NEW YORK- 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: See detailed results at:
(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.
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.
A webcast of Macy's, Inc.'s call with analysts and investors to report its second quarter 2020 sales and earnings will be held today (September 2, 2020) at 8:00 a.m. EDT. The management team will also provide an update on the company's Polaris strategy that was shared at investor day on February 5, 2020. The 90-minute webcast, along with the associated presentation, is accessible to the media and general public via the company's investor relations website at www.macysinc.com/investors. Analysts and investors may call in on 1-888-394-8218, passcode 5582978. A replay of the conference call and slides can be accessed on the website or by calling 1-888-203-1112 (same passcode) about two hours after the conclusion of the call. Additional information on Macy's, Inc., including past news releases, is available at www.macysinc.com/pressroom.
Macy's, Inc. is scheduled to present at the Goldman Sachs Annual Global Retailing Conference at 7:30 a.m. EDT on Wednesday, September 9, 2020. Media and investors may access a live audio webcast of the presentation at www.macysinc.com on September 9, 2020. A replay of the webcast will be available on the company's website.
Macy's, Inc. is scheduled to report its third quarter 2020 sales and earnings before the opening of financial markets on Thursday, November 19, 2020.
Important Information Regarding Financial Measures
Please see the final pages of this news release for important information regarding the calculation of the company's non-GAAP financial measures.
About Macy's, Inc.
Macy's, Inc. (NYSE: M) is one of the nation's premier omni-channel fashion retailers. 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 effects of the novel coronavirus (COVID-19) on Macy's customer demand and supply chain, as well as its consolidated results of operation, financial position and cash flows, Macy's ability to successfully implement its Polaris strategy and restructuring, 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, including under the captions 'Forward-Looking Statements' and 'Risk Factors' in the Company's Annual Report on Form 10-K for the year ended February 1, 2020 and Quarterly Report on Form 10-Q for the quarterly period ended May 2, 2020. 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.
Consolidated Statements of Operations (Unaudited) (Note 1): See detailed results at:
Investors - Mike McGuire
Source: Macy's, Inc.