COVID-19 Impact: Macy’s Inc. Reports Steep Loss in Quarter
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Macy’s Inc., deeply impacted by COVID-19 and related charges, reported a first-quarter adjusted loss of $630 million compared to a profit of $137 million in the year-ago quarter.
Including pre-tax, non-cash goodwill and long-lived asset impairment charges of $3.1 billion and $80 million, respectively, the net loss soared to $3.58 billion for the first quarter ended May 2, compared to a profit of $136 million in the year-ago period.
As previously reported, the company had net sales of $3.02 billion in the first quarter, compared to $5.5 billion in the first quarter of 2019.
Nearly all of the company’s stores have now reopened, including stores in the major metropolitan regions. The company said Wednesday that its stores continued to perform ahead of expectations through May and June, and the company’s digital business sales remained strong across geographies. The company continues to expect a gradual sales recovery.
“The first quarter of 2020 was challenging for the country, the industry and Macy’s Inc.,” said Jeff Gennette, chairman and chief executive officer. “While our stores are reopened, we expect that the COVID-19 pandemic will continue to impact the country for the remainder of the year. 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.
“While we continue to see challenges ahead, we’ve taken the necessary actions to stabilize our business and give us financial flexibility. We are confident we have the right strategy and plans in place to navigate the shifting retail landscape,” Gennette continued.
Primarily as a result of the COVID-19 pandemic, the company’s long-term projections and market capitalization changed, requiring interim impairment assessments for its goodwill and long-lived assets. The company is now reporting a diluted loss per share of $11.53 and adjusted diluted loss per share of $2.03.
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