Macy’s Posts Q3 Loss But Beats Estimates
Macy’s Inc., impacted by the pandemic, posted a net loss of $91 million, or $0.19 cents a share, in the third quarter, versus a net profit of $2 million, or $0.07 a share, in the year-ago period.
Revenues fell to $3.99 billion in the last quarter ended Oct. 31, from $5.17 billion in the year-ago period. Comparable sales were down 20.2 percent even as stores continued to recover and there was continued growth of the digital business.
Digital sales grew 27 percent over third quarter 2019, and represented 38 percent of total owned comparable sales.
The $0.19 loss per share beat consensus estimates by $0.63, and the nearly $4 billion in revenue beat estimates by $130 million.
Earnings before interest, taxes, depreciation and amortization were $113 million, compared to $300 million in the 2019 period.
Macy’s said it achieved positive EBITDA one quarter sooner than expected and that it ended the third quarter with in a “strong” liquidity position with approximately $1.6 billion in cash and approximately $3 billion of untapped capacity in the company’s asset-based credit facility.
Inventory was down 29 percent and the company indicated it exited the quarter in “a clean inventory position.”
Gross margin was 35.6 percent compared to 23.6 percent in the second quarter of 2020, an improvement of approximately 12 percentage points.
“Macy’s Inc.’s third-quarter results reflect solid performance across all three brands — Macy’s, Bloomingdale’s and Bluemercury. Our results were driven by disciplined cost management, strong execution by our colleagues and an early start to the holiday shopping season,” said Jeff Gennette, chairman and chief executive officer.
“Customers shopped our brands across all channels in the third quarter and responded well to our expanded fulfillment offerings, such as curbside, store pickup and same-day delivery. Our digital business delivered strong growth and sales in our stores continued to recover. Customers have shifted their spending to casual apparel and categories they can enjoy as they stay at home. Several of these categories, including home furnishings, jewelry and fragrance, have generated double-digit sales growth compared to last year.
“Looking to holiday 2020, we know this year is different. We are committed to bringing the joy of the season to America as we do every year. From next week’s Thanksgiving Day Parade to reimagined family gatherings, we will help our customers and their families celebrate in style. We have the right gifting assortment with newness from value to luxury, and our expanded fulfillment options allow customers to shop safely and conveniently, in store or online,” Gennette continued. “We continue to watch the resurgence of COVID-19 and its potential impact on our business. Our teams are executing well and have shown the flexibility and agility to adjust plans and provide a great omnichannel experience to our customers.”
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