Macy’s Impairment Charges Highlight Vulnerable Asset Base and Rising Earnings Risk

Macy’s (M) has disclosed a new risk, in the Accounting & Financial Operations category.

Macy’s has recently recognized substantial non-cash impairment charges on long-lived tangible and intangible assets, including goodwill, reflecting underperformance of certain stores and other assets under U.S. GAAP testing. These charges, tied in part to the Bold New Chapter store closures and past COVID-19 impacts, signal that its asset base may be vulnerable to further write-downs.

Any renewed deterioration in macroeconomic or retail industry conditions could trigger additional impairments of long-lived assets, right of use assets and goodwill, directly pressuring Macy’s reported earnings and equity. Such recurring non-cash charges may also undermine investor confidence, complicate capital allocation decisions and increase perceived business risk.

The average M stock price target is $18.33, implying 2.17% upside potential.

To learn more about Macy’s’ risk factors, click here.