Macy's Reports Decline in Revenue and Profitability for Third Quarter of Fiscal 2024

Macy's, Inc. reported its financial results for the third quarter and the first nine months of fiscal 2024, revealing a decline in both revenue and profitability compared to the previous year. For the 13 weeks ended November 2, 2024, the company generated total revenue of $4.903 billion, a decrease of 2.7% from $5.038 billion in the same period last year. Net income for the quarter was $28 million, or $0.10 per diluted share, down from $41 million, or $0.15 per diluted share, in the third quarter of 2023. For the first nine months, total revenue was $14.999 billion, down from $15.491 billion, with net income increasing to $240 million from $173 million in the prior year.

The decline in revenue was attributed to ongoing macroeconomic challenges and a decrease in comparable sales, which fell by 2.4% on an owned basis and 1.3% on an owned-plus-licensed-plus-marketplace basis. The company's flagship Macy's stores experienced a comparable sales decline of 3.0%, while Bloomingdale's saw a modest increase of 1.0%. The decrease in sales was partially offset by gains from the sale of real estate, which contributed $66 million in the third quarter, compared to $5 million in the same period last year.

Macy's is actively pursuing its "A Bold New Chapter" strategy, which includes closing underperforming stores and enhancing its product offerings. The company plans to close approximately 65 locations in fiscal 2024, up from an initial estimate of 50. Additionally, Macy's has opened six small-format stores, bringing the total to 24, and is focusing on improving customer engagement through its First 50 locations initiative, which has shown positive sales growth and improved customer satisfaction metrics.

Operationally, Macy's reported a decrease in digital sales, which accounted for 30% of total net sales, down from 31% in the previous year. The company is also facing challenges with inventory management, as merchandise inventories increased to $6.257 billion from $6.025 billion year-over-year. The company has made changes to its inventory valuation method, which may impact comparability with prior periods. As of November 2, 2024, Macy's had 277.6 million shares outstanding.

Looking ahead, Macy's management remains cautious about the retail environment, emphasizing the need for continued investment in growth initiatives while managing costs. The company expects to navigate ongoing economic pressures and is committed to enhancing its omni-channel experience to better serve customers. The outlook for the remainder of fiscal 2024 remains uncertain, with management focusing on executing its strategic initiatives to drive long-term growth and shareholder value.