Macy’s Hit By Big Q1 Loss, Expects Gradual Recovery

In the first quarter, Macy’s posted a big loss, but the company said recovery from COVID-19 pandemic-related shutdowns has been strong.

Net loss for the quarter was $3.58 billion, or $11.53 per diluted share, versus net income of $136 million, or 44 cents per diluted share, in the year-prior period.

Adjusted for one-time events, net loss was $630 million, or $2.03 per diluted share, versus net income of $137 million, or 44 cents per diluted share, in the quarter a year earlier. Macy’s adjusted diluted per share loss was not so deep as the $2.57 anticipated in a Thomson Reuters analyst consensus estimate.

Net sales in the quarter were $3.02 billion versus $5.5 billion in the year-previous quarter. Operating loss was $4.12 billion versus operating income of $203 million in the period a year earlier.

Macy’s pointed out that, primarily as a result of the COVID-19 pandemic, its long-term projections and market capitalization changed, requiring interim impairment assessments for its goodwill and long-lived assets. As a result of the assessments, the company recognized pre-tax, non-cash goodwill and long-lived asset impairment charges of $3.1 billion and $80 million, respectively, during the quarter.

Macy’s noted that almost all of its stores have now reopened, including those in the major metropolitan regions. According to the company, stores continued to perform ahead of expectations through May and June, even as the company’s digital sales remained strong across regions.

“While our stores are reopened, we expect that the COVID-19 pandemic will continue to impact the country for the remainder of the year,” said Jeff Gennette, Macy’s chairman and CEO. “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.”