Macy’s Inc. joined the chorus of U.S. retailers reporting lackluster sales in the fourth quarter of 2024 in a challenging environment, sending its shares lower on Wall Street.
This week, the owner of brand-name retail stores including Macy’s, Bloomingdale’s, and Bluemercury, reported a 5.3 percent decline in net sales, with comparable sales down 1.9 percent on an owned basis and down 0.9 percent on an owned-plus-licensed-plus-marketplace basis.
Bloomingdale’s reported a comparable sales increase of 4.8 percent, while Bluemercury recorded a sixteenth consecutive quarter of comparable sales growth, up 6.2 percent.
The strong showing in these business areas gave the retailer’s management something to cheer about amid the company’s turnaround strategy.
“As we close out the first year of the Bold New Chapter strategy, investments in the customer experience enabled us to achieve our highest comparable sales of the year, our best performance in 11 quarters,” said Tony Spring, chairman and CEO of Macy’s, in a statement.
“At Macy’s, our First 50 locations delivered four quarters of increased sales, while our luxury nameplates, Bloomingdale’s and Bluemercury, achieved accelerated annual sales growth. As we enter the second year of our strategy, we plan to scale initiatives resonating with our customers to drive long-term profitable growth and further unlock shareholder value.”
Adrian Mitchell, the company’s chief operating officer and chief financial officer, struck an optimistic tone. “Building on our momentum, we continue to elevate the customer experience, deliver operational excellence, and make prudent capital investments,” he said in a statement. “We remain committed to generating healthy free cash flow and returning capital to shareholders through share buybacks and predictable quarterly dividends.”
R.J. Hottovy, head of analytical research at Placer.ai, sees some positive signs in Macy’s fourth-quarter financial performance.
“Macy’s fourth-quarter update highlighted some encouraging trends despite an increasingly uncertain consumer environment,” he told The Epoch Times.
“Management noted strong visitation trends at Macy’s ‘First 50’ stores—locations that have been remodeled and offer expanded services and curated product assortments—as well as at 100 stores that received enhanced staffing for women’s shoes and handbags.”
Hottovy sees these positive trends as suggesting long-term potential as these features are expanded across the chain. “However, management also acknowledged that inflation and other macroeconomic pressures continue to impact consumers, which could weigh on visitation trends in the near term despite the brand’s recent improvements,” he said.
Macy’s shares fell on March 6 but were up more than 5.7 percent as of 11 a.m. ET on March 7. Over the past 12 months, the company’s shares have been down more than 30 percent, underperforming the broader market, with the S&P 500 Index up 12 percent over the same period.
Cathy Black, an adjunct professor of management at Long Island University, thinks Macy’s mall traffic is a problem.
“Mall traffic has been declining over the past 10 years due to online shopping delivered directly to the consumer,” she told The Epoch Times via email. “They find it more convenient to have their items shipped directly to their doorstep than schlepping to malls.”
In addition, she said she believes that Macy’s is also behind other companies with the implementation of online promotions and has yet to target the right age groups.
“They do not use QR [quick-response] codes effectively in their advertising campaigns in newspapers or mailings to their consumer lists,” she said. “They are also not targeting the age groups between 14–25 well, especially [menswear] from ages 14–23.”
These challenges make Georgios Koimisis, an associate professor of economics and finance at Manhattan University, skeptical about Macy’s recent financial performance.
“Even though Macy’s surprised Wall Street by boosting profits, their sales dipped because cautious shoppers are hesitant to open their wallets amid an uncertain economic climate,” he told The Epoch Times via email.
“Essentially, consumers are holding back due to anxiety about rising prices, and retailers like Macy’s are caught in the middle, managing to stay profitable by controlling costs and enhancing their stores.”
Koimisis said he believes that to successfully navigate tariff uncertainties and other economic pressures, Macy’s should double down on unique store experiences that consumers cannot easily find elsewhere.
“By doing so, Macy’s reduces the pressure to compete solely on price,” he stated. “Additionally, strategically diversifying their supply chains could help Macy’s manage costs more predictably.”
