US department store chain Macy’s reported a decline in total revenue to $4.79bn in the first quarter of fiscal 2025, compared to $5bn in the corresponding period of the previous year.
During the 13 weeks to 3 May 2025, the retailer’s net sales fell 5.1% to $4.59bn, inclusive of store closures, with comparable sales decreasing 2% on an owned basis and 1.2% on an owned-plus-licensed-plus-marketplace basis.
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Bloomingdale’s and Bluemercury experienced sales growth, which was overshadowed by a decrease at Macy’s.
Net sales of Macy’s banner saw a reduction of 6.5%, inclusive of store closures, while Bloomingdale’s net sales rose 2.6%, with a 3% increase in comparable sales on an owned basis and a 3.8% rise on an owned-plus-licensed-plus-marketplace basis.
Bluemercury also reported a 0.8% increase in net sales and a 1.5% rise in comparable sales on an owned basis.
Generally accepted accounting principles net income also fell to $38m, down from $62m in Q1 FY24, with diluted earnings per share dropping to $0.13 from $0.22.
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By GlobalDataThe gross margin rate remained steady at 39.2%, balancing improved merchandise margins against increased delivery expenses as a percentage of net sales.
Macy’s selling, general and administrative (SG&A) expenses slightly increased by $2m to $1.9bn in Q1 FY25, with the company investing savings from closed stores into customer initiatives within its go-forward business, including the re-imagining of 125 locations.
SG&A expenses rose to 39.9% of total revenue, a 170 basis-point increase due to lower net sales.
Macy’s chairman and chief executive officer Tony Spring stated: “Our first quarter results give us confidence that we have the right strategy and team in place to navigate the current environment while we continue to invest in our customer on the path to returning Macy’s Inc to sustainable profitable growth.”
The retailer has updated its annual forecast to reflect tariffs, changes in consumer discretionary spending and a more competitive promotional environment.
The company has maintained its full-year net sales projection at $21bn to $21.4bn but reduced its expected adjusted earnings before interest, taxes, depreciation and amortisation margin to 7.4%-7.9%, down from the previously anticipated range of 8.4% to 8.6%.
In January 2025, Macy’s confirmed the impending closure of 66 of its stores, marking a decisive step in its strategic overhaul.
