Bloomingdale’s owner, Macy's has raised its annual profit forecast, indicating the positive results of its cost-reduction strategies including closing of underperforming stores and cutting jobs.

In February, Macy's announced plans to close approximately 150 stores by 2026 as part of a new strategy, expected to save $100 million in costs this year. Concurrently, the company is expanding its more successful brands by opening 15 new Bloomingdale's locations and at least 30 Bluemercury stores.

Macy's has now revised its annual adjusted earnings per share forecast to a range of $2.55 to $2.90, up from the previous estimate of $2.45 to $2.85.

Despite 2024 being viewed as a transition and investment year, Macy's has adjusted its outlook to consider the cautiousness of consumers in their discretionary spending.

The company expects net sales in fiscal 2024 to have ranged between $22.3 billion and $22.9 billion, slightly up from the prior forecast of $22.2 billion to $22.9 billion.

However, the merchandise margin declined by 100 basis points due to increased discounting of slower-moving warm weather products, reducing the gross margin rate to 39.2 per cent from 40 per cent a year earlier.

Macy's reported a 2.7 per cent drop in net sales to $4.85 billion, slightly below analysts' average expectation of a 2.42 per cent decline to $4.86 billion, according to LSEG data.