Macy’s, Inc. has announced an update on several actions it has taken to position the company for financial flexibility in response to the continued spread and impact of COVID-19. The company said in a statement that it has access to a revolving credit facility that provides for borrowings and letters of credit in an aggregate amount of 1.5 billion dollars. As a proactive measure, on March 19, 2020, the company decided to access the 1.5 billion dollars available under this facility.
“The retail environment has deteriorated rapidly since we last provided guidance. And while February results met our expectations, we are now operating in an environment with a high degree of uncertainty. The actions we are announcing today give us additional financial flexibility to address the disruption we are seeing in our business, which we anticipate will continue into the foreseeable future,” said Jeff Gennette, Chairman and CEO of the company.
The company is also suspending its regular quarterly cash dividend payout beginning in the second quarter of fiscal 2020. The company added that shareholders of record as of March 13, 2020, will receive the first quarter dividend payment as scheduled. Additionally, the company is reviewing all non-essential operating expenses for opportunities to lower spending and is reducing its capital expenditures in 2020.
Macy’s, Inc. is withdrawing its 2020 sales and earnings guidance issued on February 5, 2020 and has temporarily closed all stores as of March 18, 2020, through March 31, 2020. The company expected net sales for fiscal 2020 to range between 23.6 billion to 23.9 billion dollars, comparable sales on owned plus licensed basis to range between negative 2.5 percent to negative 1.5 percent and comparable sales on owned basis to be approximately 40 basis points better than owned plus licensed and adjusted diluted earnings per share in the range of 2.45 dollars to 2.65 dollars.