Macy’s CEO Tony Spring announced on the Q3 earnings call Thursday that the retailer plans to close around 65 stores by the end of January 2025. This marks an increase of 15 additional closures compared to previous plans. According to Adrian Mitchell, Macy’s chief financial officer, the closures will target underperforming locations.
Macy’s (NYSE: M) shares were down 0.3% in midday trading after a 1.3% drop earlier Thursday. During the call, Spring reported total net sales of $4.7 billion for the quarter, reflecting a 2.4% decrease compared to the same period last year, consistent with the company's November update.
These closures are part of Macy’s “Bold New Chapter” initiative, which aims to shut down 150 locations by 2026. Spring noted that this strategy will move the company closer to becoming a more profitable organization.
Despite the challenges, Macy’s reported a 3.2% increase in comparable sales, fueled by strong demand for women’s advanced contemporary apparel. Growth was also noted in the beauty and digital segments, as well as from new brands like Jenni Kayne and Kim Kardashian’s Skims.
The retailer is also focusing on expanding its luxury offerings. Both Bloomingdale’s and Bluemercury posted positive third-quarter comparable sales, driven by their diverse product range, competitive price points, and a mix of market and private label brands.
Macy’s had delayed releasing its full Q3 earnings and year-end outlook due to an internal investigation involving an employee who allegedly concealed approximately $150 million in expenses over several years. The individual, responsible for small-package delivery expense accounting, had made fraudulent entries to hide discrepancies.
Mitchell stated that the investigation found the entries had an immaterial impact on financial results over the period in question and confirmed there was no effect on revenues, cash, or inventory, as all vendors were paid in full. The fraudulent entries totaled $151 million from Q4 2021 to the fiscal quarter ending November 2, during which Macy’s incurred $4.36 billion in delivery expenses.
Macy’s is navigating a challenging retail landscape as shifting consumer behaviors, including increased online shopping and reduced spending due to economic concerns, continue to impact the industry.