Macy’s News Today: Stock Drops Amid Store Closures and Earnings Warning

Macy’s is facing renewed challenges as its stock drops following announcements of store closures and a downward revision to its earnings outlook. Investors are reacting to concerns about declining foot traffic, shifting consumer spending habits, and the company’s efforts to adapt to a changing retail environment.

With financial performance under pressure, Macy’s is streamlining operations while investing in digital growth.

Recent Stock Movement

Macy’s stock fell more than 10% in intraday trading after announcing store closures and lowering its earnings forecast. Trading volume surged, reflecting investor unease. Analysts attributed the decline to weaker consumer demand and broader retail struggles.

Several major financial institutions downgraded the stock, citing profitability concerns. Regulatory filings show large asset managers reducing their holdings.

Options activity has increased, with a rise in put contracts signaling expectations of further declines. Short interest in Macy’s has also grown, reflecting bearish sentiment. The company’s market capitalization has dropped below key thresholds, potentially affecting its inclusion in certain index funds and ETFs.

Updated Earnings Guidance

Macy’s lowered its full-year adjusted earnings per share (EPS) forecast to $2.45 to $2.65, down from $2.85 to $3.15. Revenue expectations were also trimmed, with management citing weaker discretionary spending and higher markdowns to clear excess inventory.

Margins are under pressure due to increased promotional activity aimed at staying competitive. Gross margins have been squeezed by higher input costs and a shift toward lower-margin product categories. Rising freight and logistics expenses have further weighed on profitability.

Credit card revenue, a key contributor to Macy’s bottom line, has also fallen short. Rising delinquency rates and lower revolving balances have reduced income from the company’s private-label credit card program, reflecting broader industry trends as elevated interest rates and growing household debt impact consumer credit health.

Store Restructuring Plans

Macy’s plans to close 150 locations by 2026, with 50 closures set for 2024. These underperforming stores, primarily in lower-traffic malls, are being phased out as the company shifts focus to more profitable formats.

At the same time, Macy’s is expanding its off-mall and smaller-format stores, such as Market by Macy’s and Bloomie’s, which have shown stronger sales per square foot. The company is also upgrading flagship locations and enhancing in-person services to create a more engaging shopping experience.

Technology-driven improvements, including AI-powered inventory management and mobile checkout, are being tested to streamline operations and improve efficiency. These initiatives align with broader retail trends, where digital tools are used to optimize physical store performance.

Liquidity and Debt Position

Macy’s reported $1.2 billion in cash and cash equivalents in its latest filings, down from prior quarters as it allocates capital toward restructuring and technology investments. The company has access to a $3 billion revolving credit facility, but borrowing against this line has increased, indicating greater reliance on external funding.

Macy’s carries approximately $3.5 billion in long-term debt, with a significant portion maturing within the next five years. Refinancing has become more expensive due to higher interest rates, with recent bond issuances carrying yields above 7%. The company’s debt-to-equity ratio has risen, raising concerns about financial flexibility. Credit rating agencies, including Moody’s and S&P Global, have maintained a cautious outlook, citing declining free cash flow and potential covenant risks tied to its credit facility.

E-commerce Growth Metrics

Macy’s has been investing in its e-commerce platform, focusing on website improvements, expanded fulfillment capabilities, and data-driven personalization. Online sales have grown modestly but have not offset declines in physical store revenue.

A key initiative has been the expansion of Macy’s third-party marketplace, which allows external brands to sell directly through its website. This broadens product selection without requiring large inventory commitments, helping margins while increasing customer engagement.

The company has also enhanced its omnichannel capabilities, offering same-day delivery, curbside pickup, and AI-driven product recommendations. However, competition from e-commerce giants and digital-first retailers remains a challenge.