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Macy's (M)
:M
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Macy's
(NYSE:M)63Neutral
Positive Factors
Revenue Model
There is increased confidence in a long-term thesis supporting higher-priced content tiers and a sustainably profitable revenue model.
Subscriber Growth
An increase in Premium Subscribers partially offsets a reduction in ARPU, indicating potential for conservative ARPU growth.
Negative Factors
Revenue Estimates
A revision in revenue estimates reflects a slight decrease due to mix-shift towards lower monetizing regions and a reduction in ad-supported revenue projections.
Macy's (M) vs. S&P 500 (SPY)
Market Cap
$3.71B
Dividend Yield4.96%
Average Volume (3M)5.81M
Price to Earnings (P/E)22.5
Beta (1Y)1.25
Revenue Growth-2.68%
EPS Growth-75.81%
CountryUS
Employees85,581
SectorConsumer Cyclical
Sector Strength53
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)0.59
Shares Outstanding277,635,800
10 Day Avg. Volume6,475,973
30 Day Avg. Volume5,813,080
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.17
Price to Cash Flow (P/CF)-5.80
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.78Price Target Upside18.11% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Macy's Business Overview & Revenue Model
Company DescriptionMacy's, Inc. engages in the retail of apparel, accessories, cosmetics, home furnishings, and other consumer goods. Its brands include Macy's, Bloomingdale's, and Bluemercury. It offers men's, women's, and children's apparel, women's accessories, intimate apparel, shoes, cosmetics, fragrances, as well as home and miscellaneous products. The company was founded by Rowland Hussey Macy Sr. on March 6, 1929 and is headquartered in Cincinnati, OH.
How the Company Makes MoneyMacy's generates revenue through the sale of a broad spectrum of products in both its physical retail stores and its e-commerce platform. The company’s primary revenue streams include the sale of apparel, accessories, home furnishings, and beauty products. Macy's leverages seasonal events, promotional sales, and exclusive brand collaborations to drive foot traffic and increase sales. Additionally, Macy's benefits from its loyalty programs, which incentivize repeat purchases and enhance customer retention. The company also explores strategic partnerships and exclusive merchandise agreements to attract a wider audience and boost its market presence. Furthermore, Macy's capitalizes on real estate assets through leasing arrangements and other revenue-generating strategies.
Macy's Financial Statement Overview
Summary
Macy's demonstrates solid profitability margins and improved balance sheet strength. However, challenges remain in revenue growth and efficient equity utilization. Cash flow from operations is strong, but declining free cash flow growth could impact future investment capabilities. Overall, Macy's has stability with room for growth but faces challenges in scaling revenue.Income Statement
The income statement shows a moderate performance with a stable gross profit margin and net profit margin over the TTM, though both have declined from previous annual periods. The TTM gross profit margin is approximately 40.9%, and the net profit margin stands at 0.72%. Revenue has decreased compared to previous years, indicating a contraction in sales which could be concerning. The EBIT margin for TTM is stronger at 5.66%, suggesting effective cost management. EBITDA margin is also positive at 4.37%. While profitability is present, the decline in revenue and marginal profit growth suggest challenges in maintaining growth momentum.67
Positive
Balance Sheet
The balance sheet reflects a solid equity position with stockholder’s equity significantly increasing in the TTM to match total assets, indicating a stronger equity ratio. The debt-to-equity ratio has improved, signifying reduced leverage risk. Return on equity (ROE) is approximately 0.98% in the TTM, showing limited return generation on equity. Overall, the company has strengthened its financial position, but the low ROE highlights the need for better utilization of equity to generate profit.78
Positive
Cash Flow
Cash flow analysis reveals a strong operating cash flow to net income ratio of approximately 6.61 in the TTM, indicating efficient cash generation from operations. Free cash flow has decreased from previous periods, with the TTM free cash flow to net income ratio at 1.33. Free cash flow growth has been negative, reflecting reduced cash availability for reinvestment or debt reduction. While operational cash flow remains robust, declining free cash flow growth suggests potential liquidity constraints.72
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 23.37B | 23.87B | 25.30B | 25.29B | 18.10B | 25.33B | Gross Profit |
| 9.55B | 9.72B | 10.00B | 10.34B | 5.81B | 10.16B | EBIT |
| 1.32B | 382.00M | 1.73B | 2.35B | -956.00M | 970.00M | EBITDA |
| 1.02B | 1.16B | 2.54B | 3.00B | -3.54B | 1.91B | Net Income Common Stockholders |
| 169.00M | 105.00M | 1.18B | 1.43B | -3.94B | 564.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.03B | 1.03B | 862.00M | 1.71B | 1.68B | 685.00M | Total Assets |
| 16.25B | 16.25B | 16.87B | 17.59B | 17.71B | 21.17B | Total Debt |
| 6.34B | 6.34B | 6.40B | 6.83B | 8.04B | 7.08B | Net Debt |
| 5.31B | 5.31B | 5.54B | 5.11B | 6.37B | 6.39B | Total Liabilities |
| 12.11B | 12.11B | 12.78B | 13.97B | 15.15B | 14.79B | Stockholders Equity |
| 4.14B | 4.14B | 4.08B | 3.62B | 2.55B | 6.38B |
| Cash Flow | Free Cash Flow | ||||
| 224.00M | 312.00M | 320.00M | 2.12B | 183.00M | 451.00M | Operating Cash Flow |
| 1.12B | 1.30B | 1.61B | 2.71B | 649.00M | 1.61B | Investing Cash Flow |
| -652.00M | -913.00M | -1.17B | -370.00M | -325.00M | -1.00B | Financing Cash Flow |
| -514.00M | -220.00M | -1.30B | -2.38B | 699.00M | -1.12B |
Macy's Technical Analysis
Negative
13.36
Price Trends
15.31
Negative
15.49
Negative
16.10
Negative
Market Momentum
-0.34
Positive
32.65
Neutral
9.95
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For M, the sentiment is Negative. The current price of 13.36 is below the 20-day moving average (MA) of 14.71, below the 50-day MA of 15.31, and below the 200-day MA of 16.10, indicating a bearish trend. The MACD of -0.34 indicates Positive momentum. The RSI at 32.65 is Neutral, neither overbought nor oversold. The STOCH value of 9.95 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for M.
Macy's Risk Analysis
Macy's disclosed 27 risk factors in its most recent earnings report. Macy's reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Macy's Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $136.85B | 28.58 | 59.57% | 1.21% | 3.95% | ― | |
75 Outperform | $6.19B | 10.57 | 32.07% | 0.27% | -4.13% | -17.60% | |
72 Outperform | $14.62B | 31.54 | 17.02% | ― | 12.18% | 60.91% | |
67 Neutral | $4.00B | 15.46 | 30.65% | 3.13% | 3.57% | 120.60% | |
63 Neutral | $3.71B | 22.47 | 0.98% | 4.96% | -2.68% | -75.81% | |
63 Neutral | $1.27B | 5.13 | 6.54% | 17.65% | -4.33% | ― | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% |
* Consumer Cyclical Sector Average
Performance Comparison
M
Macy's
13.36
-6.12
-31.42%
DDS
Dillard's
367.45
-16.02
-4.18%
KSS
Kohl's
11.37
-14.01
-55.20%
JWN
Nordstrom
24.26
4.11
20.40%
TJX
TJX Companies
121.74
25.64
26.68%
BURL
Burlington Stores
230.27
18.16
8.56%
Macy's Earnings Call Summary
Earnings Call Date: Dec 11, 2024 | % Change Since: -19.23% | Next Earnings Date: Mar 6, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in certain segments such as Bluemercury and digital marketplace expansion, coupled with effective inventory management and gross margin improvements. However, these positives were offset by declines in net sales and credit card revenues, as well as challenges in specific product categories. The overall sentiment reflects a balanced view of opportunities and challenges.Highlights
Positive Adjusted Diluted EPS
Third quarter adjusted diluted EPS of $0.21 was above expectations, driven by better-than-expected sales, gross margin, and SG&A rates.
Inventory Management Success
Ended the quarter with a clean inventory position, down 6% from last year and 17% from 2019. Aged inventory data combined was down 26%.
Backstage and Bloomingdale's Outlet Performance
Backstage comparable owned sales outperformed Macy's full-line stores by about 720 basis points, while Bloomingdale's outlet sales outperformed full-line stores by 860 basis points.
Bluemercury Growth
Bluemercury achieved its 11th consecutive quarter of growth, with both net and comparable sales up 2.5%.
Macy's Digital Marketplace Expansion
Macy's digital marketplace grew with over 1,500 brands and increased gross merchandise value by approximately 22%.
Gross Margin Improvement
Gross margin rate was 40.3%, 160 basis points higher than the previous year, driven by improved merchandise margin and reduced delivery expenses.
Lowlights
Decline in Net Sales
Net sales of $4.86 billion declined 7.1% versus the prior year, with comparable sales on an owned plus licensed basis decreasing 6.3%.
Credit Card Revenue Decline
Credit card revenues declined $64 million or 100 basis points from last year, primarily due to higher bad debt assumptions.
Challenges in Certain Categories
Sales declined in categories such as women's casual sportswear, big ticket, and handbags at Macy's and in men's, home, and designer handbags at Bloomingdale's.
Company Guidance
During the Macy’s third quarter earnings call, the company provided guidance for the remainder of the fiscal year, projecting net sales between $7.95 billion and $8.25 billion for the fourth quarter, which includes the 53rd week. The gross margin rate is expected to improve by at least 220 basis points compared to the fourth quarter of 2022. The adjusted diluted EPS is anticipated to range from $1.85 to $2.10, accounting for a $0.07 impact from a $10 million shift in SG&A expenses and an additional $15 million investment in marketing and growth vectors. Inventory at the end of the quarter is projected to remain flat year-over-year but down approximately 18% from 2019 levels. For the full year, Macy’s anticipates net sales of $22.9 billion to $23.2 billion, with a comparable sales decline of 6% to 7% on a 52-week owned plus licensed basis, and an adjusted diluted EPS between $2.88 and $3.13.Macy's Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Macy’s Appoints Robert Chavez to Board of Directors
Positive
Jan 6, 2025
Macy’s, Inc. has appointed Robert Chavez, a seasoned retail executive with extensive experience in the luxury segment, as an independent director on its Board of Directors, effective April 1, 2025. Chavez’s appointment is a strategic move to leverage his expertise in e-commerce and retail expansion as Macy’s aims to enhance market share and shareholder value, while Sara Levinson will retire from the board in accordance with corporate governance principles.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.