Macy’s shrinks its revenue by 2.7% in the first quarter and shrinks its gross margin

Macy’s shrinks its revenue by 2.7% in the first quarter and shrinks its gross margin
Macy’s shrinks its revenue by 2.7% in the first quarter and shrinks its gross margin

Macy’s shrinks its structure while cutting its distribution network. The American department store chain, which is in the process of closing 150 stores by 2026, has reduced its turnover in the first quarter (ended on May 4), shrinking its business.

Specificthe group has reached revenues of 4,846 million dollars, which represents a drop of 2.7% compared to the same period of the previous year. The group’s operating margin has shrunk by 4.7%, to $1.9 billion. For its part, net income during the quarter has risen to $62 million, compared to $155 million in the previous year’s quarter.

The goal of the American company is close the year with a turnover between 6% and 7% lower than in 2022which would mean a turnover of between $22.9 billion and $23.2 billion.

Macy’s plans to close fifty stores during the current fiscal year

The department store chain closed the 2023 financial year with a turnover of $23,092 million, which represented a 12% drop compared to 2022, when it had a turnover of $24,442 million.

In the next three years, The chain plans to close 150 stores in the United States and only fifty this year. On the other hand, the company plans to add fifteen new locations of its Bloomingdale’s department store brand and another thirty with the Bluemercury chain. The goal is for these locations to be operational by 2026, an effort by the company to accelerate the growth of its high-end brands.

In January, The chain announced the adjustment of its structure with the dismissal of about 2,350 employeeswhich represent about 3.5% of its workforce, and the closure of five stores, while it continues to reduce its business.

The cuts in its retail network are part of the recovery plan Polaris, which launched in 2020, just before the outbreak of the pandemic. The three-year strategy aims to boost the group’s profitability and accelerate its growth and involves reducing its store network and transforming its retail with a digital approach.

 
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