Macy’s Inc (NYSE:M) stock rose 1.01% (As on September 4, 11:25:51 AM UTC-4, Source: Google Finance) after the company raised its annual outlook and reported its best comparable sales growth in 12 quarters, the latest signs that consumers are still spending despite concerns about inflation and tariffs. Despite Macy’s improved outlook and strong fiscal second-quarter performance, the department store operator warned of a more cautious consumer in the second half of the year. The company has said it will close about 150 underperforming locations through 2026. For the three months ended Aug. 2, the company highlighted strong performance from Bloomingdale’s, Bluemercury and the 125 stores that Macy’s has targeted for upgrades.
Moreover, Macy’s, Inc. reported comparable sales up 0.8% on an owned basis and up 1.9% on a comparable owned-plus-licensed-plus-marketplace (“O+L+M”) basis, above the company’s guidance, benefiting from positive comparable sales across nameplates. Macy’s Reimagine 125 locations achieved comparable sales growth of 1.1% on an owned basis and up 1.4% on an owned-plus-licensed (“O+L”) basis, continuing to outperform the broader Macy’s nameplate. Bloomingdale’s posted its fourth consecutive quarter of growth with comparable sales up 3.6% on an owned basis and increasing 5.7% on an O+L+M basis. Bluemercury reported comparable sales growth of 1.2%, its 18th consecutive quarter of gains.
M in the second quarter of FY 25 has reported the adjusted earnings per share of $0.41, beating the analysts’ estimates for the adjusted earnings per share of $0.19. The company had reported the adjusted revenue decline of 2.5 percent to $4.8 billion in the second quarter of FY 25, beating the analysts’ estimates for revenue of $4.69 billion. Bloomingdale’s net sales were up 4.6%. Bluemercury net sales were up 3.3%. Credit card net revenues increased $28 million, or 22.4%, to $153 million. Macy’s Media Network net revenue remained flat at $34 million. Gross margin rate of 39.7% declined 80 basis points, reflecting proactive markdowns on remaining early Spring product to maintain healthy inventories and product bought under prior tariff rates. In the second quarter of 2024, Adjusted EBITDA was $438 million, or 8.6% of total revenue, and Core Adjusted EBITDA was $402 million, or 7.9% of total revenue.
The retailer now expects net sales of as much as $21.45 billion for the fiscal year, up slightly from its previous guidance of up to $21.4 billion and better than analysts’ consensus forecast. It now expects comparable sales for the year to fall by about 0.5% to 1.5%, better than the decline of as much as roughly 2% projected in May.