On March 6, 2025, Macy's Inc (M, Financial) released its 8-K filing detailing the financial results for the fourth quarter and fiscal year 2024. Founded in 1858 and headquartered in New York City, Macy's operates approximately 500 stores under the Macy's nameplate, nearly 60 Bloomingdale's stores, and over 160 Bluemercury specialty beauty stores. The company also manages e-commerce sites and licenses Bloomingdale's stores in the UAE and Kuwait. Women's apparel, accessories, shoes, cosmetics, and fragrances accounted for 62% of Macy's 2023 sales.
Performance Overview and Challenges
Macy's Inc reported a fourth-quarter GAAP diluted earnings per share (EPS) of $1.21, while the adjusted diluted EPS was $1.80, surpassing the analyst estimate of $1.52. However, net sales decreased by 4.3% to $7.8 billion, slightly below the estimated revenue of $7,867.35 million. Comparable sales were down 1.1% on an owned basis. Comparable sales showed a slight increase of 0.2% on an owned-plus-licensed-plus-marketplace basis. The decline in sales highlights ongoing challenges in the retail sector, particularly in non-First 50 and non-go-forward locations.
Financial Achievements and Industry Context
Despite the sales decline, Macy's achieved significant milestones. The company ended the year with $1.3 billion in cash, up $272 million from the previous year, and generated nearly $1.3 billion in operating cash flow. Macy's announced plans to resume share buybacks under the remaining $1.4 billion share repurchase authorization, subject to market conditions. These financial achievements are crucial for Macy's as it navigates the cyclical retail industry, focusing on enhancing customer experience and operational efficiency.
Income Statement and Key Metrics
For the fourth quarter, Macy's reported a gross margin rate of 35.7%, a decrease of 80 basis points from the previous year. Selling, general, and administrative (SG&A) expenses were $2.4 billion, reflecting a disciplined approach to cost management. The company's net income for the quarter was $342 million, compared to a net loss of $128 million in the same period last year. The improvement in net income underscores Macy's efforts to streamline operations and focus on profitable growth.
As we close out the first year of the Bold New Chapter strategy, investments in the customer experience enabled us to achieve our highest comparable sales of the year, our best performance in 11 quarters," said Tony Spring, chairman and chief executive officer of Macy’s, Inc.
Balance Sheet and Cash Flow Insights
Macy's ended fiscal year 2024 with total assets of $16.4 billion and total liabilities of $11.85 billion, resulting in shareholders' equity of $4.55 billion. The company maintained a strong liquidity position with $1.3 billion in cash and cash equivalents. Macy's generated $1.278 billion in net cash from operating activities, highlighting its ability to generate healthy free cash flow, which is vital for sustaining operations and funding strategic initiatives.
Analysis and Future Outlook
Macy's Inc's performance in the fourth quarter reflects a mixed outcome, with strong adjusted EPS but challenges in revenue growth. The company's strategic focus on enhancing customer experience and operational efficiency is evident in its financial achievements. However, the decline in net sales and comparable sales indicates the need for continued adaptation to changing consumer preferences and market conditions. As Macy's enters the second year of its Bold New Chapter strategy, its ability to scale successful initiatives will be crucial for driving long-term growth and unlocking shareholder value.
Explore the complete 8-K earnings release (here) from Macy's Inc for further details.
