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Macy's swings to loss but strong online growth boosts sales

By Prachi Singh

2 Sep 2020

For the second quarter, Macy’s, Inc. total sales declined to 3,559 million dollars. Comparable sales for the period were down 34.7 percent on an owned basis and down 35.1 percent on an owned plus licensed basis, due to faster paced store recovery than originally modeled and better than expected growth of digital business.

The company’s digital sales grew 53 percent and penetrated at 54 percent of total owned comparable sales. The company delivered gross margin of 23.6 percent, an improvement of approximately 650 basis points from first quarter, while net loss for the quarter was 431 million dollars and diluted loss per share was 1.39 dollars and adjusted diluted loss per share of 81 cents.

Macy’s swings to loss

“Macy’s 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. Going into this crisis, we had a well-developed digital business and we’re seeing that thrive as we attract new and welcome existing customers back to our brands,” said Jeff Gennette, Chairman and CEO of Macy’s, Inc. in a statement.

For the six month period, the company reported net sales of 6,576 million dollars compared to 11,050 million dollars in the same period of the previous year. The company posted net loss of 4,012 million dollars or loss of 12.91 dollars per diluted share compared to net income of 223 million dollars or diluted earnings per share of 81 cents. On an adjusted basis, net loss was 881 million dollars or 2.83 cents per diluted share compared to adjusted net income of 225 million dollars or 72 cents per diluted share.

In June, Macy’s announced it would be cutting approximately 3,900 corporate roles and reducing staff across stores, supply chain and customer support in a bid to mitigate the financial impact of Covid-19. The company said it expects to save around 365 million in fiscal 2020 from the move.

Picture: Macy's media assets