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.
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.
