NEW YORK - Macy's, Inc. (NYSE: NYSE:M) has unveiled a new strategy aimed at driving growth and enhancing shareholder value. The plan, named "A Bold New Chapter," involves closing approximately 150 underperforming stores by 2026, expanding its luxury brand footprint, and modernizing operations.
The retailer intends to concentrate its efforts on revitalizing the Macy's brand by focusing on customer experience, updating store environments, and investing in around 350 key locations. Additionally, Macy's plans to close about 50 stores by the end of the fiscal year as part of its resource allocation strategy.
In the luxury segment, Macy's, Inc. seeks to capitalize on the strong performance of its Bloomingdale's and Bluemercury brands. The expansion strategy includes opening approximately 15 new Bloomingdale's and at least 30 Bluemercury stores, along with remodeling about 30 existing Bluemercury locations.
The company is also set to streamline its end-to-end operations to improve efficiency. This includes rationalizing the supply chain, enhancing inventory planning, and implementing scalable technology platforms. Macy's, Inc. anticipates these changes will align operations with future demand and offer better service to customers.
From a financial perspective, Macy's, Inc. projects low-single-digit annual sales growth and mid-single-digit annual Adjusted EBITDA dollar growth beginning in 2025. The company also expects annual SG&A dollar growth to remain below the historical inflation rate of 2%-3% and capital spending to be lower than in 2024, with free cash flow returning to pre-pandemic levels.
This strategic announcement is based on a press release statement from Macy's, Inc.
InvestingPro Insights
As Macy's, Inc. (NYSE: M) embarks on its "A Bold New Chapter" strategy, current financial metrics and market performance data from InvestingPro provide additional context for investors. With a market capitalization of $5.29 billion and a P/E ratio standing at 7.74, Macy's appears to be trading at a low earnings multiple, which could suggest that the stock is undervalued relative to its earnings. This aligns with one of the InvestingPro Tips, highlighting that the company's stock price movements have been quite volatile, indicating potential opportunities for investors comfortable with risk.
Another key metric to consider is the company's revenue growth, which has seen a decline of 7.23% over the last twelve months as of Q3 2024, and a quarterly revenue decline of 7.85% in Q3 2024. This supports the InvestingPro Tip that analysts anticipate a sales decline in the current year. Despite this, Macy's has maintained dividend payments for 22 consecutive years, with a current dividend yield of 3.43% and a dividend growth of 5.02% over the last twelve months as of Q3 2024, which could be attractive to income-focused investors.
For those interested in the broader picture, Macy's is recognized as a prominent player in the Broadline Retail industry, according to another InvestingPro Tip. With a significant transformation plan underway, investors will be closely monitoring how these strategic changes will impact the company's financial health and market position. To explore additional insights and get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, use the coupon code PRONEWS24. There are even more tips available on InvestingPro, tailored to help investors make informed decisions.
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