Macy’s (M) is set to release its first quarter earnings report, with a buyout bid lingering in the background.
On Tuesday morning, the department store chain is expected to report $4.81 billion in revenue — a decline of 3.43% compared to last year — and adjusted earnings per share of $0.14.
This is the first quarterly report since CEO Tony Spring, who took the helm earlier this year, rolled out his new strategy, “A Bold New Chapter.”
The strategy includes plans to close 150 underperforming stores, focusing its resources on improving existing stores and product assortment, and investing in digital sales.
The plan is “designed to create a more modern Macy’s, Inc. that is expected to generate meaningful value for our shareholders in the years ahead,” Spring said in a release following the company’s Q4 results.
UBS analyst Jay Sole said it is “unlikely” that the new initiatives will make a difference.
In a note to clients, Sole wrote, “These initiatives are not part of our base case. However, they are part of our upside scenario.” He identified the three key areas as “Macy’s Backstage, Macy’s small store initiative, and its omni-channel service improvements, both online and in-store.”
Since 2012, Macy’s has lost 25% of its market share “primarily to Off-Price retailers, brands, and Amazon,” per Sole.
The company’s same-store sales are expected to decline 2.78% year over year, a smaller drop than the 7.3% decrease seen in 2023 Q1.
CFRA analyst Zachary Warring expects sales to keep dropping, “with a low-single-digit decline over the next five years,” he wrote in a client note.
It’s unclear if the company will be providing any updates about Arkhouse Management and its partner Brigade’s $6.6 billion offer to take the department chain private. In mid-March, both said in an SEC filing that they were working on a confidentiality agreement with Macy’s that would allow the buyers to conduct financial due diligence.
The earnings rundown
Here’s what Wall Street expects from Macy’s, according to Bloomberg data, compared to Q1 2023 results:
-
Net sales: $4.81 billion compared to $4.98 billion a year ago
-
Adjusted EPS: $0.14 compared to $0.56 a year ago
-
Same-store sales: -2.78% compared to -7.20% a year ago
-
Gross margin: 39.63% compared to 40.00% a year ago
-
Adjusted net income: $39.6 million compared to $157 million a year ago
—
Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.