Macy’s says reopened stores are performing better than anticipated
ASSOCIATED PRESS / MARCH 30
The entrance to a Macy’s department store is closed behind barriers and storm shutters remains closed in Orlando, Fla. Macy’s reports preliminary earnings today.
NEW YORK >> Macy’s said today that roughly several hundred stores that have reopened are performing better than anticipated as it disclosed an update on its fiscal first-quarter results.
Like many department stores and other non-essential retailers, Macy’s was forced to close its roughly 800 stores in mid-March and saw its sales evaporate.
The New York-based company said Tuesday that it will likely report sales of $3.02 billion for the three-month period ended May 2. That would mark a 45% drop from the $5.5 billion in the year-ago period and is in line with its previous estimates released late last month.
Macy’s is also estimating a quarterly net loss of $652 million, or $2.10 per share, for the first fiscal quarter. That compares with net earnings of $136 million, or 44 cents per share, in the year-ago period.
Excluding one-time items, it said it’s looking to report a loss of $2.03 per share when it reports final first-quarter results on July 1.
Late Monday, the department store chain said it completed it debt-financing deal, raising about $4.5 billion of new financing. The company said the move will give the company more financial flexibility to navigate the pandemic.
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As of June 1, Macy’s Inc. had about 450 stores reopened, with the majority opened in their full format. In a statement, Macy’s CEO Jeff Gennette said that it’s receiving positive feedback on curbside feedback and its efforts to create a “safe and welcoming” environment.
During a virtual fireside chat with Oliver Chen, senior equity research analyst at Cowen & Co. covering retail and luxury goods, Gennette said that the stores that have reopened are bringing in about 50% of its typical business in the early phases; he had earlier forecast that the stores would capture just 20%.
The company says all of its store including Blue Mercury are expected to be open for curbside pickup by this Friday.
“We are seeing strong sell-through of seasonal merchandise, and anticipate that we will exit the second quarter in a clean inventory position, ” Gennette said in a statement. He noted that the holiday season will be crucial, and the team is working now to get the right merchandise and assortment in place.
Share fell more than 5% or 49 cents, to $9.06 in mid day trading.
