The company's Chairman and CEO Jeff Gennette commented, "Macy's Inc. 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. Restarting our stores' business was our top priority, and we successfully accomplished that while also ensuring that our digital business remained strong. 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."
"We are encouraged by our second quarter performance; however, we continue to approach the back half of the year conservatively. Our immediate priority is successfully executing Holiday 2020. We are also focused on laying the groundwork for 2021 and beyond. We plan to invest in fashion, digital and omnichannel, work with agility, and galvanize the resources of the company to serve our customers and move the Macy's, Inc. business forward," Gennette added.
The company reported that Q2/20 comparable sales decreased by 34.7% on an owned basis and were down 35.1% on an owned plus licensed compared to Q2/19. The firm mentioned that this was due to faster paced store recovery than originally modeled and better than expected growth of digital business. Macy's pointed out that digital sales in Q2/20 were very strong, growing by 53% over those in Q2/19, and that in Q2/20 digital sales penetrated at 54% of total owned comparable sales.
The firm indicated that it saw a 650 basis point improvement in gross margin in Q2/20 versus Q1/20 due to improved retail margins from mix and better sell through of clearance merchandise. The company also stated that its cleaned up its inventory position significantly reducing the inventory level by 29% compared to Q2/19.
The company reported that in Q2/20 it posted a diluted loss per share of $1.39 and adjusted diluted loss per share of $0.81.
The firm stated that "it finished the quarter in a strong liquidity position with approximately $1.4 billion in cash and approximately $3 billion of untapped capacity in the company's new asset-based credit facility."
The company noted that due to ongoing uncertainty of the COVID-19 pandemic it previously withdrew its 2020 sales and earnings guidance and is not providing an updated outlook at this time.
Macy's Inc. is a well known omni-channel fashion retailer headquartered in New York. In addition to the iconic Macy' department store name, the company owns Bloomingdale's and Bluemercury. The firm sells a wide range of branded and private label merchandise, including apparel, accessories, cosmetics, home furnishings and other consumer goods.
Macy's has a market capitalization of around $2.2 billion with approximately 310.2 million shares outstanding and a short interest of about 41.6%. M shares opened relatively unchanged today at $7.08 (+$0.03, +0.43%) over yesterday's $7.05 closing price. The stock has traded today between $7.07 and $7.98 per share and is currently trading at $7.73 (+$.68, +9.65%).[NLINSERT]
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