Macy’s says store reopening meets highest expectations and “progressive” growth

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Macy’s at the Valencia Town Center Mall opens for curbside pickup during the COVID-19 outbreak on May 21, 2020 in Santa Clarita, California.Robin L Marshall | Getty Images

Macy’s said on Tuesday that he is returning to customers in reopened stores much faster than expected, but that his recovery will be “gradual” from here.In a virtual fireside chat with Cowen & Co. analyst Oliver Chen, Macy’s chief financial officer Felicia Williams said the company does not expect sales trends to normalize until 2021 or maybe 2022.

Macy’s shares have recently declined more than 5%, after skyrocketing more than 12% in the pre-market trade, following the company’s announcement on Monday evening that it had obtained new financing.

With the store forced to close for much of its first fiscal quarter due to the coronavirus pandemic, sales are expected to drop 45% to $ 3.02 billion from 5.5 billion dollars there. A year ago, the company announced on Tuesday morning when it released its preliminary financial results.

It also forecasts a quarterly net loss of $ 652 million, or $ 2.10 per share, for the period ended May 2, compared to net earnings of $ 136 million, or 44 cents per share, the previous year. . Excluding non-recurring items, the company plans to lose $ 2.03 per share on an adjusted basis.

Macy’s said its gross margins should, in the meantime, be more successful in the second quarter, before the trends reverse.

As of June 1, Macy’s has said that about 450 locations are operational again. This week, stores across New York City, including the flagship store in Bloomingdale’s, are reopening their doors to buyers for a curbside pickup.

“Our reopened stores are performing better than expected,” said general manager Jeff Gennette in a statement.

Later Tuesday, in chat with Chen, Gennette said he was confident that people would resume shopping for more formal clothing, although many will get used to living in workout clothes during the pandemic.

“I think people will go back to weddings,” he said.

However, Macy’s does not expect a wave during the holidays. The fourth quarter performance will be similar to that of the third quarter of this year, according to Gennette.

The company said on Monday that it has raised about $ 4.5 billion in new funding to help it overcome the Covid-19 crisis. Macy’s said she now expects to have “sufficient liquidity” to meet the needs of her business during this period of upheaval, including buying new stocks and paying off debt maturities to come.

CNBC reported in April that Macy’s was considering funding as a way to relieve the pressure of temporarily closing all of its stores.

Gennette told analysts on Tuesday that the company’s quality real estate portfolio, including some of its distribution centers, had helped it gain more trust with its banks under the deal.

“We were very pleased with the way our bankers basically … jumped on this, and our banks have practically doubled their position, in many cases,” he said.

According to CEO Gennette, the company plans to end the second quarter with a lean inventory position, which will put it in place for the second half of 2020.

He expects first-quarter inventories to rise to $ 4.92 billion from $ 5.5 billion a year ago.

“The holiday season will be crucial and the team is now working to put together the right goods and assortment,” he said.

Macy’s is expected to release its first quarter results on July 1.

When the market closed on Monday, Macy’s shares were down about 43% this year. The company has a market capitalization of $ 3 billion.

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