Macy’s reports $3.58bn net loss in first quarter

US-based department-store group Macy’s reported an adjusted net loss of $630m for the first quarter of 2020, compared with a loss of $137m in the period last year.

Including the pre-tax impact of non-cash goodwill and long-lived asset impairment charges, net loss came in at $3.58bn.

As reported, the retailer’s net sales were down 45% to $3.017bn in the first quarter ending May 2. Net loss came in at $650m, compared with a profit of $136m in the same period last year.

Macy’s chairman and ceo Jeff Gennette said that there is still a high degree of uncertainty in the market, causing the retailer to take a conservative approach in the second half of the year.

He noted that the pandemic is “still in full swing” in some parts of the US and, while the company does not expect another national shutdown, it does anticipate a regional impact as consumers are encouraged to stay home. Most of its stores are currently on reduced hours and will remain flexible to meet demand, Gennette added.

While most locations have re-opened, many of the malls in which Macy’s operates are closed, and some have re-closed, in areas that are experiencing a COVID-19 resurgence. Even in malls that are open, many other stores and services are still shuttered, leading to an impact on Macy’s store traffic, Gennette noted.

He added that its stores are now running down about 35%. The retailer is taking a conservative view in pulling the trend through the back-half of the year. If trends improve, Gennette said the retailer will “react aggressively to meet customer demand.”

However, digital sales have been strong. The retailer expects digital sales to see double-digit growth rate.Macy’s says its newly acquired customers through online retail are younger and more diverse in its core customer.Gennette added that the company is working on strategies to retain these new shoppers and, over time, convert them to omni shoppers. He noted that beauty, furniture and soft home sales have been particularly strong online.

As reported, Macy’s announced last month that it would cut 3,900 jobs in a bid to reduce costs in the wake of the COVID-19 pandemic. The elimination of the nearly 4,000 corporate and management jobs are expected to help the company save $630m per year.

 

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