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The retailer spent much of Q1 embroiled in a proxy battle with investment firm Arkhouse Management, which now has two seats on the board.

Macy’s Inc. reported a decline in net sales in its first quarter of fiscal 2024 ended May 4. 

In Q1, Macy’s net sales declined 2.7% to $4.8 billion from Q1 in 2023. Meanwhile, comparable sales — including online sales — declined 1.2%. Those sales declines came after the retailer announced plans to close 150 stores and invest in a new strategy to turn negative trends around.

“We are encouraged by our customers’ response to our Bold New Chapter strategy resulting in sales near the high end of our outlook,” CEO Tony Spring said in a written statement. “Our teams executed with discipline and efficiency, which contributed to first quarter earnings that exceeded our expectations. Although early days, our investments in product, presentation and experience are gaining traction and reinforce our belief that longer-term, Macy’s, Inc. can return to sustainable, profitable growth,” he added.

Macy’s is No. 14 in the Top 1000, where Digital Commerce 360 categorizes it as an Apparel/Accessories retailer. The Digital Commerce 360 database ranks North America’s largest online retailers by their annual web sales.

Macy’s Q1 online sales results

Macy’s did not share specific online sales data. However, ecommerce was “a gateway to the Macy’s brand and is a source of commerce and omni engagement,” Spring told investors on May 21. 

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Spring became Macy’s new CEO on Feb. 4, and digital sales has been one priority for him. Since he stepped into the new role, Macy’s has grown its digital team to work on reducing points of friction in the online shopping customer journey, Spring said. For example, in Q1, Macy’s added a new online baby registry with more than 150 brands. 

Macy’s is also working on growing omnichannel capability across its brands, Spring said without sharing details.

Macy’s Q1 results by brand

The retailer includes three brands: Macy’s, Bloomingdale’s and Bluemercury.

At the Macy’s nameplate brand, comparable sales declined 0.4% in Q1. The first 50 stores, where Macy’s is experimenting with new ideas based on customer feedback, recorded a 3.4% increase in comparable sales.

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“Results are encouraging as they are an early indicator for the go-forward Macy’s fleet and ultimately, the entire Macy’s, Inc. go-forward businesses’ ability to return to growth,” Spring said. “The first 50 represent what we can do when we deliver on our customers’ expectations.”

Bloomingdale’s and Bluemercury were both “bright spots” in the Macy’s portfolio, Spring said. Bloomingdale’s comparable sales increased 0.8% in the quarter. Loyalty members in the top two income brackets also increased their spending in the quarter, Macy’s said.

“While our customer is not immune to macro pressures and has become more judicious with their spend, the power of Bloomingdale’s position in the upscale market is its diversification across categories and price points,” Spring said. “It has the flexibility and the tools to quickly adjust to the market, allowing it to gain wallet share even as there are shifts in popular categories and brands.”

Bluemercury, meanwhile, recorded its 13th consecutive quarter of comparable sales growth. They increased 4.3% in Q1. Macy’s plans to open 30 new Bluemercury locations and remodel another 30.

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The struggle for power at Macy’s

Macy’s was embroiled in a proxy battle through April 2024 with activist investor firm Arkhouse Management. 

In January, Macy’s rejected a takeover offer from Arkhouse that would have taken the retailer private for $5.8 billion, or $21 a share. At the same time, Arkhouse also nominated nine members to Macy’s board. Then, the investment firm increased its bid to $24 per share, or $6.6 billion, on March 3. 

In April, Macy’s agreed to add Ric Clark and Rick Markee to its board, both nominated by Arkhouse. In response, Arkhouse withdrew its other seven nominees. However, that hasn’t put an end to Arkhouse’s pursuit of a Macy’s buyout. 

“Ric Clark and Rick Markee bring tremendous dealmaking experience to Macy’s Board and will be instrumental in maximizing value for shareholders,” Arkhouse said in a statement at the time. “As a result of our efforts, our buyer group has begun receiving due diligence to progress discussions toward a potential transaction to acquire the Company.”

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Macy’s earnings

For its fiscal first quarter ended May 4, 2024, Macy’s reported:

  • Net sales declined  2.7% to $4.8 billion.
  • Comparable sales decreased 1.2%.
  • Macy’s nameplate brand comparable sales declined 0.4%.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports

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