Macy's Anticipates Large Decline for Q1 2020 Results

May 21st, 2020

Jessie Kern

Macy's saw sales were in line with expectations in February, but once stores were forced to close in March, the business began seeing a precipitous decline.

Macy’s has released the preliminary results for Q1 2020 which indicates that sales performance in February was in line with expectations, while COVID-19 significantly impacted March and April sales. Estimated Q1 2020 sales are projected between $3,000 million and $3,030 million; whereas Q1 2019 sales totaled $5,504 million.

Previously: Macy’s to Reopen Amid ‘Loosened Social Distancing Restrictions’

The brand is seeing continued improvement in digital sales and expects business to return gradually with most stores will be reopened by late June. The company will release Q1 2020 results on July 1, 2020.

Additionally, current CFO Paula Price is leaving the company May 31, 2020 but will remain an adviser through November 2020. Upon her departure, Felicia Williams, a seasoned Macy’s, Inc. veteran who currently serves as senior vice president, controller and enterprise risk officer, will become interim CFO until the position is permanently filled.

Previously: Macy's Financial Results Decline, Holiday Season Upticks Q4

In response to the preliminary Q1 2020 results Macy’s chairman and CEO Jeff Gennette commented:

This is a challenging time for the country, for retail and for Macy’s, Inc. COVID-19 has impacted the lives of many of our colleagues and customers, and health and safety remain our top priority. We closed all of our stores—Macy’s, Bloomingdale’s and Bluemercury—on March 18, which had a significant impact on our first quarter results. 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. 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.

We began reopening our stores on May 4 and, as of this week, have approximately 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. 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 re-setting plans daily, innovating quickly and executing well.

We notified our banking partners early on of our plans to access additional financing, and this process is on track. 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.