Macy’s has released its Q4 2019 and full year results, which reveal the brand continues to observe decreasing revenue. In order to combat this, Macy’s has also announced a three-year turnaround plan.
For 2019, Q4 net sales garnered $8.34 billion, compared to $8.45 billion in 2018. A similar decline was reported in revenue; full-year results for 2019 dropped from $24.97 billion in 2018 to $24.56 billion in 2019.
Net income also dropped from $740 million to $340 million, year-over-year.
While Macy’s did not perform as expected for fiscal 2019, the holiday season significantly improved Q4 results.
Macy’s has released its Polaris strategy, a three-year turnaround plan with five key components:
- Strengthen customer relationships: Build customer lifetime value, expand Star Rewards loyalty program with the launch of Loyalty 3.0 in early February and accelerate personalization and monetization.
- Curate quality fashion: Drive disciplined merchandise category roles, be the best destination for the best brands and balance sales and margin.
- Accelerate digital growth: Enhance the digital experience across the Macy’s website and app, grow omnichannel customer base and improve profitability.
- Optimize the store portfolio: Continue the growth treatment for stores in the best malls, expand off-mall profitably, and test and prove a retail ecosystem model with a mix of Macy’s store formats within a geographic market.
- Reset cost base: Right-size the organization and expense base, improve working capital and balance top-line and bottom-line growth.
“Taken as a whole, 2019 did not play out as we intended for Macy's, Inc.,” Jeff Gennette, chairman and CEO of Macy’s, Inc., said. “However, we executed well during the Holiday 2019 season. We were pleased with the significant trend improvement in the fourth quarter, including a meaningful sales uptick in the 10 shopping days before Christmas. Together with disciplined expense management, our solid sales results in the fourth quarter allowed us to deliver stronger-than-expected earnings results. Importantly, we exited the year with a clean inventory position.”
Gennette continued, “We have a clear perspective of where Macy’s, Inc. and our brands––Macy’s, Bloomingdale's, and Bluemercury––fit into American retail today. We know 2020 will be a transition year as we make significant structural changes to the business. I am confident that the Polaris strategy we shared earlier this month will allow us to stabilize margin in 2020 and position the company for healthy growth.”