Macy’s estimates annual sales will be lower than expected, leading to 150 store closures
New York: Macy’s Forecast annual sales Lower than market expectations due to weak demand for its apparel and footwear products and said it will close at 150 store on a new turnaround plan by 2026, sending its shares down nearly 3% before the bell on Tuesday.
The retailer did not provide details on the location of the stores being closed or how many employees would be laid off. It also plans to monetize $600 million-$750 million of assets over the next three years.
The move comes as sluggish sales have put the upscale retailer in the crosshairs of activist shareholders and attracted potential bidders.
Macy’s is facing a proxy fight from Archhouse management after the investment firm nominated nine director candidates last week.
The new plan is in addition to Macy’s decision in January to close five stores and cut 2,350 jobs, or 3.5% of its total workforce.
The company also said it would open 15 Bloomingdale’s locations and at least 30 new Bluemercury stores over the next three years to accelerate the growth of its better-performing luxury brands. The retailer reported a 4.2% decline in comparable sales in the holiday quarter on an owned-plus-licensed basis, better than analysts’ estimates. A decline of 5.8% as deep discounts helped attract buyers.
However, net credit card revenue fell 26% to $195 million, indicating that economic pressures, particularly among its low- and middle-income customers, led to an increase in bad loans.
The company took a $1 billion charge related to the restructuring in the fourth quarter, resulting in a loss of 26 cents per share. Excluding items, it earned $2.45 per share, beating the LSEG estimate of $1.96.
It expects net sales to range from $22.2 billion to $22.9 billion in fiscal 2024, while analysts’ average estimate is $22.95 billion.
Macy’s forecast adjusted earnings per share between $2.45 and $2.85, with the midpoint falling short of expectations of $2.76.
The retailer did not provide details on the location of the stores being closed or how many employees would be laid off. It also plans to monetize $600 million-$750 million of assets over the next three years.
The move comes as sluggish sales have put the upscale retailer in the crosshairs of activist shareholders and attracted potential bidders.
Macy’s is facing a proxy fight from Archhouse management after the investment firm nominated nine director candidates last week.
The new plan is in addition to Macy’s decision in January to close five stores and cut 2,350 jobs, or 3.5% of its total workforce.
The company also said it would open 15 Bloomingdale’s locations and at least 30 new Bluemercury stores over the next three years to accelerate the growth of its better-performing luxury brands. The retailer reported a 4.2% decline in comparable sales in the holiday quarter on an owned-plus-licensed basis, better than analysts’ estimates. A decline of 5.8% as deep discounts helped attract buyers.
However, net credit card revenue fell 26% to $195 million, indicating that economic pressures, particularly among its low- and middle-income customers, led to an increase in bad loans.
The company took a $1 billion charge related to the restructuring in the fourth quarter, resulting in a loss of 26 cents per share. Excluding items, it earned $2.45 per share, beating the LSEG estimate of $1.96.
It expects net sales to range from $22.2 billion to $22.9 billion in fiscal 2024, while analysts’ average estimate is $22.95 billion.
Macy’s forecast adjusted earnings per share between $2.45 and $2.85, with the midpoint falling short of expectations of $2.76.
