Macy’s Inc. (M) swung to a loss in the latest quarter while experiencing a decline in sales. The company reported a fiscal second-quarter net loss of $22 million, or 8 cents per share, compared to net income of $275 million, or 99 cents per share, in the same period last year. Macy’s attributed its net loss to a non-cash settlement charge linked to the transfer of pension obligations for certain retirees and beneficiaries.
Adjusted Earnings Beat Expectations
On an adjusted basis, Macy’s earnings per share fell to 26 cents from $1.00, but exceeded the FactSet consensus of 14 cents per share. Despite the decline in earnings, the company’s performance surpassed analysts’ expectations.
Decline in Total Revenue
Total revenue for the quarter dropped to $5.28 billion from $5.83 billion, slightly above analysts’ estimates of $5.26 billion based on three independent estimates. However, comparable sales at Macy’s owned stores fell by 8.2%, while comparable sales across owned and licensed stores decreased by 7.3% compared to the previous year.
Strategic Markdowns and Promotions
In response to the challenging sales figures, Chief Executive Jeff Gennette stated, “Our teams surgically implemented clearance markdowns and promotions to effectively clear spring seasonal receipts and ensure fresh assortments for the fall and Holiday seasons.” Despite ongoing macroeconomic uncertainty, Macy’s remains cautious but maintains its prior full-year outlook, which predicts revenue of $22.8 billion to $23.2 billion and adjusted earnings per share of $2.70 to $3.70.
Macy’s acknowledges the impact of macroeconomic pressures and uncertainty on consumer behavior but continues to navigate through a challenging retail landscape.