Macy's (M) is scheduled to release its first-quarter earnings report, but an acquisition proposal is lingering in the background.
On Tuesday morning, the department store chain is expected to report revenue of $4.81 billion, down 3.43% from a year ago, and adjusted earnings per share of $0.14.
This is the company's first quarterly report since Tony Spring, who took over as CEO earlier this year, rolled out a new strategy called “A Bold New Chapter.”
The strategy includes plans to close 150 unprofitable stores and focus resources on improving existing stores and product assortments and investing in digital sales.
The plan is “aimed at creating a more modern Macy's company that we expect to create meaningful value for shareholders in the coming years,” Spring said in a release after the company's fourth quarter earnings. Stated.
Jay Saul, an analyst at UBS, said it was “unlikely” that the new initiative would make a difference.
“These efforts are not part of our base case, but are part of our upside case,” Sohl said in a note to clients. He identified three key areas: “Macy's backstage, Macy's smaller store efforts and improving omnichannel service both online and in stores.”
Since 2012, Macy's has lost 25% of its market share “primarily to off-price retailers, brands and Amazon,” Saul said.
The company's same-store sales are expected to decline 2.78% year over year, which is smaller than the 7.3% decline in the first quarter of 2023.
Sales will continue to decline, “low single-digit declines over the next five years,'' CFRA analyst Zachary Walling wrote in a note to clients.
It's unclear whether the company will provide an update on Arkhouse Management and its partner Brigade's $6.6 billion proposal to take the division's chain private. In mid-March, the companies said in SEC filings that they had entered into a nondisclosure agreement with Macy's that would allow the buyer to conduct financial due diligence.
Revenue summary
Here's what Wall Street expects from Macy's compared to its first-quarter 2023 results, according to Bloomberg data.
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Net sales: $4.81 billion compared to $4.98 billion a year ago.
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Adjusted EPS: $0.14 compared to $0.56 a year ago.
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Existing store sales: -2.78% (-7.20% 1 year ago)
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Gross profit margin: 39.63% compared to 40.00% a year ago
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Adjusted net income: $39.6 million compared to $157 million a year ago.
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Brooke DiPalma is a senior reporter at Yahoo Finance. Follow her on Twitter @brooke di palma Or email bdipalma@yahoofinance.com.
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