Macy's Q2 Earnings Beat Market, But Comps Down; Cuts FY24 Sales View; Stock Dips

(RTTNews) - Fashion retailer Macy's Inc. (M) on Wednesday reported a profit in its second quarter, compared to prior year's loss, despite weak sales and comparable sales. Adjusted earnings also beat market estimates.

For fiscal 2024, the company maintained earnings view, but trimmed forecast for total sales and comparable sales.

In pre-market activity on the NYSE, Macy's shares were losing around 8.7 percent to trade at $16.20.

Outlook

Macy's said it updated its annual outlook to reflect a more discriminating consumer and heightened promotional environment relative to its prior expectations, and that it gives the flexibility to address the ongoing uncertainty in the discretionary consumer market.

For fiscal 2024, the company continues to expect adjusted earnings per share of $2.55 to $2.90.

Analysts on average expect the company to report earnings of $2.78 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

Meanwhile, annual net sales is now projected to be $22.1 billion to $22.4 billion, compared to previous outlook of $22.3 billion to $22.9 billion. Analysts expect the company to report sales of $22.84 billion.

For the year, comparable owned-plus-licensed-plus-marketplace sales are now projected to be down around 0.5 percent to down around 2 percent from 2023, while previous outlook was down around 1 percent to up 1.5 percent versus 2023.

Q2 Results

In the second quarter, net income was $150 million, compared to loss of $22 million last year. Earnings per share were $0.53, compared to loss of $0.08 per share a year ago.

Adjusted earnings per share were $0.53, compared to $0.26 last year.

Total revenue for the quarter declined to $5.10 billion from last year's $5.28 billion. The Street was looking for earnings of $0.30 per share on sales of $5.12 billion for the quarter.

Net sales decreased 3.8 percent to $4.94 billion from $5.13 billion a year ago.

Comparable sales were down 4.0 percent on an owned basis and down 3.3 percent on an owned-plus-licensed-plus-marketplace basis. Macy's go-forward business comparable sales, inclusive of go-forward locations and digital across nameplates, were down 3.8 percent on an owned basis.

Nameplate sales of Macy's were down 4.4 percent.

Tony Spring, chairman and chief executive officer, said, "During the second quarter, we delivered strong earnings performance in a challenging consumer environment.... We are seeing signs of our strategy taking root, including two consecutive quarters of positive comparable sales in Macy's First 50 locations."

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