Macy's Beats on Q4 Earnings, Posts Positive Comps Across Nameplates

Core Insights - Macy's, Inc. reported fourth-quarter fiscal 2025 results with both top and bottom lines exceeding Zacks Consensus Estimates, although both metrics declined compared to the previous year [1][3] - The company is optimistic about its strategic priorities and growth achieved during its Bold New Chapter initiative, focusing on relevant brands and enhanced customer experiences [2] Financial Performance - Adjusted earnings were $1.67 per share, surpassing the consensus estimate of $1.53, but down from $1.80 in the prior year [3] - Net sales reached $7,639 million, exceeding the consensus estimate of $7,524 million, but decreased by 1.7% year-over-year due to store closures [3] - Comparable sales increased by 1.8% across all nameplates [3] Brand Performance - Comps for the Macy's brand rose 0.4% year-over-year, while go-forward comps increased by 0.6% [6] - Bloomingdale's brand saw a significant increase in comps of 9.9%, marking its sixth consecutive quarter of growth [6] - Bluemercury brand experienced a 1.3% increase in comps, indicating steady growth [6] Margins and Expenses - Gross margin for the fourth quarter was 35.2%, exceeding the estimate of 34.8%, but down 50 basis points from the previous year due to tariff impacts [7] - Selling, general and administrative (SG&A) expenses were $2.26 billion, down 1% year-over-year, attributed to store closures and cost-control measures [8] - Adjusted EBITDA was $840 million, a decline of 7% from $903 million in the prior year, with an adjusted EBITDA margin of 10.6% [9] Cash and Inventory Overview - The company ended fiscal 2025 with cash and cash equivalents of $1.25 billion and total debt of $2.4 billion, with no significant long-term debt maturities until 2030 [10] - Merchandise inventories decreased by 1.3% year-over-year, with the company confident in its inventory alignment as it enters fiscal 2026 [10] Share Repurchase Activity - In the fourth quarter, the company repurchased 2.3 million shares for $50 million, totaling 17.7 million shares repurchased for $251 million in the fiscal year [12] Fiscal 2026 Guidance - For fiscal 2026, the company expects net sales between $21.4 billion and $21.65 billion, down from $21.8 billion in fiscal 2025 [15] - Comparable sales are projected to decline by 0.5% to grow by 0.5%, compared to a 1.5% increase in fiscal 2025 [15] - Adjusted EBITDA margin is anticipated between 7.7% and 7.9%, while adjusted earnings per share are expected to be between $1.90 and $2.10 [16]