Macy's (M) Reports Prelim. Q1 Loss Per Share of $2.03
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.
(Consensus calls for Q1 EPS of -$2.33 on revenue of $3.01 billion)
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.