Macy’s Inc. (NYSE: M) reported second-quarter fiscal 2020 results before markets opened Wednesday. The struggling department store giant posted an adjusted diluted loss per share of $0.81 on revenues of $3.6 billion. In the same period a year ago, Macy’s reported earnings per share of $0.28 on revenues of $5.5 billion. Second-quarter results also compare to consensus estimates for a loss per share of $1.77 and $3.5 billion in revenue.
On a GAAP basis, the company posted a loss per share of $1.39, including restructuring, impairment and other costs of $242 million (−$0.78 per share).
CEO Jeff Gennette said that the lower-than-expected loss “was driven largely by the sales recovery of our stores.” Same-store sales dropped 34.7% year over year for owned stores and 35.1% for owned plus licensed stores. Digital sales rose 53% year over year in the quarter and “penetrated” at 54% of total owned comparable store sales.
Gross margin improved by 650 basis points sequentially to 23.6%, and inventory was down 29% year over year at the end of the quarter.
Macy’s closed the quarter with about $1.4 billion in cash and around $3 billion in available borrowing on its new asset-based credit facility.
Gennette said that the company’s “immediate” priority is having a successful 2020 holiday season. Macy’s also will focus on “laying the groundwork for 2021 and beyond” by investing in fashion, digital and omnichannel to “galvanize the resources of the company to serve our customers and move the Macy’s, Inc. business forward.”
The retailer already has withdrawn 2020 guidance, but analysts have estimated that the company’s third-quarter loss will be $0.94 per share on sales of $4.0 billion. For the full year, analysts are looking for a net loss per share of $4.37 and revenue totaling $17.2 billion.
Upbeat words from Gennette do not change the fact that, as an industry, brick-and-mortar retail suffers in a long downward trend that shows little sign of turning around.
The less-bad news from the company boosted shares by around 5.2% in Wednesday’s premarket trading to $7.36, after closing at $7.01 on Tuesday. The stock’s 52-week range is $4.38 to $18.57, and the consensus price target on the stock is $6.38.