Shares for Macy’s Inc. are up in Wednesday premarket trading after the retailer posted better-than-expected second-quarter earnings and sales.
For the three months ended Aug. 1, the department store posted an adjusted loss of $251 million, or a loss of 81 cents per share, compared with last year’s adjusted profits of $88 million, or earnings of 28 cents per share. Still, it was significantly better than market watchers’ forecasts for a loss of $1.77 per share. Revenues were $3.56 billion, versus the prior year’s $5.55 billion, but also topped consensus bets of $3.47 billion in sales.
As of 8:30 a.m. ET, Macy’s stock climbed more than 5% to $7.38.
In a statement, chairman and CEO Jeff Gennette said that the New York-based company’s performance during the period was “stronger-than-anticipated across all three brands: Macy’s, Bloomingdale’s and Bluemercury, driven largely by the sales recovery of our stores.”
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Although same-store sales were down 34.7% on an owned basis, e-commerce — which made up more than half of total comps — grew 53% over the previous year. Inventory also decreased 29%, allowing the company to exit the three-month period in a “clean inventory position.”
“Going into this crisis, we had a well-developed digital business,” added Gennette, “and we’re seeing that thrive as we attract new and welcome existing customers back to our brands.”
Macy’s finished the quarter with roughly $1.4 billion in cash and approximately $3 billion of untapped capacity in its new asset-based credit facility. The chain previously withdrew its earnings and sales outlook for the 2020 fiscal year and is not currently providing guidance amid the coronavirus pandemic. However, Gennette shared that, while he’s “encouraged” by the Q2 performance, management continues to approach the back half of the year “conservatively,” with a focus on the upcoming holiday shopping season.
“Our immediate priority is successfully executing holiday 2020. We are also focused on laying the groundwork for 2021 and beyond,” he explained. “We plan to invest in fashion, digital and omnichannel, work with agility and galvanize the resources of the company to serve our customers and move the Macy’s Inc. business forward.”