Here Are the Details of Macy's Big Cost-Cutting Plan
Sales growth has slowed and profitability trends have deteriorated rapidly at Macy's (NYSE: M) over the past year, following a brief rebound in 2018. That has caused Macy's stock to crash such that it now trades for less than six times earnings.
Management acknowledges that Macy's faces major obstacles to its profitability, mainly rising delivery costs, labor cost inflation, and stiff competition. On the other hand, the company has managed seven consecutive quarters of comparable-store sales growth, which shows that its investments to drive growth are working. Cost pressure has been the main impediment to Macy's goal of getting earnings growing again.
At an investor conference last week, Macy's executives presented their long-awaited cost-cutting plan. Macy's expects to reduce annual costs by $400 million to $550 million within two to four years, above and beyond the company's usual annual productivity improvements. Here's how it hopes to achieve this target.
Source Fool.com
