Macy's (M) Stock Forecast & Price Target

Macy's has demonstrated positive sales momentum, with comparable sales improving by 1.2% on an owned plus-licensed-plus-marketplace basis and 0.4% on an owned basis during the quarter. The company achieved its highest ever second quarter net promoter score, reflecting increased customer engagement and satisfaction, which is crucial for long-term brand loyalty and growth. Additionally, Macy's has raised its fiscal year 2025 earnings per share guidance to a range of $1.70-$2.05, indicating confidence in its financial performance moving forward.

Macy's faces significant challenges reflected in its declining sales due to store rationalization, which adversely impacted net sales by over 300 basis points in the most recent quarter, equating to a $170 million loss from the closure of 64 stores. This ongoing headwind continues to affect topline performance, with an estimated contribution of approximately $700 million in lost net sales for FY24. Additionally, while selling, general, and administrative expenses (SG&A) are expected to decline year-over-year on a dollar basis, a projected deleverage of 60 to 80 basis points suggests inefficiencies that could further strain financial performance.