By Juveria Tabassum Dec 3 (Reuters) – Macy’s on Wednesday raised its annual targets for the second time this year and posted surprise quarterly profit, as the department store operator begins to see returns from its months-long turnaround efforts. However, Macy’s shares reversed course to fall nearly 6% in premarket trading after the company said […]
Business
Macy’s lifts annual targets, strikes cautious tone about holiday spending
Audio By Carbonatix
By Juveria Tabassum
Dec 3 (Reuters) – Macy’s on Wednesday raised its annual targets for the second time this year and posted surprise quarterly profit, as the department store operator begins to see returns from its months-long turnaround efforts.
However, Macy’s shares reversed course to fall nearly 6% in premarket trading after the company said its guidance assumed a “more choiceful” consumer in the key holiday shopping period as inflation pressures spending on non-essential goods.
Macy’s expects 2025 net sales to be between $21.475 billion and $21.625 billion, compared with its earlier forecast of $21.15 billion to $21.45 billion. It also sees annual adjusted earnings per share to be between $2 and $2.20, up from $1.70 to $2.05.
“It appears that they are striking a more cautious tone based on the guide,” said Charles Grom, analyst at Gordon Haskett Equity Research.
Rival Kohl’s has also raised its annual forecast for a second time this year, but executives noted that consumers remained under pressure and were seeking value.
Macy’s, like other retailers, has leaned heavily on promotions this holiday season, with deals events running all through November for Black Friday and Cyber Monday.
Department store operators have invested heavily in refreshing their stores and product offerings to revive demand and align with changing shopping trends after several years of losing out to online retailers and off-price chains.
Macy’s shut underperforming outlets under its namesake banner, tested smaller store formats and broadened its online product assortment, among other measures, as part of an effort led by CEO Tony Spring.
For the quarter ended November 1, Macy’s reported net sales of $4.71 billion, beating analysts’ average estimate of $4.62 billion, according to data compiled by LSEG.
On an adjusted basis, it reported a surprise profit of 9 cents per share, compared with estimates of a loss of 14 cents for the third quarter.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Shinjini Ganguli)