**Macy’s Q4 Earnings Beat Estimates on Promotions, Cost Cuts**
Macy’s Inc. reported better-than-expected quarterly earnings and sales on Tuesday, as steep discounts and cost cuts helped the department store chain attract cost-conscious shoppers.
For the fourth quarter ended January 28, the company’s net income fell 58.4% to $268 million, or $1.02 per share, from $643 million, or $2.33 per share, a year earlier.
Excluding one-time items, Macy’s earned $2.43 per share, topping analysts’ average estimate of $2.39, according to Refinitiv data.
Net sales declined 4.6% to $8.26 billion, but still beat analysts’ expectations of $8.19 billion.
The company said comparable sales, excluding licensed departments, fell 2.1% in the quarter, an improvement from the 3.8% decline in the previous quarter.
**Significant Markdown Activity**
To clear out excess inventory and attract shoppers, Macy’s engaged in significant markdown activity during the quarter. The company noted that its clearance sales were well-received by customers, particularly in the apparel and home categories.
In addition to promotions, Macy’s also implemented cost-cutting measures to improve its profitability. The company reduced its workforce by approximately 2,000 positions and closed several underperforming stores.
Total expenses decreased by 3.3% to $8.35 billion in the quarter, driven by lower payroll and occupancy costs.
**Outlook for 2023**
Looking ahead, Macy’s provided a cautious outlook for 2023, reflecting continued economic uncertainty and a challenging retail environment.
The company expects comparable sales to decline in the low single digits for the year, with gross margin pressure persisting due to promotional activity and higher costs.
Despite the challenges, Macy’s remains focused on executing its long-term growth strategy, which includes investing in its digital capabilities, expanding its loyalty program, and enhancing the customer experience in its stores.
**Analyst Commentary**
Neil Saunders, Managing Director of GlobalData Retail, said in a note to clients that Macy’s results were .
