Macy's today reported Q3 2024 earnings with net sales of US$4.74 billion (A$7.437 billion), a 2.4% decline compared to last year.
“Our third quarter results reflect the positive momentum we are building through our Bold New Chapter strategy,” said Tony Spring, chairman and chief executive officer of Macy’s, Inc.
“We are encouraged by the consistent sales growth in our Macy's First 50 locations and the strong performance of Bloomingdale's and Bluemercury. Quarter-to-date, comparable sales continue to trend ahead of third quarter levels across the portfolio. Looking ahead, we remain committed to achieving sustainable, profitable growth for Macy’s, Inc.”
According to Macy's, a rogue employee hid more than US$151 million in expenses in order to cover up a bookkeeping mistake. He wasn't motivated by money or personal gain.
Based on an investigation, the company's net cash flows, inventories and vendor payments were not affected by this matter.
“We’ve concluded our investigation and are strengthening our existing controls and implementing additional changes designed to prevent this from happening again and demonstrate our strong commitment to corporate governance,” said Spring. “Our focus is on ensuring that ethical conduct and integrity are upheld across the entire organisation.”
As a result of the accounting cover-up, the company's quarterly earnings report was delayed and shares dropped.
Macy's lower profit outlook caused shares to fall by more than 11% on Wednesday (Thursday AEDT).
The company's adjusted earnings per share (EPS) were $0.04, missing Wall Street expectations.
Comparable store sales also saw a 2.4% decline on an owned basis. Despite these challenges, Macy's First 50 locations showed positive comparable sales growth of 1.9% for the third consecutive quarter.
For Macy's, these results indicate ongoing struggles in a competitive retail environment. The company has been focusing on its "Bold New Chapter" strategy, which includes closing underperforming stores and investing in its top locations.
However, Macy's has lowered its full-year profit guidance. This suggests that while there are pockets of growth, the overall trend for Macy's remains challenging.
In the broader retail landscape, Macy's continues to face stiff competition from online retailers and brick-and-mortar stores. The company's efforts to revitalise its top locations and focus on high-performing brands like Bloomingdale's and Bluemercury are part of its relevance strategy. However, the decline in comparable sales and net income highlights Macy's difficulties in maintaining its market position.
Macy's stock price has been under pressure, with shares down 25% year-to-date. The company's market cap is US$4.5 billion. Despite the recent decline, Macy's stock has shown resilience with a 10.9% return over the past month. Investors will closely watch Macy's performance in the coming quarters to see if the company can turn around its fortunes.
Macy's Q3 earnings reflect a mixed picture, with some positive signs in its top locations but overall challenges in a competitive retail environment. The company's stock price and market cap indicate investor concerns, but there are still opportunities for growth if Macy's executes its strategic initiatives.
As of 8:06 am (AEDT), Thursday 12 December, Macy's Inc's (NYSE: M) stock price was US$16.58.
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