© Reuters. FILE PHOTO: A buyer exits the Macy’s flagship division retailer in midtown Manhattan in New York Metropolis, U.S., December 11, 2023. REUTERS/Brendan McDermid/File Picture
By Katherine Masters and Savyata Mishra
NEW YORK (Reuters) -Macy’s forecast annual gross sales beneath market expectation on weak demand for its attire and footwear and stated it will shut 150 shops by way of 2026 in a brand new turnaround plan, sending its shares down about 2% earlier than the bell on Tuesday.
The division retailer chain didn’t present particulars on the placement of shops or whether or not there can be extra layoffs. It additionally plans to monetize $600 million-$750 million of property over the following three years.
“It (retailer closures) was in all probability inevitable. It’s nonetheless not excellent news, although, as a result of it represents Macy’s incapability to make these shops extra productive,” stated David Swartz, senior analyst at Morningstar.
The transfer comes as sluggish gross sales has landed the upscale retailer within the crosshairs of activist shareholders and attracted potential bidders.
Macy’s (NYSE:) is going through a proxy battle from Arkhouse Administration after the funding agency nominated 9 director candidates final week.
The brand new plan is along with Macy’s choice in January to shut 5 shops and reduce 2,350 jobs, or 3.5% of its general workforce. The retailer had shops in 718 areas as of fourth quarter finish, down from 723 areas three months in the past.
It additionally stated it will open 15 Bloomingdale’s areas and at the least 30 new Bluemercury shops over the following three years to speed up progress for its better-performing luxurious manufacturers.
Its vacation quarter comparable gross sales declined 4.2% on an owned-plus-licensed foundation, higher than analysts’ estimates of 5.8% drop, as steep reductions drew consumers.
Nevertheless, web bank card income fell 26% to $195 million, in an indication that financial stress, notably amongst its low- and middle-income clients, led to greater dangerous money owed.
Macy’s took a $1 billion cost within the fourth quarter associated to the restructuring. Excluding gadgets, it earned $2.45 per share, above LSEG estimates of $1.96.
It expects fiscal 2024 web gross sales between $22.2 billion to $22.9 billion, in comparison with analysts’ common estimate of $22.95 billion.
It forecast adjusted earnings per share between $2.45 and $2.85, the midpoint of which is beneath expectations of $2.76.
