Macy’s, Inc. Reports Second Quarter 2020 Results

NEW YORK--(BUSINESS WIRE)-- Macy’s, Inc. (NYSE: M) today reported results for the second quarter of 2020.

“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,” said Jeff Gennette, chairman and chief executive officer of Macy’s, Inc. “We’ve put significant focus on enhanced health and safety standards which has allowed our customers and colleagues to feel safe in our stores and facilities. I want to thank our colleagues for the tremendous effort that has been put into recovering our business.

“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 continued.

Financial Highlights

 

Second Quarter

First Half

(All amounts in millions, except per share figures)

2020

2019

2020

2019

Net sales

$

3,559

 

$

5,546

 

$

6,576

 

$

11,050

 

 

 

 

Net income (loss) (a) (b)

$

(431)

 

$

86

 

$

(4,012)

 

$

223

 

Earnings (loss) before interest, taxes, depreciation and amortization (a) (b)

$

(422)

 

$

400

 

$

(4,294)

 

$

846

 

Diluted earnings (loss) per share (a) (b)

$

(1.39)

 

$

0.28

 

$

(12.91)

 

$

0.71

 

 

 

 

Adjusted Net income (loss) (b)

$

(251)

 

$

88

 

$

(881)

 

$

225

 

Adjusted Earnings (loss) before interest, taxes, depreciation and amortization (b)

$

(142)

 

$

402

 

$

(830)

 

$

849

 

Adjusted Diluted earnings (loss) per share (b)

$

(0.81)

 

$

0.28

 

$

(2.83)

 

$

0.72

 

(a): The results for the 26 weeks ended August 1, 2020 include the pre-tax impact of the non-cash goodwill and long-lived asset impairment charges of $3.1 billion and $80 million, respectively, as well as the related tax impact.

(b): The results for the 13 and 26 weeks ended August 1, 2020 include benefits of tax law changes resulting from the Coronavirus Aid, Relief and Economic Security ("CARES") Act.

Note: Adjusted metrics reflect the exclusion of certain items from the respective financial measures. Please see the final pages of this news release for important information regarding the nature of such excluded amounts and calculation of the company’s non-GAAP financial measures.

Second Quarter Highlights

  • Comparable sales were down 34.7% on an owned basis and down 35.1% on an owned plus licensed basis, due to faster paced store recovery than originally modeled and better than expected growth of digital business.
  • Digital sales remained strong, growing 53% over second quarter 2019. Digital sales penetrated at 54% of total owned comparable sales.
  • Delivered gross margin of 23.6%, an improvement of approximately 650 basis points from first quarter 2020 due to improved retail margins from mix and better sell through of clearance merchandise.
  • Inventory was down 29% from a year ago, allowing the company to exit second quarter in a clean inventory position.
  • Selling, general and administrative (“SG&A”) expense of $1.4 billion, down $779 million from second quarter last year, illustrating efficient expense management associated with the swift actions undertaken in response to the COVID-19 pandemic as well as execution against our Polaris strategy. SG&A expense rate of 39.2%, was relatively consistent with prior year.
  • Diluted loss per share of $(1.39) and Adjusted diluted loss per share of $(0.81).
  • 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.

2020 Guidance

The company previously withdrew its 2020 sales and earnings guidance and is not currently providing an updated outlook due to ongoing uncertainty as a result of the COVID-19 pandemic.

A webcast of Macy's, Inc.’s call with analysts and investors to report its second quarter 2020 sales and earnings will be held today (September 2, 2020) at 8:00 a.m. EDT. The management team will also provide an update on the company’s Polaris strategy that was shared at investor day on February 5, 2020. The 90-minute webcast, along with the associated presentation, is accessible to the media and general public via the company's investor relations website at www.macysinc.com/investors. Analysts and investors may call in on 1-888-394-8218, passcode 5582978. A replay of the conference call and slides can be accessed on the website or by calling 1-888-203-1112 (same passcode) about two hours after the conclusion of the call. Additional information on Macy’s, Inc., including past news releases, is available at www.macysinc.com/pressroom.

Macy's, Inc. is scheduled to present at the Goldman Sachs Annual Global Retailing Conference at 7:30 a.m. EDT on Wednesday, September 9, 2020. Media and investors may access a live audio webcast of the presentation at www.macysinc.com on September 9, 2020. A replay of the webcast will be available on the company’s website.

Macy’s, Inc. is scheduled to report its third quarter 2020 sales and earnings before the opening of financial markets on Thursday, November 19, 2020.

Important Information Regarding Financial Measures

Please see the final pages of this news release for important information regarding the calculation of the company’s non-GAAP financial measures.

About Macy’s, Inc.

Macy’s, Inc. (NYSE: M) is one of the nation’s premier omni-channel fashion retailers. The company comprises three retail brands, Macy’s, Bloomingdale’s and Bluemercury. Macy’s, Inc. is headquartered in New York, New York. For more information, please visit www.macysinc.com.

Forward-Looking Statements

All statements in this press release that are not statements of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of Macy’s management and are subject to significant risks and uncertainties. Actual results could differ materially from those expressed in or implied by the forward-looking statements contained in this release because of a variety of factors, including the effects of the novel coronavirus (COVID-19) on Macy's customer demand and supply chain, as well as its consolidated results of operation, financial position and cash flows, Macy’s ability to successfully implement its Polaris strategy and restructuring, including the ability to realize the anticipated benefits within the expected time frame or at all, conditions to, or changes in the timing of proposed real estate and other transactions, prevailing interest rates and non-recurring charges, the effect of potential changes to trade policies, store closings, competitive pressures from specialty stores, general merchandise stores, off-price and discount stores, manufacturers’ outlets, the Internet, catalogs and television shopping and general consumer spending levels, including the impact of the availability and level of consumer debt, possible systems failures and/or security breaches, the potential for the incurrence of charges in connection with the impairment of intangible assets, including goodwill, Macy’s reliance on foreign sources of production, including risks related to the disruption of imports by labor disputes, regional or global health pandemics, and regional political and economic conditions, the effect of weather and other factors identified in documents filed by the company with the Securities and Exchange Commission, including under the captions “Forward-Looking Statements” and “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended February 1, 2020 and Quarterly Report on Form 10-Q for the quarterly period ended May 2, 2020. Macy’s disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

MACY’S, INC.

 

Consolidated Statements of Operations (Unaudited) (Note 1)

(All amounts in millions except percentages and per share figures)

 

 

 

13 Weeks Ended

 

13 Weeks Ended

 

 

August 1, 2020

 

August 3, 2019

 

 

$

 

% to
Net sales

 

$

 

% to
Net sales

 

 

 

 

 

 

 

 

 

Net sales

 

$

3,559

 

 

 

 

 

$

5,546

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit card revenues, net

 

168

 

 

 

4.7

%

 

176

 

 

 

3.2

%

 

 

 

 

 

 

 

 

 

Cost of sales

 

(2,718

)

 

 

(76.4

%)

 

(3,395

)

 

 

(61.2

%)

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

(1,398

)

 

 

(39.2

%)

 

(2,177

)

 

 

(39.3

%)

 

 

 

 

 

 

 

 

 

Gains on sale of real estate

 

 

 

 

%

 

7

 

 

 

0.1

%

 

 

 

 

 

 

 

 

 

Restructuring, impairment and other costs (Note 2)

 

(242

)

 

 

(6.8

%)

 

(2

)

 

 

%

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

(631

)

 

 

(17.7

%)

 

155

 

 

 

2.8

%

 

 

 

 

 

 

 

 

 

Benefit plan income, net

 

12

 

 

 

 

 

8

 

 

 

 

 

 

 

 

 

 

 

 

 

Settlement charges

 

(38

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(69

)

 

 

 

 

(47

)

 

 

 

 

 

 

 

 

 

 

 

 

Financing costs

 

(3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

(729

)

 

 

 

 

116

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal, state and local income tax benefit (expense) (Note 3)

 

298

 

 

 

 

 

(30

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(431

)

 

 

 

 

$

86

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share

 

$

(1.39

)

 

 

 

 

$

0.28

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share

 

$

(1.39

)

 

 

 

 

$

0.28

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common shares:

 

 

 

 

 

 

 

 

Basic

 

311.2

 

 

 

 

 

309.8

 

 

 

 

Diluted

 

311.2

 

 

 

 

 

311.6

 

 

 

 

 

 

 

 

 

 

 

 

 

End of period common shares outstanding

 

310.2

 

 

 

 

 

308.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Financial Measures:

 

 

 

 

 

 

 

 

Gross Margin (Note 4)

 

$

841

 

 

 

23.6

%

 

$

2,151

 

 

 

38.8

%

Depreciation and amortization expense

 

$

235

 

 

 

 

 

$

237

 

 

 

 

MACY’S, INC.

 

Consolidated Statements of Operations (Unaudited) (Note 1)

(All amounts in millions except percentages and per share figures)

 

 

 

26 Weeks Ended

 

26 Weeks Ended

 

 

August 1, 2020

 

August 3, 2019

 

 

$

 

% to
Net sales

 

$

 

% to
Net sales

 

 

 

 

 

 

 

 

 

Net sales

 

$

6,576

 

 

 

 

 

$

11,050

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit card revenues, net

 

299

 

 

 

4.5

%

 

348

 

 

 

3.1

%

 

 

 

 

 

 

 

 

 

Cost of sales

 

(5,219

)

 

 

(79.4

%)

 

(6,798

)

 

 

(61.5

%)

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

(2,995

)

 

 

(45.4

%)

 

(4,287

)

 

 

(38.8

%)

 

 

 

 

 

 

 

 

 

Gains on sale of real estate

 

16

 

 

 

0.2

%

 

49

 

 

 

0.4

%

 

 

 

 

 

 

 

 

 

Impairment, restructuring and other costs (Note 2)

 

(3,426

)

 

 

(52.1

%)

 

(3

)

 

 

%

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

(4,749

)

 

 

(72.2

%)

 

359

 

 

 

3.2

%

 

 

 

 

 

 

 

 

 

Benefit plan income, net

 

21

 

 

 

 

 

15

 

 

 

 

 

 

 

 

 

 

 

 

 

Settlement charges

 

(38

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(117

)

 

 

 

 

(94

)

 

 

 

 

 

 

 

 

 

 

 

 

Financing costs

 

(3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

(4,886

)

 

 

 

 

280

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal, state and local income tax benefit (expense) (Note 3)

 

874

 

 

 

 

 

(57

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(4,012

)

 

 

 

 

$

223

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share

 

$

(12.91

)

 

 

 

 

$

0.72

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share

 

$

(12.91

)

 

 

 

 

$

0.71

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common shares:

 

 

 

 

 

 

 

 

Basic

 

310.9

 

 

 

 

 

309.5

 

 

 

 

Diluted

 

310.9

 

 

 

 

 

311.5

 

 

 

 

 

 

 

 

 

 

 

 

 

End of period common shares outstanding

 

310.2

 

 

 

 

 

308.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Financial Measures:

 

 

 

 

 

 

 

 

Gross Margin (Note 4)

 

$

1,357

 

 

 

20.6

%

 

$

4,252

 

 

 

38.5

%

Depreciation and amortization expense

 

$

472

 

 

 

 

 

$

472

 

 

 

 

MACY’S, INC.

 

Consolidated Balance Sheets (Unaudited) (Note 1)

(millions)

 

 

 

August 1,
2020

 

February 1,
2020

 

August 3,
2019

ASSETS:

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,395

 

 

$

685

 

 

$

674

 

Receivables

 

184

 

 

409

 

 

240

 

Merchandise inventories

 

3,582

 

 

5,188

 

 

5,029

 

Prepaid expenses and other current assets

 

470

 

 

528

 

 

603

 

Total Current Assets

 

5,631

 

 

6,810

 

 

6,546

 

 

 

 

 

 

 

 

Property and Equipment – net

 

6,279

 

 

6,633

 

 

6,483

 

Right of Use Assets

 

3,035

 

 

2,668

 

 

2,636

 

Goodwill

 

828

 

 

3,908

 

 

3,908

 

Other Intangible Assets – net

 

438

 

 

439

 

 

440

 

Other Assets

 

1,403

 

 

714

 

 

728

 

 

 

 

 

 

 

 

Total Assets

 

$

17,614

 

 

$

21,172

 

 

$

20,741

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY:

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Short-term debt

 

$

539

 

 

$

539

 

 

$

6

 

Merchandise accounts payable

 

1,409

 

 

1,682

 

 

1,674

 

Accounts payable and accrued liabilities

 

2,906

 

 

3,448

 

 

2,739

 

Income taxes

 

 

 

81

 

 

20

 

Total Current Liabilities

 

4,854

 

 

5,750

 

 

4,439

 

 

 

 

 

 

 

 

Long-Term Debt

 

4,851

 

 

3,621

 

 

4,680

 

Long-Term Lease Liabilities

 

3,269

 

 

2,918

 

 

2,836

 

Deferred Income Taxes

 

921

 

 

1,169

 

 

1,206

 

Other Liabilities

 

1,395

 

 

1,337

 

 

1,265

 

Shareholders' Equity

 

2,324

 

 

6,377

 

 

6,315

 

 

 

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

17,614

 

 

$

21,172

 

 

$

20,741

 

MACY’S, INC.

 

Consolidated Statements of Cash Flows (Unaudited) (Notes 1 and 5)

(millions)

 

 

 

26 Weeks
Ended

 

26 Weeks
Ended

 

 

August 1,
2020

 

August 3,
2019

Cash flows from operating activities:

 

 

 

 

Net income (loss)

 

$

(4,012

)

 

 

$

223

 

 

Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:

 

 

 

 

Impairment, restructuring and other costs

 

3,426

 

 

 

3

 

 

Settlement charges

 

38

 

 

 

 

 

Depreciation and amortization

 

472

 

 

 

472

 

 

Benefit plans

 

23

 

 

 

15

 

 

Stock-based compensation expense

 

13

 

 

 

28

 

 

Gains on sale of real estate

 

(16

)

 

 

(49

)

 

Deferred income taxes

 

(265

)

 

 

17

 

 

Amortization of financing costs and premium on acquired debt

 

4

 

 

 

1

 

 

Changes in assets and liabilities:

 

 

 

 

Decrease in receivables

 

222

 

 

 

160

 

 

Decrease in merchandise inventories

 

1,598

 

 

 

234

 

 

Decrease in prepaid expenses and other current assets

 

31

 

 

 

19

 

 

Increase (decrease) in merchandise accounts payable

 

(188

)

 

 

55

 

 

Decrease in accounts payable and accrued liabilities

 

(605

)

 

 

(619

)

 

Decrease in current income taxes

 

(695

)

 

 

(149

)

 

Change in other assets and liabilities

 

(53

)

 

 

(60

)

 

Net cash provided (used) by operating activities

 

(7

)

 

 

350

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchase of property and equipment

 

(228

)

 

 

(378

)

 

Capitalized software

 

(61

)

 

 

(123

)

 

Disposition of property and equipment

 

31

 

 

 

59

 

 

Other, net

 

(14

)

 

 

(12

)

 

Net cash used by investing activities

 

(272

)

 

 

(454

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Debt issued

 

2,780

 

 

 

 

 

Debt issuance costs

 

(98

)

 

 

(3

)

 

Debt repaid

 

(1,504

)

 

 

(39

)

 

Dividends paid

 

(117

)

 

 

(233

)

 

Decrease in outstanding checks

 

(111

)

 

 

(128

)

 

Issuance of common stock

 

 

 

 

6

 

 

Net cash provided (used) by financing activities

 

950

 

 

 

(397

)

 

 

 

 

 

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

671

 

 

 

(501

)

 

Cash, cash equivalents and restricted cash beginning of period

 

731

 

 

 

1,248

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash end of period

 

$

1,402

 

 

 

$

747

 

 

MACY’S, INC.

 

Consolidated Financial Statements (Unaudited)

Notes:

 

(1)

As a result of the seasonal nature of the retail business, the results of operations for the 13 and 26 weeks ended August 1, 2020 and August 3, 2019 (which do not include the Christmas season) are not necessarily indicative of such results for the fiscal year.

 

(2)

The 13 weeks ended August 1, 2020 include cash restructuring charges totaling $169 million primarily associated with the previously announced reduction in force due to the impact of COVID-19.

 

The 26 weeks ended August 1, 2020 also include non-cash impairment charges totaling $3.2 billion, which consist of a $3.1 billion goodwill impairment charge and an $80 million impairment charge on long-lived tangible and right of use assets.

 

(3)

The income tax benefits of $298 million and $874 million, or 40.9% and 17.9% of pretax loss, for the 13 and 26 weeks ended August 1, 2020 reflect a different projected benefit rate as compared to the company's federal income tax statutory rate of 21% due to the carryback of net operating losses as permitted under the CARES Act. For the 26 weeks ended August 1, 2020, the benefit of the available carryback of net operating losses was offset by the impact of the non-tax deductible component of the goodwill impairment charge and additional income tax expense associated with the deferred tax remeasurement recognized during the first quarter of 2020.

 

(4)

Gross margin is defined as net sales less cost of sales.

 

(5)

Restricted cash of $7 million and $73 million have been included with cash and cash equivalents for the 26 weeks ended August 1, 2020 and August 3, 2019, respectively.

MACY’S, INC.

Important Information Regarding Non-GAAP Financial Measures

The company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures provide users of the company's financial information with additional useful information in evaluating operating performance. Management believes that providing supplemental changes in comparable sales on an owned plus licensed basis and changes in comparable sales on an owned plus licensed basis, which includes adjusting for growth in comparable sales of departments licensed to third parties, assists in evaluating the company's ability to generate sales growth, whether through owned businesses or departments licensed to third parties, and in evaluating the impact of changes in the manner in which certain departments are operated. Earnings (loss) before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure which the company believes provides meaningful information about its operational efficiency by excluding the impact of changes in tax law and structure, debt levels and capital investment. In addition, management believes that excluding certain items from EBITDA, net income (loss) and diluted earnings (loss) per share that are not associated with the company’s core operations and that may vary substantially in frequency and magnitude from period-to-period provides useful supplemental measures that assist in evaluating the company's ability to generate earnings and to more readily compare these metrics between past and future periods.

Non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, the company's financial results prepared in accordance with GAAP. Certain of the items that may be excluded or included in non-GAAP financial measures may be significant items that could impact the company's financial position, results of operations or cash flows and should therefore be considered in assessing the company's actual and future financial condition and performance. Additionally, the amounts received by the company on account of sales of departments licensed to third parties are limited to commissions received on such sales. The methods used by the company to calculate its non-GAAP financial measures may differ significantly from methods used by other companies to compute similar measures. As a result, any non-GAAP financial measures presented herein may not be comparable to similar measures provided by other companies.

MACY’S, INC.

 

Important Information Regarding Non-GAAP Financial Measures

(All amounts in millions except percentages and per share figures)

 

Changes in Comparable Sales

 

 

 

13 Weeks Ended

 

26 Weeks Ended

 

 

August 1, 2020

 

August 1, 2020

 

 

 

 

 

Decrease in comparable sales on an owned basis (Note 6)

 

(34.7

)%

 

(40.0

)%

Comparable sales growth impact of departments licensed to third parties (Note 7)

 

(0.4

)%

 

(0.2

)%

Decrease in comparable sales on an owned plus licensed basis

 

(35.1

)%

 

(40.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

13 Weeks Ended

 

26 Weeks Ended

 

 

August 3, 2019

 

August 3, 2019

 

 

 

 

 

Increase in comparable sales on an owned basis (Note 6)

 

0.2

%

 

0.4

%

Comparable sales growth impact of departments licensed to third parties (Note 7)

 

0.1

%

 

0.1

%

Increase in comparable sales on an owned plus licensed basis

 

0.3

%

 

0.5

%

Notes:

 

 

(6)

Represents the period-to-period percentage change in net sales from stores in operation throughout the year presented and the immediately preceding year and all online sales, excluding commissions from departments licensed to third parties. Stores impacted by a natural disaster or undergoing significant expansion or shrinkage remain in the comparable sales calculation unless the store, or material portion of the store, is closed for a significant period of time. No stores have been excluded as a result of the COVID-19 pandemic. Definitions and calculations of comparable sales may differ among companies in the retail industry.

 

 

(7)

Represents the impact of including the sales of departments licensed to third parties occurring in stores in operation throughout the year presented and the immediately preceding year and all online sales in the calculation of comparable sales. The company licenses third parties to operate certain departments in its stores and online and receives commissions from these third parties based on a percentage of their net sales. In its financial statements prepared in conformity with GAAP, the company includes these commissions (rather than sales of the departments licensed to third parties) in its net sales. The company does not, however, include any amounts in respect of licensed department sales (or any commissions earned on such sales) in its comparable sales in accordance with GAAP (i.e., on an owned basis). The amounts of commissions earned on sales of departments licensed to third parties are not material to its net sales for the periods presented.

MACY’S, INC.

Important Information Regarding Non-GAAP Financial Measures
(All amounts in millions except percentages and per share figures)

Earnings (Loss) before Interest, Taxes, Depreciation and Amortization, Net Income (Loss) and Diluted Earnings (Loss) Per Share, Excluding Certain Items

Non-GAAP financial measures, excluding certain items below, are reconciled to the most directly comparable GAAP measure as follows:

  • EBITDA and adjusted EBITDA are reconciled to GAAP net income (loss).
  • Adjusted net income (loss) is reconciled to GAAP net income (loss).
  • Adjusted diluted earnings (loss) per share is reconciled to GAAP diluted earnings (loss) per share.

EBITDA and Adjusted EBITDA

 

 

 

13 Weeks Ended

 

13 Weeks Ended

 

 

August 1, 2020

 

August 3, 2019

 

 

 

 

 

Net income (loss)

 

$

(431

)

 

 

$

86

 

Interest expense, net

 

69

 

 

 

47

 

Financing costs

 

3

 

 

 

 

Federal, state and local income tax expense (benefit)

 

(298

)

 

 

30

 

Depreciation and amortization

 

235

 

 

 

237

 

EBITDA

 

(422

)

 

 

400

 

Restructuring, impairment and other costs

 

242

 

 

 

2

 

Settlement charges

 

38

 

 

 

 

Adjusted EBITDA

 

$

(142

)

 

 

$

402

 

 

 

26 Weeks Ended

 

26 Weeks Ended

 

 

August 1, 2020

 

August 3, 2019

 

 

 

 

 

Net income (loss)

 

$

(4,012

)

 

 

$

223

 

Interest expense, net

 

117

 

 

 

94

 

Financing costs

 

3

 

 

 

 

Federal, state and local income tax expense (benefit)

 

(874

)

 

 

57

 

Depreciation and amortization

 

472

 

 

 

472

 

EBITDA

 

(4,294

)

 

 

846

 

Impairment, restructuring and other costs

 

3,426

 

 

 

3

 

Settlement charges

 

38

 

 

 

 

Adjusted EBITDA

 

$

(830

)

 

 

$

849

 

MACY’S, INC.

 

Important Information Regarding Non-GAAP Financial Measures

(All amounts in millions except percentages and per share figures)

 

Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share

 

 

 

13 Weeks Ended

 

13 Weeks Ended

 

 

August 1, 2020

 

August 3, 2019

 

 

 

 

 

 

 

 

 

 

 

Net Income
(Loss)

 

Diluted
Earnings
(Loss) Per
Share

 

Net
Income

 

Diluted
Earnings
Per Share

As reported

 

$

(431

)

 

 

$

(1.39

)

 

 

$

86

 

 

$

0.28

 

Restructuring, impairment and other costs (Note 8)

 

242

 

 

 

0.78

 

 

 

2

 

 

 

Settlement charges

 

38

 

 

 

0.12

 

 

 

 

 

 

Financing costs

 

3

 

 

 

0.01

 

 

 

 

 

 

Income tax impact of certain items identified above

 

(103

)

 

 

(0.33

)

 

 

 

 

 

As adjusted

 

$

(251

)

 

 

$

(0.81

)

 

 

$

88

 

 

$

0.28

 

 

 

26 Weeks Ended

 

26 Weeks Ended

 

 

August 1, 2020

 

August 3, 2019

 

 

 

 

 

 

 

 

 

 

 

Net Income
(Loss)

 

Diluted
Earnings
(Loss) Per
Share

 

Net
Income

 

Diluted
Earnings
Per Share

As reported

 

$

(4,012

)

 

 

$

(12.91

)

 

 

$

223

 

 

 

$

0.71

 

Impairment, restructuring and other costs

 

3,426

 

 

 

11.02

 

 

 

3

 

 

 

0.01

 

Settlement charges

 

38

 

 

 

0.12

 

 

 

 

 

 

 

Financing costs

 

3

 

 

 

0.01

 

 

 

 

 

 

 

Income tax impact of certain items identified above (Note 8)

 

(336

)

 

 

(1.07

)

 

 

(1

)

 

 

 

As adjusted

 

$

(881

)

 

 

$

(2.83

)

 

 

$

225

 

 

 

$

0.72

 

Note 8: The impact during the 13 and 26 weeks ended August 3, 2019 represents a value less than zero for net income or $0.01 per diluted share.

 

Media
media@macys.com

Investors - Mike McGuire
investors@macys.com

Source: Macy’s, Inc.