Macy’s Stock Slides On Mixed Q3 Earnings, Profit Guidance Cut: Retail Sentiment Sours
By Stocktwits Inc | First Published Dec 11, 2024, 10:34 PM ISTThe company now expects adjusted diluted EPS to fall between $2.25 and $2.50, compared to the earlier expected $2.34 and $2.69.
Shares of department store Macy’s were down more than 5% on Wednesday after the company reported a lowered profit outlook for fiscal 2024, dragging down retail sentiment.
For the third quarter, earnings per share (EPS) stood at $0.04 compared to $0.03 expected by Wall Street analysts. Revenue came in at $4.74 billion in line with estimates.
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The retailer, which owns retail brands Bloomingdale’s, Macy’s, and Blue Mercury, also provided the outlook for 2024, lowering expectations for profit.
The company expects adjusted diluted EPS to fall between $2.25 and $2.50, compared to the earlier expected $2.34 and $2.69. The new figures exclude any potential impact from the credit card late fee ruling.
It also anticipates net sales to be between $22.3 billion and $22.5 billion, compared to the earlier $22.1 billion to $22.4 billion.
Comparable ‘owned-plus-licensed-plus-marketplace’ sales are expected to decline by around 1%, compared to an earlier expectation that they will remain flat from 2023.
“Our third quarter results reflect the positive momentum we are building through our Bold New Chapter strategy,” Tony Spring, chairman and CEO of Macy’s, said in a statement.
“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,” Spring added.
Retail sentiment on the stock fell to ‘bearish’ (36/100) from neutral (53/100) from a week ago. Message volumes climbed to the ‘high’ zone from ‘normal.’
For the third quarter, Macy’s net sales decreased 2.4% to $4.7 billion, with comparable sales down 2.4% on an owned basis and down 1.3% on an owned-plus-licensed-plus-marketplace basis.
Sales growth at Macy’s First 50 locations, Bloomingdale’s, and Bluemercury was offset primarily by weakness in Macy’s non-First 50 locations, digital channels, and cold weather categories.
Macy’s also said it concluded its investigation into an employee who hid $151 million of delivery expenses for about three years. The finding delayed the company's reporting of Q3 earnings. The retailer has now adjusted the discrepancy.
“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 organization.”
Macy’s stock is down 19% year-to-date.
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