Macy’s Inc. might be bouncing back faster than expected from the coronavirus pandemic.
The department store chain today announced preliminary financial results for the first quarter, with chairman and CEO Jeff Gennette revealing that its reopened locations are performing “better than anticipated” and it could exit the second quarter in a “clean inventory position.”
As its stores were closed for much of the three-month period ended May 2, Macy’s announced predictions for sales to plunge 45% to $3.02 billion — in line with estimates and within the range that the company had provided nearly three weeks ago. It also forecasted an adjusted loss of $630 million, or $2.03 per share, compared with the previous year’s earnings of $137 million, or 44 cents a share. That expected loss is lower than consensus bets of a $2.82 per share loss.
At the start of the month, Macy’s had resumed operations at roughly 450 stores as its executes its reopening plan. The new stores, according to the company, are now outfitted with sneeze guards, sanitizing stations and social distancing signs. Plus, workers are required to use personal protective equipment, and services like alterations have been suspended for customers for the time being.
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What’s more, the retailer added that it was seeing a strong sell-through of its seasonal merchandise and expects to exit the lockdown without an inventory burden.
“Our strong digital business sales trend continued throughout May, and it is encouraging to see that as we reopen a store, the digital business in that geography continues to be strong,” explained Gennette. “The holiday season will be crucial, and the team is working now to get the right merchandise and assortment in place.”
Macy’s shares surged upwards of 15% in premarket trading following the release. As of 9:30 a.m. ET, its stock rose 6% to more than $10.
The preliminary results came on the heels of the company’s announcement last night that it had shored up fresh financing to help bolster its business amid the ongoing COVID-19 health crisis. Macy’s revealed that it has raised about $4.5 billion, including $3.15 billion secured by its existing assets. It expects to have “sufficient liquidity” to fund operations, purchase new inventory for upcoming seasons, resolve its accrued payables obligations and repay upcoming debt maturities, among other needs.
Macy’s is set to release its first-quarter financial results on July 1.