Macy’s, Inc. (NYSE: M) today reported results for the second quarter of 2020.
“Macy’s, Inc. performance for the quarter was stronger than anticipated across all three brands: Macy’s, Bloomingdale’s and Bluemercury, driven largely by the sales recovery of our stores. Restarting our stores’ business was our top priority, and we successfully accomplished that while also ensuring that our digital business remained strong. Going into this crisis, we had a well-developed digital business and we’re seeing that thrive as we attract new and welcome existing customers back to our brands,” said Jeff Gennette, chairman and chief executive officer of Macy’s, Inc. “We’ve put significant focus on enhanced health and safety standards which has allowed our customers and colleagues to feel safe in our stores and facilities. I want to thank our colleagues for the tremendous effort that has been put into recovering our business.
“We are encouraged by our second quarter performance; however, we continue to approach the back half of the year conservatively. Our immediate priority is successfully executing Holiday 2020. We are also focused on laying the groundwork for 2021 and beyond. We plan to invest in fashion, digital and omnichannel, work with agility, and galvanize the resources of the company to serve our customers and move the Macy’s, Inc. business forward,” Gennette continued.
Financial Highlights
| (a): The results for the 26 weeks ended August 1, 2020 include the pre-tax impact of the non-cash goodwill and long-lived asset impairment charges of $3.1 billion and $80 million, respectively, as well as the related tax impact. |
| (b): The results for the 13 and 26 weeks ended August 1, 2020 include benefits of tax law changes resulting from the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. |
| 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. |
Second Quarter Highlights
- Comparable sales were down 34.7% on an owned basis and down 35.1% on an owned plus licensed basis, due to faster paced store recovery than originally modeled and better than expected growth of digital business.
- Digital sales remained strong, growing 53% over second quarter 2019. Digital sales penetrated at 54% of total owned comparable sales.
- Delivered gross margin of 23.6%, an improvement of approximately 650 basis points from first quarter 2020 due to improved retail margins from mix and better sell through of clearance merchandise.
- Inventory was down 29% from a year ago, allowing the company to exit second quarter in a clean inventory position.
- Selling, general and administrative (“SG&A”) expense of $1.4 billion, down $779 million from second quarter last year, illustrating efficient expense management associated with the swift actions undertaken in response to the COVID-19 pandemic as well as execution against our Polaris strategy. SG&A expense rate of 39.2%, was relatively consistent with prior year.
- Diluted loss per share of $(1.39) and Adjusted diluted loss per share of $(0.81).
- Finished the quarter in a strong liquidity position with approximately $1.4 billion in cash and approximately $3 billion of untapped capacity in the company’s new asset-based credit facility.
2020 Guidance
The company previously withdrew its 2020 sales and earnings guidance and is not currently providing an updated outlook due to ongoing uncertainty as a result of the COVID-19 pandemic.
