Macy’s Net Income Plummets 47% Amid Flat Revenues in Q4 2024

Macy’s Inc. (M) posted a sharp deterioration in profitability during the fourth quarter of 2024, with net income falling to $142 million, down from $268 million in the same period the prior year. Despite maintaining revenue at $3.9 billion—unchanged from the year-ago quarter—the company’s gross margin contracted by 210 basis points, reflecting persistent pressure from promotional markdowns and rising supply chain costs. The results underscore challenges in sustaining consumer demand despite a continued focus on inventory optimization and store closures. The decline in earnings came amid a broader industry trend of elevated operating expenses, particularly in digital infrastructure and logistics, which rose 12% year-over-year. Macy’s also reported a 6% drop in comparable store sales, excluding e-commerce, highlighting weak foot traffic in brick-and-mortar locations. The company attributed the shortfall to cautious consumer spending and a shift in discretionary spending toward travel and experiences rather than retail goods. The stock responded negatively to the report, dropping 8.3% in after-hours trading. Analysts noted that the flat revenue performance and shrinking profit margins indicate that Macy’s ongoing transformation strategy—centered on repositioning its brand and reducing reliance on discounting—is not yet yielding significant financial improvements. Investors are now closely watching the company’s guidance for the first quarter of 2025 and its plans for further store closures and digital investment. The results mark the third consecutive quarter of declining net income and highlight the difficulty Macy’s faces in balancing cost discipline with growth. With its full-year 2025 outlook remaining cautious, the company’s ability to stabilize earnings and regain top-line momentum will be critical to restoring investor confidence.