Pic: Steve Cukrov - stock.adobe.com
Gross margin for the quarter was $1.9 billion, representing 39.6 per cent of net sales, down from 40.2 per cent last year. Total revenue of the company, including $161 million from other revenue sources, reached $4.9 billion, compared to $5.8 billion in the same quarter last year, Macy’s said in a press release.
The cost of sales was $2.9 billion, representing 60.4 per cent of net sales, marginally higher than 59.8 per cent in Q3 2023. Selling, general, and administrative (SG&A) expenses increased to $2,064 million, accounting for 42.1 per cent of net sales, compared to 40.5 per cent in the prior year quarter. Gains on the sale of real estate contributed $66 million to the operating income, up from $5 million in the same period last year. Additionally, the company recorded a net benefit of $23 million in impairment, restructuring, and other benefits, compared to a cost of $15 million in Q3 2023. As a result, operating income stood at $64 million (1.3 per cent of total revenue), slightly lower than $83 million (1.6 per cent) in the prior year.
Net interest expense decreased to $32 million from $35 million in the same quarter last year. The company reported net income of $28 million, down from $41 million in Q3 2023. Basic and diluted earnings per share were $0.10, compared to $0.15 in the same period last year. Depreciation and amortisation expenses amounted to $228 million, marginally lower than $231 million in Q3 2023.
Macy’s First 50 locations delivered third consecutive quarter of comparable sales growth, up 1.9 per cent YoY. Bloomingdale’s reported comparable sales growth of owned and owned-plus-licensed-plus-marketplace of 1.0 per cent and 3.2 per cent, respectively. Bluemercury reported comparable sales growth of 3.3 per cent. Asset sale gains of $66 million, which was ahead of the company’s prior guidance, added the press release.
“Our third quarter results reflect the positive momentum we are building through our Bold New Chapter strategy,” said Tony Spring, chairman and chief executive officer (CEO) of Macy’s, Inc. “We are encouraged by the consistent sales growth in our Macy's First 50 locations and the strong performance of Bloomingdale's and Bluemercury. Quarter-to-date, comparable sales continue to trend ahead of third quarter levels across the portfolio. Looking ahead, we remain committed to achieving sustainable, profitable growth for Macy’s, Inc.”
Nine-month (9M) financials
Macy's, Inc has reported net sales of $14.525 billion in the 9M period of 2024, a decrease from $14.972 billion in the prior 9M period. Total revenue, including other revenue of $474 million, stood at $15 billion, down from $15.49 billion in the same period of 2023. Gross margin improved to 39.8 per cent of net sales, up from 39.4 per cent, attributed to a decrease in cost of sales as a percentage of net sales (60.2 per cent compared to 60.6 per cent in 2023).
The operating income of the company was $410 million, representing 2.7 per cent of total revenue, compared to $450 million (2.9 per cent) in the previous year. Gains on the sale of real estate rose significantly to $103 million, contributing to overall income, while impairment and restructuring adjustments resulted in a modest benefit of $5 million compared to a cost of $21 million in 2023.
Net income for the 9M period increased to $240 million, up from $173 million in 2023. Basic earnings per share rose to $0.86, with diluted earnings per share at $0.85, compared to $0.63 and $0.62, respectively, in the prior year. Depreciation and amortisation expenses were slightly lower at $657 million versus $665 million in 2023. Macy's reported 277.5 million common shares outstanding at the end of the period, an increase from 273.7 million in 2023.
Outlook
For full year 2024, Macy’s projects net sales between $22.3 billion and $22.5 billion, slightly up from the previous guidance of $22.1 billion to $22.4 billion. The comparable owned-plus-licensed-plus-marketplace sales change is expected to be down approximately 1 per cent to flat compared to 2023, improving from earlier expectations of a decline of 2 per cent to 0.5 per cent.
The gross margin rate has been adjusted downward to 38.2 per cent to 38.3 per cent, compared to earlier estimates of 38.6 per cent to 38.8 per cent in August and an initial forecast of 39.0 per cent to 39.2 per cent. Adjusted EBITDA as a percentage of total revenue is now anticipated to be between 8.0 per cent and 8.4 per cent, compared to the prior range of 8.2 per cent to 8.7 per cent and an earlier high estimate of 9.0 per cent. Adjusted diluted earnings per share are revised to $2.25 to $2.50, down from the earlier guidance of $2.34 to $2.69.
Fibre2Fashion News Desk (SG)