Macy’s Inc. has delivered first-quarter earnings in line with its previous estimates, which took into account the impact of the coronavirus pandemic on its business.
For the first quarter, the department store logged an adjusted loss of $2.03 per share, less than the $2.57 per share loss that analysts had predicted. On the other hand, revenues for the three months ended May 2 were almost cut in half to $3.02 billion, falling short of Wall Street’s bets of $3.68 billion.
In Wednesday premarket trading, Macy’s stock was down about 1.5% to $6.78.
“The first quarter of 2020 was challenging for the country, the industry and Macy’s Inc.,” chairman and CEO Jeff Gennette said in a statement. “While our stores are reopened, we expect that the COVID-19 pandemic will continue to impact the country for the remainder of the year.”
The company reported that nearly all of its locations have reopened to the public, including those in major metropolitan areas, as state and local governments ease restrictions on nonessential retail. These outposts, it said, continued to perform ahead of expectations through May and June, while e-commerce remained strong across geographies.
Macy’s added that it expects a “gradual” sales recovery in the months ahead.
“We do not anticipate another full shutdown, but we are staying flexible and are prepared to address increases in cases on a regional level,” Gennette said. “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.”
The mixed financial report comes a week after Macy’s revealed that it was implementing thousands of layoffs and downsizing its business. The New York-based corporation — which owns its namesake chain and Bloomingdale’s as well as luxury beauty retailer Bluemercury — plans to eliminate about 3,900 corporate and management positions, or about 3% of its total workforce.
Macy’s has also raised additional funds and tapped its $1.5 billion revolver, as well as furloughed many of its workers during the lockdown period and implemented pay cuts for its top executives.
“While we continue to see challenges ahead, we’ve taken the necessary actions to stabilize our business and give us financial flexibility,” Gennette added. “We are confident we have the right strategy and plans in place to navigate the shifting retail landscape.”
In February, Macy’s unveiled a three-year turnaround plan that included trimming 125 stores from its total footprint, cutting 2,000 jobs — or about 9% of its corporate team — and ramping up investments in higher-margin private labels as well off-price through Macy’s Backstage. The retailer announced expectations for these moves to save $1.5 billion annually by the end of fiscal 2022 and forecasted its top 250 stores would account for 78% of sales by 2021.