Macy’s Reduces and Extends Credit Facility to Strengthen Liquidity Position

Macy’s, Inc. has amended and extended its asset-based credit facility, securing $2.1 billion in committed liquidity through April 2030. The revised agreement, executed on April 9, 2025, replaces the company’s prior $3.0 billion facility set to expire in March 2027.

The new arrangement reduces borrowing capacity but offers lower fees and more favorable terms. Macy’s Inventory Funding LLC remains the borrower, with Macy’s Inventory Holdings LLC as guarantor. As of the end of fiscal 2024, the facility was undrawn, and Macy’s reported $1.3 billion in cash and cash equivalents.

Key terms of the amended credit facility include:

Total committed borrowing: $2.1 billion

Maturity: April 2030

Interest rates: Based on adjusted SOFR +1.25% to 1.50% or base rate +0.25% to 0.50%, depending on utilization

Optional increase: Up to $1.75 billion in additional commitments

Collateral: First priority lien on inventory and equity of the ABL Borrower

Covenants: Includes financial maintenance tests and restrictions on debt, dividends, and asset sales

This move enhances Macy’s flexibility by locking in lower borrowing costs while maintaining access to a sizable credit reserve.

Macy’s, Inc. (NYSE: M) reported its financial results for the fourth quarter and fiscal year 2024, along with its 2025 guidance.

Key highlights:
- Fourth quarter GAAP diluted earnings per share (EPS) was $1.21, while adjusted diluted EPS was $1.80, exceeding prior guidance.
- Comparable sales were down 1.1% on an owned basis but up 0.2% on an owned-plus-licensed-plus-marketplace basis.
- Macy’s First 50 locations saw comparable sales growth of 0.8% on an owned basis and 1.2% on an owned-plus-licensed basis.
- Bloomingdale’s recorded 4.8% owned comparable sales growth and its best 6.5% owned-plus-licensed-plus-marketplace sales growth.
- Bluemercury continued its growth, with comparable sales up 6.2% for the 16th consecutive quarter.
- Ended fiscal year 2024 with $1.3 billion in cash, up $272 million year-over-year.
- Generated $1.3 billion in operating cash flow and $679 million in free cash flow.
- Announced intent to resume share buybacks under the remaining $1.4 billion share repurchase authorization.

Fourth quarter 2024 results (year-over-year comparison):
- Net sales were $7.8 billion, down 4.3%.
- Gross margin rate was 35.7%, down 80 basis points.
- SG&A expenses were $2.4 billion, down $23 million, reflecting cost discipline.
- GAAP diluted EPS was $1.21; adjusted diluted EPS was $1.80, compared to $2.24 in Q4 2023.
- Operating income was $500 million, up from a loss of $149 million last year.

Fiscal year 2024 results (year-over-year comparison):
- Net sales were $22.3 billion, down 3.5%.
- Comparable sales were down 2.0% on an owned basis and down 0.9% on an owned-plus-licensed-plus-marketplace basis.
- Gross margin rate was 38.4%, flat year-over-year.
- GAAP diluted EPS was $2.07; adjusted diluted EPS was $2.64, compared to $3.28 in fiscal year 2023.
- Free cash flow was $679 million.

2025 outlook:
- Net sales are projected to be between $21.0 billion and $21.4 billion.
- Comparable owned-plus-licensed-plus-marketplace sales are expected to be down approximately 2.0% to down 0.5%.
- Adjusted diluted EPS is expected to be between $2.05 and $2.25.
- Core adjusted EBITDA margin is projected to be between 8.0% and 8.2%.

CEO Tony Spring highlighted that Macy’s strategy is delivering results, with comparable sales improving to their best level in 11 quarters. He noted that growth in the First 50 locations and luxury segments, including Bloomingdale’s and Bluemercury, are strong drivers.

CFO Adrian Mitchell reaffirmed Macy’s commitment to elevating the customer experience, maintaining operational efficiency, and returning capital to shareholders through dividends and share buybacks.

Balance sheet and liquidity:
- Cash position of $1.3 billion with no short-term borrowings.
- Total debt of $2.8 billion, with no major maturities until 2027.
- Merchandise inventory increased 2.5%, partly due to the shift to cost accounting.

Share repurchase plan:
Macy’s intends to resume share buybacks under its $1.4 billion authorization, depending on market conditions.

Macy’s, Inc. filed a Form 8-K on February 28, 2025, announcing that its Board of Directors has scheduled the company’s annual stockholder meeting for May 16, 2025. The record date for stockholders eligible to vote at the meeting has been set for March 20, 2025.