Corporate bond research firm Gimme Credit downgraded Macy's (NYSE:M) to Stable from Improving in a note Thursday.
The firm stated that for Macy's, fiscal 2024 will be a transition year, with softer results expected until the benefits of "A Bold New Chapter" plan potentially kick in.
Macy's (M) unveiled "A Bold New Chapter." This is the company's strategic plan that calls for a strengthening of the Macy's brand, "accelerating luxury growth, and rationalizing and monetizing stores and distribution centers as well as achieving $235 million in run-rate cost savings through streamlining fulfillment, improving inventory planning and allocation, and enhancing technology," explained Gimme Credit.
"Based on our projections, we expect leverage to increase modestly in fiscal 2024. Based on the near-term expected rise in leverage, we lower our credit score to 0," the firm explained.
The firm added that beginning in fiscal 2025, M's expects to achieve low-single digit comparable owned plus licensed and marketplace sales growth, adjusted EBITDA growth in the mid-single digits, and free cash flow consistent with pre-pandemic levels.