it managed to shut down more underperforming stores than expected in the latest quarter.

Macy's (M) said its lower-than-expected earnings forecast for the first quarter and full year reflect an unclear immediate future for customers and its core nameplate retail brands including Macy's, Bloomingdale's and Bluemercury.

For full-year 2024, the company closed 64 out of 150 lower-performing Macy's stores, ahead of its projected closing target of 50 stores.

The company said it "is taking a product approach to its FY25 guidance, reflecting the external uncertainties the company and its customers are facing."

Macy's stock fell 0.8%. By midday, the stock had trimmed some of its earlier losses, even as the broad equities market moved into the red.

For the first quarter, Macy's expects adjusted profit of 12 cents a share to 15 cents a share, below the analyst estimate of 28 cents a share.

For fiscal 2025, the retailer expects adjusted earnings of $2.05 a share to $2.25 a share, below the $2.29 a share profit that had been expected by analysts.

Macy's has joined other retailers such as Target $(TGT)$, Abercrombie & Fitch $(ANF)$, Best Buy Co $(BBY)$ and Walmart $(WMT)$ to make conservative profit forecasts as consumers face the impact of tariffs imposed this week by President Donald Trump.

Macy's reported fourth-quarter adjusted earnings of $1.80 a share, ahead of the company's projections and above the FactSet consensus estimate of $1.54 a share.

Fourth-quarter revenue fell 4.3% to $7.77 billion from $8.12 billion, and fell just short of the analyst estimate of $7.78 billion.

Same-store sales dropped 1.1%, while adjusted same-store sales rose 0.2%, ahead of the analyst estimate for a drop of 0.2%.

The company is moving ahead with plans to close underperforming Macy's stores and said the effort is moving into its second year.

"On a quarterly basis, the company does not expect its results to be linear as the year progresses, which is a reflection of the year two initiatives gaining traction, comparability impacts and the timing of asset sale gains," Macy's said.

In the fourth quarter, the company increased its number of Macy's small-format stores by eight, to 20 stores, and cut 11 locations of its Macy's Furniture stores, bringing the total number down to 34.

The company closed one Bloomingdale's store to bring the total down to 31 and opened two Bloomingdale's The Outlet stores to bring the total to 23.

The top 50 Macy's stores reported a rise of 1.2% in same-store sales in the fourth quarter, while Bloomingdale's same-store sales rose 6.5% in the quarter.

Macy's is planning to continue store closures in 2025 with an objective to operate 125 Macy's Reimagine location.

-Steve Gelsi

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March 06, 2025 12:51 ET (17:51 GMT)

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