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Macy's (M) to Trim Headcount as Part of Turnaround Effort
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Macy's, Inc. (M - Free Report) , an omnichannel retail organization, is reportedly undergoing a significant operational restructuring. The retail giant is said to be lowering its headcount, as part of its turnaround efforts to rein in costs and address dwindling sales. Roughly, 2,300 positions across the board would be affected by this move.
The company has steadily reduced its workforce from 175,700 in 2013 to 94,570 in 2023, marking a 46% decline over a decade, per macrotrends.net. This substantial decrease in manpower reflects strategic shifts within the company, including store closures, increased adoption of automation and an intensified focus on e-commerce operations, which inherently require fewer employees compared with traditional brick-and-mortar retail setups.
The drive behind M’s strategy to reduce its workforce may be linked to the influence of an investor consortium led by Arkhouse Management and Brigade Capital. Advocating for the privatization of Macy's, this group put forward a substantial $5.8 billion buyout offer last December, exemplifying a trend in investor activism geared toward more streamlined and efficient retail operations.
In line with this strategic direction, Tony Spring, who is about to take over as Macy's CEO, appears to favor a strategy centered on cost reduction and profit margin growth. A key element of Spring's plan is to cut back on promotional expenses, a decision likely shaped by the company's struggle with excess inventory in 2022.
In addition, M is reevaluating its brick-and-mortar footprint, with plans to shutter five full-line stores, per media reports. This strategic decision aligns with evolving consumer shopping patterns and underscores the need for a retail presence that is both more strategically positioned and responsive to current market demands.
This operational shift at Macy's is a significant development, one that is expected to be closely monitored by investors and market analysts for its potential impact on the company's financial performance and competitive position in the evolving retail landscape. As part of this broader strategy, management is revamping private-label brands, exploring smaller format stores, and leveraging its subsidiaries like Bluemercury and Bloomingdale's to drive growth.
Image Source: Zacks Investment Research
Shares of this Zacks Rank #3 (Hold) company have increased by 9.8% in the past six-month period compared with the industry’s growth of 10.8%. The Zacks Consensus Estimate for sales and EPS for the current fiscal year indicates a decline of 5.1% and 32.8%, respectively.
The Zacks Consensus Estimate for Ross Stores’ current fiscal-year sales and EPS suggests growth of 7.5% and 22.3%, respectively, from the year-ago numbers.
Target (TGT - Free Report) , a general merchandise retailer in the United States, carries a Zacks Rank #2. TGT delivered an average earnings surprise of 30.8% in the trailing four quarters.
The Zacks Consensus Estimate for Target’s current financial-year EPS suggests growth of 38.5% from the year-ago actuals.
Amazon.com (AMZN - Free Report) , an e-commerce gaint, carries a Zacks Rank #2. AMZN delivered an average earnings surprise of 54.87% in the trailing four quarters.
The Zacks Consensus Estimate for Amazon’s current financial-year sales and EPS suggests growth of 11.1% and 278.9%, respectively, from the year-ago reported figures.
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Macy's (M) to Trim Headcount as Part of Turnaround Effort
Macy's, Inc. (M - Free Report) , an omnichannel retail organization, is reportedly undergoing a significant operational restructuring. The retail giant is said to be lowering its headcount, as part of its turnaround efforts to rein in costs and address dwindling sales. Roughly, 2,300 positions across the board would be affected by this move.
The company has steadily reduced its workforce from 175,700 in 2013 to 94,570 in 2023, marking a 46% decline over a decade, per macrotrends.net. This substantial decrease in manpower reflects strategic shifts within the company, including store closures, increased adoption of automation and an intensified focus on e-commerce operations, which inherently require fewer employees compared with traditional brick-and-mortar retail setups.
The drive behind M’s strategy to reduce its workforce may be linked to the influence of an investor consortium led by Arkhouse Management and Brigade Capital. Advocating for the privatization of Macy's, this group put forward a substantial $5.8 billion buyout offer last December, exemplifying a trend in investor activism geared toward more streamlined and efficient retail operations.
In line with this strategic direction, Tony Spring, who is about to take over as Macy's CEO, appears to favor a strategy centered on cost reduction and profit margin growth. A key element of Spring's plan is to cut back on promotional expenses, a decision likely shaped by the company's struggle with excess inventory in 2022.
In addition, M is reevaluating its brick-and-mortar footprint, with plans to shutter five full-line stores, per media reports. This strategic decision aligns with evolving consumer shopping patterns and underscores the need for a retail presence that is both more strategically positioned and responsive to current market demands.
This operational shift at Macy's is a significant development, one that is expected to be closely monitored by investors and market analysts for its potential impact on the company's financial performance and competitive position in the evolving retail landscape. As part of this broader strategy, management is revamping private-label brands, exploring smaller format stores, and leveraging its subsidiaries like Bluemercury and Bloomingdale's to drive growth.
Image Source: Zacks Investment Research
Shares of this Zacks Rank #3 (Hold) company have increased by 9.8% in the past six-month period compared with the industry’s growth of 10.8%. The Zacks Consensus Estimate for sales and EPS for the current fiscal year indicates a decline of 5.1% and 32.8%, respectively.
Stocks to Consider
Ross Stores (ROST - Free Report) , an off-price retailer of apparel and home accessories, currently carries a Zacks Rank #2 (Buy). ROST delivered an average earnings surprise of 7.79% in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Ross Stores’ current fiscal-year sales and EPS suggests growth of 7.5% and 22.3%, respectively, from the year-ago numbers.
Target (TGT - Free Report) , a general merchandise retailer in the United States, carries a Zacks Rank #2. TGT delivered an average earnings surprise of 30.8% in the trailing four quarters.
The Zacks Consensus Estimate for Target’s current financial-year EPS suggests growth of 38.5% from the year-ago actuals.
Amazon.com (AMZN - Free Report) , an e-commerce gaint, carries a Zacks Rank #2. AMZN delivered an average earnings surprise of 54.87% in the trailing four quarters.
The Zacks Consensus Estimate for Amazon’s current financial-year sales and EPS suggests growth of 11.1% and 278.9%, respectively, from the year-ago reported figures.