Macy’s raises FY25 outlook as Q2 earnings surpass forecast

Macy’s comparable sales increased 0.8% on an owned basis and a 1.9% rise on an owned-plus-licensed-plus-marketplace (O+L+M) basis in Q2 FY25.

Despite positive sales across all Macy’s brands, net sales saw a 2.5% decrease to $4.81bn due to store closures, compared to $4.94bn in the prior year.

Macy’s namesake brand experienced a 3.8% drop in net sales, while Bloomingdale’s and Bluemercury saw increases of 4.6% and 3.3%, respectively.

Macy’s chairman and chief executive officer Tony Spring said: “Our teams achieved better than expected top- and bottom-line results during the second quarter, driven by our strongest comparable sales growth in 12 quarters, reflecting the strong performance in Macy’s Reimagine 125 locations, Bloomingdale’s and Bluemercury.

“Our performance highlights the advantages of being a multi-brand, multi-category, omni-channel retailer. The substantive, enterprise-wide improvements across our business, with a strong focus on customer experience, give us further confidence that our Bold New Chapter initiatives can drive sustainable, long-term profitable growth.”

Macy’s gross margin decreased by 80 basis points to 39.7%, due to strategic price reductions on early spring merchandise to manage inventory levels effectively and the cost impact of goods purchased at previously higher tariff rates, said the company.

Selling, general and administrative expenses declined by $29m to $1.94bn due to closed locations and cost-saving measures, although these were somewhat offset by investments in business growth strategies.

Operating income for the quarter was reported at $149m, a decrease from $222m in the previous year.

Macy’s posted a GAAP net income of $87m and an adjusted net income of $113m, both lower than the previous year’s figures.

The company concluded Q2 with $829m in cash and cash equivalents and maintained $2.0bn in available credit.

Total debt stood at $2.6bn as of the end of the quarter, including $194m in redeemed debt set to settle post-quarter end.

Macy’s has increased its net sales forecast to range between $21.15bn and $21.45bn from the previous expectation of $21.0bn to $21.4bn.

Comparable sales are expected to decline slightly compared to the previous year, with a modest decrease in gross margin rate anticipated.

Adjusted diluted earnings per share are projected to range from $1.70 to $2.05.

In the third quarter, net sales are expected to hit between $4.5bn and $4.6bn.

“Macy’s raises FY25 outlook as Q2 earnings surpass forecast” was originally created and published by Just Style, a GlobalData owned brand.