Macy’s (M) Revenue Q1 2023

Macy’s company logo is seen at the Herald Square store in New York City on March 02, 2023.

Michael M. Santiago | Good pictures

Shares of Macy’s fell on Thursday after the retailer cut its full-year outlook and said sales weakened significantly at the end of March.

Despite first-quarter revenue beating expectations, the company’s stock fell as much as 10% in premarket trading.

The department store operator expected sales for the year to be between $22.8 billion and $23.2 billion, down from a previous range of $23.7 billion to $24.2 billion. Macy’s expects comparable owned-plus-licensed sales to fall 6% to 7.5%, worse than its previous outlook of a 2% to 4% decline.

For the year, it expects adjusted earnings of $2.70 to $3.20 per share — a big reduction from the previous $3.67 to $4.11 per share guidance.

In an interview with CNBC, CEO Jeff Gennette said the retailer took a conservative stance for the rest of the year after seeing a spring drag. He said the company expects higher markdowns of seasonal products and plans to reduce business orders as it prepares for the coming quarters.

He attributed the decline to weak sales at Macy’s brands, including upscale Bloomingdale’s and beauty chain BloomMercury.

Here’s how Macy’s did for the three months ended April 29, compared to what Wall Street expected, based on a survey of analysts by Refinitiv:

  • Stock Gains: 56 cents adjusted vs. 45 cents expected
  • Revenue: $4.98 billion and expected $5.04 billion

Macy’s first-quarter net income was $155 million, or 56 cents per share, compared with $286 million, or 98 cents per share, a year earlier.

See also  1 firefighter dead, 11 injured in Virginia house explosion: officials

Revenue fell 7% to $4.98 billion, compared to $5.35 billion in the year-ago period. Sales missed analysts’ forecasts.

Comparable sales on an owned-plus-license basis fell 7.2% in the quarter, compared with the 4.7% decline expected by analysts surveyed by Refinitiv.

The Macy’s brand saw a year-over-year decline. Its comparable sales fell 7.9% on an owned-plus-license basis. At Bloomingdale’s, comparable sales on an owned-plus-license basis decreased 4.3%. BlueMercury’s comparable sales grew 4.3% year-over-year, but growth was slower than double-digit or high-single-digit increases in other quarters.

Gennette said Macy’s sales have suffered as customers’ budgets have been squeezed. About half of Macy’s namesake brand’s customers have a household income of $75,000 or less.

“They’re clearly under pressure, especially in our favorite categories,” he said.

At Bloomingdale’s, the “anointed customer” who shopped more luxury brands during the pandemic has also given up incentive money.

The cold weather also affected sales as shoppers stopped buying seasonal items, he said.

But Genet said the company saw “signs of life in May” as the weather turned warmer. She said sales of spring clothing have increased, particularly at Bloomingdale’s. The upscale department store’s sales are ahead of last May, he said.

Beauty is one of the company’s strongest categories. Some popular pandemic goods such as textiles and home goods have also started to bounce back.

As Macy’s braces for augher year, Gennette said customers have a new reason to visit during the fall and holidays. Starting in October, Nike will return to its stores and website. Macy’s is set to receive its last delivery from Nike in December 2021 as the athletic shoe company cuts wholesale orders and emphasizes direct-to-consumer sales.

See also  Russia-Ukraine War Live Updates: Russian Shelling Kills 2 in Kherson

Macy’s has carried some Nike shoes through a licensing partnership with Finish Line, but it will begin to carry a full assortment, including women’s, men’s and children’s apparel.

“We took a break in our partnership and now we’re back at it,” he said.

Shares of Macy’s closed at $13.59 on Wednesday, bringing the company’s market value to $3.69 billion. The company’s stock has fallen 34% so far this year. That trailed the S&P 500’s roughly 9% gains and the retail-focused XRT’s roughly 6% loss over the same period.

This is breaking news. Check back for updates.

Leave a Reply

Your email address will not be published. Required fields are marked *