Shares of Macy’s Inc. fell Tuesday, after the department-store chain announced a plan to revitalize its business that includes closing 150 stores and resulted in a $1 billion charge.
Macy’s said the plan also includes monetizing up to $750 million of assets. And in a separate release, Macy’s reported fourth-quarter results that beat expectations.
“A Bold New Chapter serves as a strong call to action. It challenges the status quo to create a more modern Macy’s, Inc.,” said Chief Executive Tony Spring. “We are making the necessary moves to reinvigorate relationships with our customers through improved shopping experiences, relevant assortments and compelling value.”
The stock
M,
fell 0.8% in premarket trading.
Macy’s said the plan looks to revitalize the sales assortment, modernize the shopping experience and bolster its position in the luxury market, where its Bloomingdale’s and Bluemercury store brands have been outperformers.
And regarding store closures, Macy’s said it is looking to close 150 “unproductive” stores through 2026, including 50 by the end of the current fiscal year. The company also plans to increase investments in about 350 “go-forward” stores and continue the expansion of its small-format stores.
Over the next three years, Macy’s plans to “rationalize and monetize” its supply-chain assets, which could lead to the monetization of $600 million to $750 million of assets.
For the fiscal fourth quarter to Feb. 3, Macy’s said it swung to a net loss of $71 million, or 26 cents a share, from $508 million, or $1.83 a share, in the same period a year ago.
Excluding nonrecurring items, such as the $1 billion charge, of which about $950 million are for store closures over the next three years, adjusted earnings per share came in at $2.45, which was well above the FactSet consensus of $1.98.
Total revenue fell 2.4% to $8.38 billion, but that was above the FactSet consensus of $8.09 billion. Same-store sales, or sales of stores open at least a year, fell 5.4%, to miss expectations of a 4.7% decline.
For the current full fiscal year, the company expects adjusted EPS of $2.45 to $2.85, which surrounds the current FactSet consensus of $2.77.
Macy’s stock has run up 29.5% over the past three months through Monday, while the SPDR S&P Retail ETF
XRT
has rallied 17.8% and the S&P 500 index
SPX
has advanced 11.4%.
