• by Sarah Mahoney  @mahoney_sarah, May 21, 2024

With the drama of a potential takeover quiet for now, Macy’s new leadership is ready to show off strategic changes. While first-quarter sales fell to $4.85 billion, a 2.7% decline from $4.98 billion in the same period of last year, sales in the company’s so-called “First 50” gained 3.3%. These are the 50 stores Tony Spring, chief executive officer, considers Macy’s highest potential units, and they are the focus of new merchandising, marketing and promotional tactics.

Ad sales at Macy’s Media Network revenue climbed $8 million, reaching $37 million for the quarter.

Net income dipped to $62 million from $155 million in the year-ago period.

In a call webcast for investors, Spring highlighted shifts in marketing, including piloting events that bring “retail’s theater to life,” such as fashion shows, personal styling, and fragrance bottle engraving.

“We are excited for our newest marketing campaign, the greatest hits of summer,” he says, “which represents the beginning of a modern interpretation of the Macy's brand and is the first under our new head of marketing.”

Sharon Otterman joined Macy’s in November as chief marketing officer of Macy’s, from CMO at Caesars Entertainment, launching Caesars Sportsbook, the sports betting brand.

Luxury sales performed better, with Bloomingdale’s comparable sales adding 0.8%, and revenues at Bluemercury, the spa and beauty chain, climbed 4.3%.

“Despite a tough demand environment for apparel and accessories,” writes David Swartz, an analyst who follows the department store for Morningstar, “Macy’s posted slightly better-than-expected results in Tony Spring’s first quarter as CEO.”

Still, while the positive performance of the First 50 offers some confidence in Spring’s strategy, “we think it is much too early to draw any conclusions,” he says.

The company didn’t offer any updates on the buyout offer from Arkhouse Management, which Swartz says is believed to be conducting due diligence. And while he adds that Arkhouse’s go-private offer should be “seriously considered,” he still sees value in Macy’s as a public company, despite years of declining sales.

“Although the department store model no longer works as it once did due to intense competition, we believe the firm will generate consistent cash flow.”

And Macy’s is cautious about what lies ahead, citing ongoing pressures on consumers. For the year ahead, Macy’s now forecasts a company sales decline to fall between a 1% decrease or 1.5%increase. It is more optimistic about its “go forward” fleet, the Macy’s stores it intends to keep open, the First 50, and Bloomingdale’s and Bluemercury. It expects sales at those units to come in between flat and up 2.5%.