Macy’s Stock Surges Over 5% in 2025 After Boosting Margins and Cutting Costs

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Highlights

• Macy’s stock jumped more than 5% after exceeding profit and sales expectations by improving margins and reducing costs.
• CEO Tony Spring confirmed the company is entering the critical holiday shopping period with a well-managed inventory.
• The retailer raised the lower end of its full-year earnings per share (EPS) and sales forecasts for 2024.

Macy’s (NYSE: M) shares climbed over 5% on Thursday following a strong Q3 2024 earnings report. The department store chain outperformed analyst estimates by boosting profit margins, cutting expenses, and trimming inventory levels.

For the third quarter of fiscal 2024, Macy’s reported earnings per share (EPS) of $0.21, surpassing expectations despite a 7% decline in sales year-over-year to $4.86 billion.

The company’s gross margin improved significantly by 160 basis points to 40.3%, with merchandise gross margin rising 110 basis points due to fewer permanent markdowns on Macy’s branded products and lower freight costs.

Macy’s successfully reduced selling, general, and administrative (SG&A) expenses by $48 million, bringing total SG&A to $2 billion, reflecting ongoing expense discipline.

Inventory was cut by 6%, positioning Macy’s well for the upcoming holiday season. CEO Tony Spring highlighted the company’s “healthy inventory position” as a key advantage.

Additionally, Macy’s updated its full-year guidance, raising the lower bound of its EPS forecast to a range of $2.88 to $3.13 and projecting sales between $22.9 billion and $23.2 billion. This marks an improvement from the prior outlook of EPS between $2.70 and $3.20 and sales of $22.8 billion to $23.2 billion.

Despite the recent stock gains, Macy’s shares have declined roughly one-third in value over the past year.

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