Macy's Q3 Earnings Miss Estimates, Comparable Sales Decline Y/Y

Core Insights - Macy's, Inc. reported third-quarter fiscal 2024 results with revenues exceeding estimates but earnings falling short, indicating a decline in both metrics compared to the previous year [1][4][5] Financial Performance - Adjusted earnings were 4 cents per share, below the Zacks Consensus Estimate of 7 cents, and down from 21 cents in the prior year [4] - Net sales reached $4,742 million, surpassing the consensus estimate of $4,729 million, but decreased by 2.4% year-over-year [5] - Comparable sales fell 2.4% on an owned basis and 1.3% on an owned-plus-licensed-plus-marketplace basis compared to the previous year [5][6] Strategic Initiatives - The company is implementing its "Bold New Chapter" strategy, focusing on brand strengthening, luxury growth acceleration, and operational optimization through digital enhancements and supply chain improvements [2] - Macy's is expanding its First 50 initiative, closing underperforming stores, and monetizing assets to reinvest in core business [3] Brand Performance - Comparable sales across Macy's declined 3% year-over-year on an owned basis, while Bloomingdale's saw a 1% increase on an owned basis [8] - Bluemercury brand experienced a 3.3% increase in comparable sales on an owned basis, marking 15 consecutive quarters of growth [9] Margins and Expenses - Gross margin decreased by 60 basis points to 39.6%, below the estimated 40.3% [10] - Selling, general and administrative (SG&A) expenses rose to $2.06 billion, a 1.2% increase from the previous year, with SG&A as a percentage of total revenues increasing by 150 basis points to 43.5% [11][12] Cash and Inventory Overview - As of the end of the fiscal second quarter, Macy's had cash and cash equivalents of $315 million and long-term debt of $2.77 billion [13] - Merchandise inventories increased by 3.9% year-over-year [13] Future Guidance - For Q4 fiscal 2024, Macy's anticipates net sales between $7.8 billion and $8 billion, with adjusted earnings per share expected to range from $1.40 to $1.65 [15][16] - The company has updated its fiscal 2024 outlook, projecting net sales of $22.3 billion to $22.5 billion, slightly improved from previous estimates [18] - Adjusted earnings per share for fiscal 2024 are forecasted to be between $2.25 and $2.50, down from prior estimates [22]