Macy’s swings to smaller-than-expected Q2 loss; sales top Street

Macy’s reported a quarterly loss that was less than expected amid strong digital sales and better-than-expected net sales.

But CEO Jeff Gennette said that while the department store company is encouraged by its second-quarter performance, it is planning conservatively for the remainder of the year. 

“Our immediate priority is successfully executing holiday 2020,” Gennette said. “We are also focused on laying the groundwork for 2021 and beyond. 

Macy’s swung to a net loss of $431 million, or a loss of $1.39 a share, for the quarter ended Aug. 1, from net income of $86 million, or $0.28 a share, in the year-ago period. The adjusted per-share loss was $0.81, compared with analysts’ estimates of $1.77. 

Sales fell 35.8% to $3.56 billion, beating Street estimates of $3.50 billion. Same-store sales were down 34.7%, more than expected.  

Digital sales grew 53%, and penetrated 54% of same-store sales. 

"Macy's, Inc. performance for the quarter was stronger than anticipated across all three brands: Macy's, Bloomingdale's and Bluemercury, driven largely by the sales recovery of our stores," said Gennette said. “Restarting our stores’ business was our top priority, and we successfully accomplished that while also ensuring that our digital business remained strong.”

The company said it ended the second quarter with a strong liquidity position. It had roughly $1.4 billion in cash on its balance sheet. Inventory declined 29%.

Similar to most retailers, Macy’s is not currently providing an updated outlook due to ongoing uncertainty as a result of the COVID-19 pandemic. 

“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,” Gennette said.