Disappointing Macy’s Earnings Mask Evidence of Green Shoots
The retailer’s latest turnaround plan seems to be working even though the performance of its shares suggest otherwise.
Better days are ahead.
Photographer: Eric Thayer/Bloomberg via Getty Images
Macy’s Inc. stock has fallen about 38% this year and is poised to close at its lowest level since January 2021 after reporting yet another slowdown in sales growth on Tuesday. But rather than punish one of the US’s oldest and best-known retailers, there are plenty of reasons investors might want to give the company another chance — albeit with a caveat.
Although Macy’s posted a net loss in the second quarter, store sales fell less than forecasted. And the company has made headway in clearing out a bloated inventory, watching it fall 10% from a year earlier and plunge 18% from 2019. Although that entailed offering big discounts on seasonal summer goods, which eroded profit margins, it made way for new merchandise that should help bolster margins with Tony Spring, the head of its reinvigorated Bloomingdale’s unit, set to take over as the company’s chief executive officer in a matter of months.