Macy's (M) Q4 2023 Earnings
GAAP diluted loss per share of $(0.26) included $1.0 billion of impairment, restructuring and other costs (roughly $950 million non-cash asset impairment for ~150 planned store closures) and $5 million in settlement charges.
Did M Beat Earnings? Q4 2023 Results
Yes. Macy's reported Q4 2023 earnings of $2.45 a share on Feb 27, 2024, beating the $1.96 consensus estimate by 25.0%. Revenue was $8.1B against a $8.2B estimate.
Macy's delivered a stronger-than-expected bottom line in Q4 2023, even as its top line came in just shy of forecasts, with the results arriving alongside a sweeping strategic overhaul that will reshape the department store chain over the next three years. Adjusted diluted EPS of $2.45 cleared the $1.96 consensus estimate by 25.00%, powered by a 340-basis-point expansion in gross margin to 37.5% as the company pulled back on clearance markdowns and tightened delivery costs. Revenue of $8.12 billion fell 4.8% year over year and edged just under the $8.15 billion consensus, with comparable owned-plus-licensed sales down 4.2% on a 13-week basis. The headline number was overshadowed by "A Bold New Chapter," a restructuring plan that triggered roughly $950 million in non-cash asset impairment charges tied to approximately 150 planned store closures, producing a GAAP net loss of $0.26 per diluted share. Looking ahead, management guided fiscal 2024 adjusted diluted EPS of $2.45 to $2.85 on net sales of $22.20 billion to $22.90 billion, describing the year as a transition period before expecting a return to low-single-digit comparable sales growth beginning in 2025.
- Gross margin expanded 340 basis points to 37.5%, driven by lower clearance markdowns and improved delivery expense leverage
- Merchandise margin improved 260 basis points year over year
- Bluemercury comparable sales up 2.3% driven by skincare and color cosmetics
- Beauty category strength across nameplates, particularly fragrances and prestige cosmetics
- SG&A expense dollars decreased $51 million year-over-year reflecting ongoing expense discipline
- Net credit card revenue declined 26% to $195 million due to higher net credit losses
“I am grateful to all our teams for their continued commitment to our customers during the holiday season. Throughout the fourth quarter, we delivered an improved omnichannel experience, with effective merchandising and a clear demonstration of value that resulted in a strong close to the year.”
Macy's CEO, on the earnings call
What Was Macy's's Outlook in Q4 2023?
For fiscal 2024, Macy's guided net sales of $22.2 billion to $22.9 billion and adjusted diluted EPS of $2.45 to $2.85, with comparable owned-plus-licensed-plus-marketplace sales expected to range from down ~1.5% to up 1.5%. The company characterized 2024 as a transition and investment year. Adjusted diluted EPS guidance excludes any potential impact from the proposed credit card late fee ruling and does not consider future share repurchases. Beginning in 2025, Macy's expects low-single-digit annual comparable owned-plus-licensed-plus-marketplace sales growth, annual SG&A dollar growth below the historic rate of inflation of 2%-3%, annual adjusted EBITDA dollar growth in the mid-single-digit range, capital spend below 2024 levels, and free cash flow to return to pre-pandemic levels.
M YoY Financials
| Metric | Q4 2023 | Q4 2022 | Year over year |
|---|---|---|---|
| Revenue | $8.1B | $8.5B | −4.8% |
| Gross Profit | $3.0B | $3.1B | −1.0% |
M Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.