Macy’s Inc., significantly impacted by the pandemic during March and April but now steadily reopening stores, estimates that it had an operating loss of between $905 million and $1.11 billion in the first quarter of 2020.
Net sales are seen having come in between $3 billion and $3.03 billion, according to the preliminary first-quarter report issued Thursday.
The $24.6 billion retailer also said it expects business to return gradually and that digital sales continue to improve, with most of its stores expected to be reopened by late June.
Macy’s will release its first-quarter earnings results and hold a related call on July 1.
In the first quarter of 2019, the company reported operating income of $203 million on sales of $5.5 billion.
Macy’s estimates that it ended the first quarter with total debt of $5.66 billion and cash and cash equivalents of $1.52 billion. That compares to $4.72 billion in debt and $737 million in cash and cash equivalents in the year-ago quarter.
All of the Macy’s, Bloomingdale’s and Bluemercury stores were temporarily closed on March 18. Stores began to reopen on May 4.
“Looking back, our performance in February was solid and in line with our expectations, but we saw a precipitous decline in sales with the stores closure in March,” said Jeff Gennette, Macy’s Inc. chairman and chief executive officer. “As a developed omnichannel retailer, we experienced a steady uptick in our digital business in April, which was encouraging, but only partially offset the loss of sales from the stores. The digital performance was driven by strong execution and enhanced fulfillment options, including curbside pickup where allowed.”
Gennette said that as of this week, the company has about 190 Macy’s and Bloomingdale’s stores open in their full formats. “We expect another 80 Macy’s stores to open for Memorial Day weekend,” Gennette said. “We have enhanced health and safety standards across all of our stores and facilities. We are also offering curbside pickup in many of our locations, including some stores that remain closed to the public.
“With two weeks of results from reopened stores, customer demand is moderately higher than we anticipated. Customers also responded positively to our Mother’s Day gifting strategy. Even in times of social distancing, our customers want to celebrate the special occasions in their lives, and we help them do that safely. We are closely watching consumer behavior as we reopen more stores, and we remain flexible as we navigate this crisis. We expect business to recover gradually. I want to thank our teams who are resetting plans daily, innovating quickly and executing well.”
Gennette said Macy’s previously announced plans to raise additional financing are “on track,” adding, “We are confident we will obtain this financing before it is needed, allowing us to improve our financial flexibility. We are taking the right steps to ensure that Macy’s Inc. will emerge on the other side of this crisis a strong, resilient company and ready to serve our customers.”
With Paula Price, chief financial officer, officially leaving Macy’s on May 31, Felicia Williams, a Macy’s Inc. veteran serving as senior vice president, controller and enterprise risk officer, will become interim chief financial officer.
Price will remain an adviser to the company through November.