Macy’s Earns a Profit in Q2 2024 Despite Decline in Net Sales

For the quarter ending Aug. 3, Macy’s made a profit of $150 million, or 53 cents per share. This is significant as the company reported a $22 million loss, or 8 cents per share, for the same period last year.

However, as consumers deal with an eroding dollar, net sales declined nearly 4%, from $5.13 billion last year to $4.94 billion. Comparable sales at Macy’s flagship stores dropped 3.6%, while Macy’s-owned Bloomingdale’s fell 1.4%. Its cosmetics chain, Bluemercury, saw store sales rise 2%.

Macy’s predicts annual net sales to reach between $22.1 billion and $22.4 billion. This is lower than previous estimates of $22.3 billion to $22.9 billion.

“We see that there is definitely a softness, a carefulness, a delay in the conversion of purchasing,” Macy’s CEO Tony Spring said in an interview with CNBC. “And people on the things that they want, the things that are priced sharply, on the newness, they’re responding, but even the affluent consumer is not spending like they were a year ago.”

To slow the decline, Macy’s plans to close 150 poor-performing stores by 2027, including 50 by the end of this year. Meanwhile, the department store giant will add more salespeople and make renovations to its remaining 350 locations. As part of the revamp, Macy’s will also concentrate on luxury items, which have historically maintained profitability.

The turnaround plan is already showing some results. Fifty stores have already received upgrades and have outperformed other Macy’s locations. At these stores, comparable sales reached positive territory for the second quarter in a row, with the most recent quarter rising 1%.

Meanwhile, Macy’s may be on the hunt for a buyout. Investment firms Arkhouse Management and Brigade Management were previously looking to purchase Macy’s for $5.8 billion. However, even after raising the offer, Macy’s terminated negotiations last month, saying it did not receive an “actionable proposal” before a July 25 deadline.