Two weeks after 32 million viewers tuned into its 98th annual Thanksgiving Day Parade, Macy’s, Inc. reported a 2.4% decline in net sales to $4.7 billion for the third quarter of 2024. The overall decline came despite a 3.2% increase in net sales from luxury beauty store Bluemercury, which Macy’s acquired in 2015.
During the earnings call on Wednesday, Macy’s unveiled a plan to streamline operations. With continued growth at both Bluemercury and Bloomingdales, the latter of which saw a 1.4% increase in net sales for the third quarter, Macy’s will close roughly 150 underperforming stores between 2024 and 2026 and put its focus on luxury going forward. Bluemercury will open nine stores during the fourth quarter, in addition to the nine new stores already added this year.
“The second pillar of our bold new chapter strategy is accelerating luxury growth,” said Macy’s chairman and CEO Tony Spring. “Both Bloomingdale’s and Bluemercury posted positive third quarter comps. Customers continue to respond well to their breadth of product price points, market and private brands, and we remain confident in our ability to grow sales at each of these nameplates.”
During the earnings call, Macy’s addressed the recent news that an employee hid $151 million in expenses over the course of three years. Macy’s delayed the release of its Q3 earnings report by two weeks after the news broke. Spring said the employee acted alone and is no longer with the company.
“We’ve determined that the individual responsible for the issue intentionally made erroneous accounting accrual entries beginning in the fourth quarter of 2021 and in subsequent periods, acted alone and did not pursue these acts for personal gain,” Spring said during the earnings call. “As noted in our press release this morning, we’ve concluded that these erroneous entries had an immaterial impact on our cumulative financial results and no impact on our cash position, as all vendors were fully paid.”
At Macy’s nameplate stores, net sales fell 3.1%. However, Spring emphasized that fragrances remain a strong performer at the department store giant. French luxury conglomerate LVMH reported similar growth in perfume and cosmetics for the third quarter of 2024, even while apparel sales floundered.
“Beyond women’s apparel, fragrances continue to be a standout, while men’s nonactive apparel, handbags and home sales, although still weak, sequentially improved in the third quarter,” said Spring.
