Macy’s first quarter report of 2020 was out yesterday (1 July) and expectedly it’s been a disappointment.
The first quarter net sales have fallen to US $ 3 billion from US $ 5.5 billion recorded in the first quarter of the previous year. That’s coming down by half.
The quarterly net loss has been US $ 3.6 billion or US $ 11.53 per share, compared to net income of US $ 136 million last year.
The gross margin too fell to US $ 516 million (17.1 per cent of sales) from US $ 2.1 billion (38 per cent of sales) in 2019.
Here it is important to note that post pandemic widespread and subsequent shutdown of its stores, Macy’s took a US $ 3.2 billion non-cash impairment charge and US $ 3.1 billion non-cash goodwill charge.
The world is still gripping with the deadly virus and it is not going to end anytime soon; however Jeff Gennette, CEO, Macy’s said that another shutdown of retail stores is highly unlikely.
Though the stores reopened to a decent response last month, yet the pace is slow. Substantiating further Jeff said that the new guidelines recently instituted at Georgia and Texas has yet again resulted in slump in footfall.
Macy’s, reportedly, also said that it will continue to focus on e-commerce despite the online sales not making up for its lost bricks-and-mortar sales. In fact quite a few consumers, according to UBS analysts, are buying directly from brands via Amazon or Shopify.
Besides apparels, Macy’s also offers footwear, accessories and furniture, among others. It generates revenue of US $ 24.97 billion.