Macy's, Inc. (M.US) Q4 performance is mixed, weak guidance dragging down stock prices in pre-market trading.

On Thursday before the stock market opened, Macy's, Inc. (M.US) released its fourth-quarter performance for the fiscal year 2024. Macy's, Inc. reported lower-than-expected sales for the fourth quarter, but better-than-expected profits. However, the company's performance guidance for the year 2025 was weak. As a result, as of the time of writing, Macy's, Inc. was down nearly 4% in pre-market trading. According to the financial report, Macy's, Inc. had a total revenue of $8.007 billion for the fourth quarter, a 4% decrease from the same period last year's $8.375 billion. Net sales were $7.77 billion, a 4% decrease from $8.12 billion in the same period last year, slightly below the market consensus expectation of $7.8 billion. Adjusted earnings per share were $1.80, exceeding the market consensus expectation of $1.54. CEO Tony Spring stated that Macy's, Inc. has completed the first year of its "Bold New Chapter" transformation strategy, which has driven the highest comparable sales for the company in the past year - the best performance in the last 11 quarters. Tony Spring has focused on closing underperforming Macy's, Inc. stores, while employing more staff in the 125 stores he and his team believe have more potential, and improving product displays. This move has been well received on Wall Street. He is working to streamline Macy's, Inc.'s business to adapt to decades-long declining demand for goods in department stores and make the company more profitable. Data shows that Macy's, Inc. closed 64 stores last year and plans to close another 86 stores in the next two years. While this strategy makes financial sense, analysts point out that implementing these changes now is not easy given that Macy's, Inc.'s mass-market shoppers are facing economic challenges such as inflation. Looking ahead, Macy's, Inc. expects net sales for the fiscal year 2025 to be between $21 billion and $21.4 billion, with the midpoint of this forecast lower than the market consensus of $21.3 billion. The company also predicts that adjusted earnings per share for the fiscal year 2025 will be between $2.05 and $2.25, lower than the market consensus of $2.29. Macy's, Inc.'s expectations for sales and profits in fiscal year 2025 are more pessimistic than the market, indicating a cautious stance by the company's management towards consumer spending in the United States. The company also expects a 2% year-on-year decline in sales for e-commerce and stores open for at least one year, meaning the company is falling behind the plan set by Tony Spring - who promised last year that from 2025 onwards, comparable sales would increase by a lower single-digit percentage.