Macy’s at Valencia Town Center Mall opens for curbside pickup service during COVID-19 outbreak on May 21, 2020 in Santa Clarita, California.
Robin L Marshall | Getty Images
Macy’s shares soared Tuesday as the company released its preliminary financial results, saying it is regaining customers at reopened stores much quicker than it expected.
With the retailer’s stores forced shut for much of its fiscal first quarter due to the coronavirus pandemic, sales are expected to fall 45% to $3.02 billion from $5.5 billion a year ago, the company said.
It is also forecasting a quarterly net loss of $652 million, or $2.10 per share, for the period ended May 2, compared with net earnings of $136 million, or 44 cents a share, in the prior year. Excluding one-time items, the company is reporting a preliminary loss of $2.03 per share.
As of June 1, Macy’s said it had roughly 450 locations were back up and running. This week, stores across New York City, including its flagship Bloomingdale’s shop, are reopening to shoppers for curbside pickup.
“Our reopened stores are performing better than anticipated,” Chief Executive Jeff Gennette said in a statement.
Macy’s shares shot up more than 12% in premarket trading following the release, and on the heels of the company announcing Monday evening it had secured fresh financing.
The company said Monday it raised roughly $4.5 billion in new financing to help it weather the Covid-19 crisis. Macy’s said it now expects to have “sufficient liquidity” to address the needs of its business during this time of upheaval, including buying new inventory and repaying upcoming debt maturities.
CNBC had reported in April that Macy’s was considering the financing as a way to relieve the pressure from having all of its stores temporarily shut.
According to CEO Gennette, the company anticipates ending the second quarter with a lean inventory position, setting it up well for the latter half of 2020.
It is expecting first-quarter inventories to amount to $4.92 billion, down from $5.5 billion a year ago.
“The holiday season will be crucial, and the team is working now to get the right merchandise and assortment in place,” he commented.
Macy’s is set to report its first-quarter earnings on July 1. It is also holding a meeting with analysts later Tuesday morning to discuss these preliminary results.
As of Monday’s market close, Macy’s shares are down about 43% this year. The company has a market cap of $3 billion.