- Diluted loss per share of $(2.10) and Adjusted Diluted loss per
share of $(2.03)
- Reopened stores performing better than anticipated
- E-commerce trend improved in May; curbside pickup performing
well
- Anticipate exiting Q2 in a clean inventory position
Macy’s, Inc. (NYSE: M) today provided preliminary sales and
earnings results for the first quarter of 2020. Macy's, Inc.'s
financial statements for the quarter ended May 2, 2020 are not yet
complete; however, certain preliminary estimated financial
information is available and is shown in the below financial
highlights. These results do not include the non-cash impact of
goodwill and long-lived asset impairment charges, which are
expected to have a material impact on the company’s reported
results. The company will release its first quarter earnings
results and hold a related call on July 1, 2020.
Preliminary Financial Highlights
First Quarter
(All amounts in millions except per share
figures)
2020
2019
Income Statement Highlights
Net sales
$
3,017
$
5,504
Credit card revenues, net
$
131
$
172
Gross margin (a)
$
516
$
2,101
Selling, general and administrative
expenses
$
1,598
$
2,112
Operating income (loss) (b)
$
(969
)
$
203
Net income (loss) (b)
$
(652
)
$
136
Earnings (loss) before interest, taxes,
depreciation and amortization (b)
$
(723
)
$
446
Diluted earnings (loss) per share (b)
$
(2.10
)
$
0.44
Adjusted Net income (loss) (b)
$
(630
)
$
137
Adjusted Earnings (loss) before interest,
taxes, depreciation and amortization (b)
$
(689
)
$
447
Adjusted Diluted earnings (loss) per share
(b)
$
(2.03
)
$
0.44
Balance Sheet Highlights
As of May 2, 2020
As of May 4, 2019
Cash and cash equivalents
$
1,523
$
737
Merchandise inventories
$
4,923
$
5,498
Merchandise accounts payable
$
2,196
$
1,950
Total debt
$
5,657
$
4,721
13 weeks ended
13 weeks ended
Cash Flow Highlights
May 2, 2020
May 4, 2019
Net cash used by operating activities
$
(164
)
$
(38
)
Net cash used by investing activities
$
(113
)
$
(237
)
Net cash provided (used) by financing
activities
$
1,148
$
(158
)
(a): Gross margin is defined as net sales
less cost of sales.
(b): The results for the 13 weeks ended
May 2, 2020 include the benefit of tax law changes resulting from
the CARES Act, but exclude the impact of the non-cash goodwill and
long-lived asset impairment charges, as well as the related tax
impact, that are expected to be incurred for such period. While the
impairment charges are non-cash items, the impact on our reported
results are expected to be material.
Note: Adjusted metrics reflect the
exclusion of certain items from the respective financial measures.
Please see the final pages of this news release for important
information regarding the nature of such excluded amounts and
calculation of the company’s non-GAAP financial measures.
“The COVID-19 pandemic significantly impacted our first quarter
sales and earnings results, but I am proud of the way our team
navigated this difficult period and maintained the business while
our stores were closed,” said Jeff Gennette, chairman and chief
executive officer. “Our strong digital business sales trend
continued throughout May, and it is encouraging to see that as we
reopen a store, the digital business in that geography continues to
be strong. By June 1, we had approximately 450 stores reopened,
with the majority opened in their full format. Our reopened stores
are performing better than anticipated. Importantly, we are
receiving positive feedback on the curbside pickup experience and
our efforts to create a safe and welcoming shopping
environment."
“We are seeing strong sell-through of seasonal merchandise, and
anticipate that we will exit the second quarter in a clean
inventory position. The holiday season will be crucial, and the
team is working now to get the right merchandise and assortment in
place,” continued Gennette.
Today at 11:00 am ET, Gennette and interim chief financial
officer, Felicia Williams, will participate in Cowen and Company’s
‘The New Retail Ecosystem’ virtual conference hosted by managing
director and senior equity research analyst, Oliver Chen. Media and
investors may access a live video webcast of the presentation at
www.macysinc.com/investors. A replay of the webcast will be
available on the company’s website.
About Macy's, Inc.
Macy’s, Inc. (NYSE: M) is one of the nation’s premier
omni-channel fashion retailers, with fiscal 2019 sales of $24.6
billion. The company comprises three retail brands, Macy’s,
Bloomingdale’s and Bluemercury. Macy’s, Inc. is headquartered in
New York, New York. For more information, please visit
www.macysinc.com.
All statements in this press release that are not statements of
historical fact are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Such
statements are based upon the current beliefs and expectations of
Macy’s management and are subject to significant risks and
uncertainties. Actual results could differ materially from those
expressed in or implied by the forward-looking statements contained
in this release because of a variety of factors, including the
finalization of Macy’s financial statements as of and for the 13
weeks ended May 2, 2020, including the actual amount of the
impairment charges that it expects to incur for the period, the
effects of the novel coronavirus (COVID-19) on customer demand, its
supply chain as well as its consolidated results of operation,
financial position and cash flows, Macy's ability to obtain
additional financing on commercially acceptable terms or at all,
Macy’s ability to successfully implement its Polaris strategy,
including the ability to realize the anticipated benefits within
the expected time frame or at all, conditions to, or changes in the
timing of proposed real estate and other transactions, prevailing
interest rates and non-recurring charges, the effect of potential
changes to trade policies, store closings, competitive pressures
from specialty stores, general merchandise stores, off-price and
discount stores, manufacturers’ outlets, the Internet, catalogs and
television shopping and general consumer spending levels, including
the impact of the availability and level of consumer debt, possible
systems failures and/or security breaches, the potential for the
incurrence of charges in connection with the impairment of
intangible assets, including goodwill, Macy’s reliance on foreign
sources of production, including risks related to the disruption of
imports by labor disputes, regional or global health pandemics, and
regional political and economic conditions, the effect of weather
and other factors identified in documents filed by the company with
the Securities and Exchange Commission. Macy’s disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
MACY’S, INC.
Important Information
Regarding Non-GAAP Financial Measures
The company reports its financial results in accordance with
U.S. generally accepted accounting principles (GAAP). However,
management believes that certain non-GAAP financial measures
provide users of the company's financial information with
additional useful information in evaluating operating performance.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) is a non-GAAP financial measure which the company believes
provides meaningful information about its operational efficiency by
excluding the impact of changes in tax law and structure, debt
levels and capital investment. In addition, management believes
that excluding certain items from EBITDA, net income and diluted
earnings per share that are not associated with the company’s core
operations and that may vary substantially in frequency and
magnitude from period-to-period provides useful supplemental
measures that assist in evaluating the company's ability to
generate earnings and to more readily compare these metrics between
past and future periods. For the 13 weeks ended May 2, 2020, the
financial measures within this section do not include the non-cash
impact of goodwill and long-lived asset impairment charges, which
are expected to have a material impact on the company’s reported
results.
Non-GAAP financial measures should be viewed as supplementing,
and not as an alternative or substitute for, the company's
financial results prepared in accordance with GAAP. Certain of the
items that may be excluded or included in non-GAAP financial
measures may be significant items that could impact the company's
financial position, results of operations or cash flows and should
therefore be considered in assessing the company's actual and
future financial condition and performance. The methods used by the
company to calculate its non-GAAP financial measures may differ
significantly from methods used by other companies to compute
similar measures. As a result, any non-GAAP financial measures
presented herein may not be comparable to similar measures provided
by other companies.
MACY’S, INC.
Important Information
Regarding Non-GAAP Financial Measures (All amounts in
millions except per share figures)
Earnings (Loss) before Interest, Taxes,
Depreciation and Amortization, Net Income (Loss) and Diluted
Earnings (Loss) Per Share, Excluding Certain Items
Non-GAAP financial measures, excluding certain items below, are
reconciled to the most directly comparable GAAP measure as
follows:
- EBITDA and adjusted EBITDA are reconciled to GAAP net income
(loss).
- Adjusted net income (loss) is reconciled to GAAP net income
(loss).
- Adjusted diluted earnings (loss) per share is reconciled to
GAAP diluted earnings (loss) per share.
Adjusted EBITDA
13 Weeks Ended
13 Weeks Ended
May 2, 2020
May 4, 2019
Net income (loss)
$
(652
)
$
136
Interest expense, net
47
47
Federal, state and local income tax
expense (benefit)
(355
)
27
Depreciation and amortization
237
236
EBITDA
(723
)
446
Restructuring and other costs
34
1
Adjusted EBITDA
$
(689
)
$
447
Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss)
Per Share
13 Weeks Ended
13 Weeks Ended
May 2, 2020
May 4, 2019
Net Income (Loss)
Diluted Earnings (Loss) Per
Share
Net Income
Diluted Earnings Per Share
As reported
$
(652
)
$
(2.10
)
$
136
$
0.44
Restructuring and other costs
34
0.11
1
—
Income tax impact of certain items
identified above
(12
)
(0.04
)
—
—
As adjusted
$
(630
)
$
(2.03
)
$
137
$
0.44
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200609005236/en/
Media - Blair Rosenberg media@macys.com
Investors - Mike McGuire investors@macys.com
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