Macy's Confirms Q1 Loss, Sees Gradual Near-Term Sales Improvement As Coronavirus Lockdowns End

"While our stores are re-opened, we expect that the COVID-19 pandemic will continue to impact the country for the remainder of the year," said Macy's CEO Jeff Gennette.
Author:
Updated:
Original:

Macy's Inc.  (M) - Get Report confirmed a $630 million first quarter loss Wednesday, but said it expects sales to gradually improve over the remainder of the year as coronavirus lockdown orders ease.

Macy's, which pre-announced its first quarter earnings last month, said its adjusted loss was tabbed at $2.03 per share, or $630 million, on sales of $3.01 billion over the three months ending on May 2.

Macy's said it wouldn't provide a near-term profit forecast, but added that it doesn't expect a nation-wide shutdown of its retail operations and noted that all of its stores are now open following coronavirus-triggered closures in the spring.

“The first quarter of 2020 was challenging for the country, the industry and Macy’s, Inc. While our stores are re-opened, we expect that the COVID-19 pandemic will continue to impact the country for the remainder of the year," said CEO Jeff Gennette. "We do not anticipate another full shutdown, but we are staying flexible and are prepared to address increases in cases on a regional level.”

“We are meeting our customers how and where they are shopping and have enhanced our fulfillment options and health precautions to ensure a safe and welcoming shopping experience,” he added.  

Macy's shares were marked 2% higher in early trading following the earnings release to change hands at $7.04 each, a move that would leave the stock with a year-to-date decline of around 60%.

Last month, Macy's raised $1.3 billion from the sale of senior secured notes maturing in 2025, alongside $3.15 billion from a new credit agreement that is secured by the retailers existing assets. Macy's said the cash will provide sufficient liquidity to address its business needs, including the purchase of new inventory and the repayment of upcoming debt maturities over the next two years.

The stock hit an all-time low of $4.38 on April 1 after it was dumped from the S&P 500 after shedding more than 70% of its value since the start of the year.

In early March, the iconic retailer said it would furlough around 130,000 employees nationwide, and slash pay and benefits for its top executives, as coronavirus closures and 'shelter-at-home' orders keep its stores closed around the country.