Shares of Macy’s (M) declined in pre-market trading after the company reported mixed Q3 results and lowered its FY24 outlook. The retailing giant’s adjusted earnings plunged by 80.9% year-over-year to $0.04 per share but were above consensus estimates of $0.03 per share.
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Furthermore, the company’s revenues declined by 2.4% year-over-year to $4.7 billion in the third quarter. This fell short of Street estimates of $4.74 billion. Additionally, the company’s comparable sales were down by 2.4% in the third quarter at its company-owned stores.
Macy’s Confirms No Impact due to the Accounting Issue
Macy’s had delayed its Q3 earnings release due to an accounting issue. This issue arose after an investigation revealed that a single employee had intentionally made inaccurate accrual entries while managing small package delivery expense accounting. The retailer confirmed in its Q3 press release that there was “no material impact or restatements to previously filed financial statements following completion of delivery expense related investigation.”
Macy’s Lowers FY24 Outlook
Looking ahead, the company expects adjusted earnings in the range of $2.25 to $2.50 per share in FY24, compared to its prior outlook of $2.55 to $2.90 per share. Furthermore, the retailer has projected that its net sales will be between $22.3 billion and $22.5 billion, compared to its previous guidance of $22.1 billion to $22.4 billion. For reference, analysts were expecting the company to report earnings of $2.73 per share on revenues of $22.13 billion.
Is Macy’s Stock a Buy or Sell?
Analysts remain sidelined about Macy’s stock, with a Hold consensus rating based on one Buy and seven Holds. Over the past year, Macy’s has declined by more than 10%, and the average M price target of $17.33 implies an upside potential of around 3.7% from current levels. These analyst ratings are likely to change following Macy’s results today.
