Investing.com -- Macy's (NYSE:M) has unveiled an annual net sales forecast that missed average analyst estimates, as the Bloomingdale's owner unveiled strategy overhaul aimed at creating a "more modern" business.
The department store chain has been struggling with weak demand as shoppers, squeezed by high inflation and elevated interest rates, pull back spending on discretionary items.
In a statement on Tuesday, Macy's said it would aim to "strengthen" its brand by focusing on growth in luxury products and simplifying its supply chain and fulfillment operations. Approximately 150 "underproductive" locations would be closed by 2026, the firm added.
Macy's said it expects that, beginning in 2025, the restructuring will lead to low-single-digit full-year comparable sales growth and mid-single digit adjusted earnings before interest, tax, depreciation and amortization.
"We are making the necessary moves to reinvigorate relationships with our customers through improved shopping experiences, relevant assortments and compelling value,” said Chief Executive Tony Spring.
The announcement comes as Macy's faces a challenge for board seats from investment group Arkhouse Management. Arkhouse, which also had a $5.8 billion take-private bid with partner Brigade Capital rejected by Macy's, has accused the firm's executive leadership of having a "history of poor performance."
For its current fiscal year, Macy's estimates that it will deliver net sales of between $22.2 billion to $22.9 billion, just below Bloomberg consensus forecasts of $22.99 billion.
The group called 2024 a "transition and investment year" that "reflects continued operational progress."
Shares in Macy's hovered were lower in premarket U.S. trading on Tuesday.