Macy's expects Q1 operating loss of $1.1 billion; 270 stores open by Memorial Day
Macy’s on Thursday said it expects first-quarter sales to fall by as much as 45% as its stores remained dark during the COVID-19 outbreak.
The nation’s largest department store operator said it expects to report sales in the range of $3 billion to $3.03 billion, down from $5.50 billion last year, and an operating loss of $905 million to $1.11 billion when it reports first-quarter earnings on July 1. (Last year, Macy's reported operating income of $203 million.)
The retailer said its performance in February was solid and in line with expectations, but that it saw a “precipitous decline” in sales when it was forced to close its stores in March due to the virus.
“We experienced a steady uptick in our digital business in April, which was encouraging, but only partially offset the loss of sales from the stores,” said CEO Jeff Gennette. “We expect business to recover gradually.”
As of this week, 190 Macy’s and Bloomingdale’s locations have reopened, with another 80 Macy’s stores expected to reopen by Memorial Day. The company expects most of its stores to have reopened by late June.
Macy’s noted that it has enhanced health and safety standards across all its stores and facilities. It is also offering curbside pickup in many locations, including some stores that remain closed to the public.
"With two weeks of results from reopened stores, customer demand is moderately higher than we anticipated," said Gennette. “We are closely watching consumer behavior as we reopen more stores, and we remain flexible as we navigate this crisis.
Macy’s said its efforts to come up with additional financing to help it get through the crisis are on track.
“We notified our banking partners early on of our plans to access additional financing, and this process is on track,” Gennette stated. “We are confident we will obtain this financing before it is needed, allowing us to improve our financial flexibility.”
Separately, Macy’s said Felicia Williams, the company’s senior VP, controller and enterprise risk officer, with step in as interim CFO, succeeding Paula Price, whose departure was previously announced.