Macy’s (NYSE:M) gained in pre-market trading after the retailer’s Q1 earnings topped estimates. The department store operator reported adjusted diluted earnings of $0.27 per share in the first quarter, compared to $0.56 per diluted share in the same period last year. This exceeded analysts’ expectations of $0.16 per share.
The company posted net sales of $4.8 billion, a decline of 2.7% year-over-year, compared to Street estimates of $4.82 billion. Macy’s comparable sales declined by 1.2% in the first quarter based on its company-owned stores and were down by 0.3% overall.
Macy’s Restructuring Efforts Are Working
Macy’s strong Q1 earnings were an indication that the company’s restructuring initiatives were working. The company unveiled a “Bold New Chapter” initiative around three months ago, announcing plans to close nearly 150 stores and prioritize investment in 350 locations. Additionally, the retailer announced plans to open up to 45 new Bloomingdale’s and Bluemercury stores, as well as to streamline and monetize its supply chain.
Macy’s FY24 Outlook
The retailer updated its outlook for FY24 and sees it as a year of transition, reflecting investment in key customer-focused initiatives, supported by a strong balance sheet.
Macy’s now expects FY24 net sales in the range of $22.3 billion to $22.9 billion, while comparable sales are likely to fall between 1% and up to 1.5% year-over-year. Additionally, in FY24, the retailer has forecasted adjusted diluted earnings in the range of $2.55 to $2.90 per share, compared to its prior outlook of $2.45 to $2.85 per share.
Is Macy’s a Good Stock?
Analysts remain sidelined about Macy’s stock, with a Hold consensus rating based on two Buys, seven Holds, and one Sell. Over the past year, Macy’s has increased by more than 30%, and the average Macy’s price target of $19.31 implies an upside potential of 1.1% from current levels. These analyst ratings are likely to change following Macy’s Q1 results today.
