Macy’s stock Down 13.7% on Q2 Earnings ReportsMacy’s (NYSE: NYSE:M ) has been a staple of American retail for over a century, but in Q2 CY2024, the iconic department store faced a challenging environment that reflected the shifting dynamics of consumer behavior and broader economic trends. Despite delivering a robust earnings performance, Macy’s sales struggled, leading to a revised outlook that has left investors cautious.
Key Earnings Highlights
In the second quarter of 2024, Macy’s reported a non-GAAP earnings per share (EPS) of $0.53, a significant 80% beat over the $0.29 expected by analysts. This marked a notable improvement from the $0.26 EPS in the same quarter last year. The company also generated $5.10 billion in revenue, slightly surpassing expectations of $5.05 billion, despite being 3.5% lower than the previous year.
One of the most encouraging signs from the report was the improvement in gross margins, which rose to 42.3% from 39.8% in the same period last year. This growth was driven by cost-cutting measures, including reduced promotional activity and better inventory management, resulting in a higher EBITDA margin of 8.6%, up from 6.5% in Q2 2023.
A Revised Outlook: Caution Amidst Uncertainty
Despite these positive earnings figures, Macy’s revised its full-year revenue guidance downward, projecting net sales between $22.1 billion and $22.4 billion. This is a decrease from the previous forecast of $22.3 billion to $22.9 billion, indicating a challenging environment ahead. The company also lowered its full-year EPS guidance to $2.72 at the midpoint, missing analyst estimates by 2%.
Macy’s (NYSE: NYSE:M ) CEO, Tony Spring, highlighted the difficulties the company is facing, citing selective consumer spending and an increase in promotional activities as key factors contributing to the lowered forecast. “As the quarter progressed, our customer became more discriminating, which we attribute to ongoing macroeconomic uncertainty and an increasingly complex news cycle,” Spring noted.
Consumer Behavior Shifts and Store Closures
The retail landscape is evolving, with consumers becoming more discerning about where they spend their money. Macy’s has been attempting to adapt to these changes by closing underperforming stores and focusing on more profitable locations. The company announced earlier this year that it plans to shutter about 150 of its namesake stores by 2027, while investing in the remaining 350 locations.
Technical Outlook
Macy stock, (NYSE: NYSE:M ), is presently experiencing a notable decline of 13.3%. This decline has resulted in the stock trading below several key moving averages, including the 50-day, 100-day, and 200-day moving averages. The daily price chart reveals a bearish symmetrical triangle pattern, indicating potential further downward movement. Additionally, the stock is currently oversold, which is reflected in a relatively weak Relative Strength Index (RSI) reading of 39.78. This low RSI suggests that the selling pressure may be dominating the market sentiment for Macy stock (NYSE: NYSE:M ) at this time.
Interestingly, while Macy’s flagship brand saw a decline in comparable sales by 3.6%, its beauty brand Bluemercury continued to perform well, with comparable sales rising 2%—marking its 14th consecutive quarter of growth. This highlights the divergent performance within Macy’s portfolio, with some segments thriving
Macy
Macy’s Revamps Board with New Directors Amid Acquisition TalksIn a surprising move, Macy’s ( VIE:MACY ) has announced the appointment of two new independent directors, Richard Clark and Richard Markee, while simultaneously continuing discussions with Arkhouse and Brigade regarding a potential acquisition deal. The reshuffle also sees Tony Spring, Macy’s CEO, taking on the additional role of chairman.
Richard Clark, a seasoned veteran with four decades of experience in real estate, mergers and acquisitions, and capital markets, brings a wealth of expertise to the board. His tenure at Brookfield Corp. and its predecessors, coupled with his role as Chairman of the Alliance for Downtown New York, positions him as a strategic asset in Macy’s strategic decision-making.
On the other hand, Richard Markee, with extensive retail experience including CEO roles and directorships at various companies like Vitamin Shoppe and Toys “R” Us, adds a deep understanding of the retail industry to the board. His presence could be instrumental in guiding Macy’s through the rapidly evolving retail landscape.
The timing of these appointments is particularly noteworthy, considering Macy’s ( VIE:MACY ) ongoing discussions with Arkhouse and Brigade regarding a potential acquisition. While Arkhouse and Brigade have withdrawn their director nominations, Macy’s remains open-minded about the best path to create shareholder value.
The addition of new directors, coupled with the continuation of acquisition talks, suggests that Macy’s is undergoing a strategic shift aimed at revitalizing its business and enhancing shareholder value. Tony Spring’s acknowledgment of the departing board members, Jeff Gennette and Frank Blake, further underscores the significance of this transition.
As Macy’s ( VIE:MACY ) navigates through these changes, shareholders eagerly await further updates on the outcome of the acquisition talks and the company’s strategic direction under the leadership of its revamped board. Will these developments mark a turning point for Macy’s, propelling it toward a new era of growth and innovation? Only time will tell.
Technical Outlook
Macy ( VIE:MACY ) stock is trading higher above the 200-day Moving Average (MA) with a moderate Relative Strength Index (RSI) of 53. VIE:MACY 's 4-month price chart indicates the start of a Symmetrical triangle pattern attesting to the bullish nature of the stock.
Arkhouse Pursues Macy's Amidst Talks for Higher BidIn a bid to secure a higher offer from Macy's ( NYSE:M ), investor Arkhouse Management has disclosed ongoing talks with the department store giant for access to due diligence materials. The move comes in response to Macy's characterization of the latest offer as "less than compelling," signaling a potential escalation in the battle for control over the iconic retailer.
Arkhouse, along with Brigade Capital, raised their offer to $24 per share on March 3, valuing Macy's at $6.6 billion. However, Macy's board expressed reluctance to transact at this price level, prompting Arkhouse to push for further negotiations and access to crucial diligence materials.
According to a regulatory filing, Arkhouse and Brigade have submitted a due diligence request list to Macy's, including customary items necessary to confirm or potentially increase the offer. Negotiations regarding the confidentiality agreement are ongoing, with Arkhouse Management and Brigade awaiting access to the requested materials.
With a 4.4% stake in Macy's ( NYSE:M ), Arkhouse Management remains determined to pursue its objectives. The investment firm has nominated nine director candidates, including executives with expertise in retail, real estate, and capital markets, in a move to reshape Macy's board.
The proxy battle initiated by Arkhouse underscores the intensifying competition within the retail sector. As traditional retailers grapple with evolving consumer preferences and the rise of e-commerce, strategic investments and boardroom maneuvers become crucial avenues for asserting influence and driving growth.
For Macy's, navigating this challenging landscape requires a delicate balance between preserving shareholder value and addressing the demands of activist investors. The outcome of the ongoing negotiations with Arkhouse Management and Brigade Capital could significantly impact the future direction of the iconic department store chain.
Why Macy's Challenges Could Be a Hidden Opportunity Macy's have recently made headlines with significant job cuts, signaling a strategic shift amidst a rapidly changing market. While job cuts often raise concerns, savvy investors may recognize these moves as part of a broader transformation strategy. This article delves into the recent developments at Macy's, shedding light on the potential opportunities that lie beneath the surface for discerning buyers.
Macy's Adapting to the Changing Consumer Landscape
VIE:MACY 's, an iconic department store, is set to lay off approximately 2,350 employees and close five locations as part of a broader strategy to meet the evolving needs of consumers and the marketplace. This comes as no surprise, considering Macy's previous significant job cuts during the early days of the pandemic.
Investment Insight: Macy's commitment to deploying a new strategy demonstrates a proactive approach to stay relevant in the retail sector. While the short-term impact is reflected in a 3% stock dip, forward-thinking investors may see this as an opportunity to acquire shares at a potential discount before the market fully recognizes the benefits of Macy's strategic shift.
The Broader Retail Landscape
The retail industry has witnessed a wave of layoffs across various sectors, including tech, media, and hospitality. Companies like Google, Amazon, and LinkedIn have also announced job cuts in recent months, reflecting the ongoing challenges and transformations in the business landscape.
Conclusion:
While the immediate reaction to job cuts and store closures may instigate concerns, astute investors recognize that Macy's are not merely retrenching but strategically positioning themselves for sustained success. By understanding the underlying motives behind these decisions, investors can discern the potential for future growth and capitalize on the current market dynamics. In the ever-changing retail landscape, those with a keen eye for strategic opportunities may find this moment as a promising entry point into the stocks of companies poised for a resilient and prosperous future.
Macy's $5.8 Billion Buyout Offer Ignited the Stock to SurgeMacy's has received a $5.8 billion buyout offer from real estate investor Arkhouse Management and asset manager Brigade Capital Management.
The two firms already have a large position in Macy's through Arkhouse-managed funds, according to the WSJ. Macy's board met to discuss the proposal but it is unclear how the vaunted department store brand views the offer, the close sources say. Meanwhile, the investment group believes M stock is currently undervalued in public markets and indicated it may be willing to raise its offer following necessary due diligence.
NYSE:M has been on an upward trend since November, gaining over 48.51% in the last 50 days.
Macy's shares rallied 19.5% Monday and premarket trading today following the reports of the Buyout.
Investors are still evaluating NYSE:M price, but the stock still has some upward momentum. This is a positive sign for the stock's future value.
Looking for a bearish scalp on Macey's.
As you can see here, we are approaching a major imbalance on the hourly chart. I will be looking on the 15 minute chart for a heavy bounce off with good volume and hold it until close for a day trade. As always, thank you for viewing my analysis. #macys #puts #scalp
M Macy's Options Ahead of EarningsAnalyzing the options chain and the chart patterns of M Macy's prior to the earnings report this week,
I would consider purchasing the 16usd strike price Calls with
an expiration date of 2023-9-15,
for a premium of approximately $0.72.
If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
Looking forward to read your opinion about it.
$M Long Swing Opportunity with Big Price TargetsNYSE:M is in a downtrend channel but I think there is a long opportunity as long as it holds the 15.9 level with targets of 19 and 22.65
-Falling Wedge breakout and retest wedge-line as support
-Bottom of channel bounce with strong green candles
-Buying volume vastly outweighs selling volume from trend
-RSI showing momentum with plenty of room to run
Good idea to wait for a confirmation hold above 16 old support for entry
MACY outlookTrend:
Below 50,100 and 200 EMA
ADX, DI below 20
Trend seems to be weak
Macro impact:
Consumer cyclical stock are not a good buy
Inflation impact on consumer purchase
High interest impacting credit buying
Recommendation:
Wait for price to cross above the resistance @ 24.95 for re-assessment
MacyYou can buy Macy stocks aiming a mid-term profit!
I prefer to wait until a confirmation.
Beyond the technical: (do your analysis, I’m not educated in the case of fundamental analysis academically)
Fair Price to Intrinsic Value: 0.91 which is a good score!
To summarize my fundamental opinion on this stock:
just good ( a little bullish )
Triple bottom on Macy dating back to 1992 =o !!!! $MWhat is Macys?
Macy's, Inc., an omnichannel retail organization, operates stores, Websites, and mobile applications. The company sells a range of merchandise, including apparel and accessories for men, women, and children; cosmetics; home furnishings; and other consumer goods. As of April 1, 2019, it operated approximately 680 department stores under the Macy's and Bloomingdale's names; and 190 specialty stores
The bull case?
-The company has good profit margins for a retail.
-The company has good debt to capital because they sold a lot of real-estate a few years ago.
- Could get a dead cat bounce (lol)
- I've noticed that Yacktman Hedge fund started acquiring over 20% of macy shares.( this is one of those long term investment companies, kinda like Berkshire and warren buffet style, they look for value)
-Lastly they got a good online store and ladies love to shop! shopaholics gonna be shopaholics. (I mean that's why i invest in the market, so i can make extra money for my lady to buy stuff lol)
The bear case?
-retail sector has been going down hill
-Corona shutdown gonna affect their revenue this year by 25% easily so we'll be looking at breakeven for them this year.
we can bear case all day for sure but that's some of the main ones, so know your risk!
So what's my play?
picking some up around the $5 range, gonna add a trailing stop-loss at $1 below ( trailing stop means at $4 stoploss, if you don't know, just msg me)
$M (MACY'S INC) expected to go higher to $11 in wave-5$M has been following elliott wave nicely. Wave-3 was almost 1.62 of wave-1 which is very typical of a stock. With that, as the wave-4 is forming, I am presenting an idea that can lead to ~20% gains during next few days:
Entry: $8.4-8.00
TP1: $10.8-11.2
What do you think about this idea? Leave your comments below.
Have a great weekend!
Disclaimer: This is not a financial advise. Please make your independent decisions while making an investment.
SHORT: $MWave Count:
- Wave C
Reason(s) to short:
- Bearish divergence at 1 hour time frame
- Reached the channel top
- Reached the 1 trend-based Fibonacci extension
Note:
- This might be a short term pullback until 0.382-0.236 trend-based Fibonacci extension. If it bounces around this area, prepare for Wave 3.