Macy’s lost almost $4 billion due to the pandemic

Macy’s has met the analysts’ expectations for the quarter that just ended.

If previously we talked about how FedEx exceeded expectations when releasing the financial report for the past quarter, the same cannot be said about Macy’s.

Due to the pandemic, therefore store-closure, the company had some shocking losses. Yesterday, it reported a $3.58 billion quarterly loss, or $11.53/ share, compared to last year’s profit of 44 cents per share. The net sales reduced by almost a half, to $3.02 billion. According to Refinitiv, the company met the analysts’ expectations reporting a loss per share of $2.03.

To boost sales during these difficult times, Macy's improved its online business and personalized marketing; it sold the previously unsold inventory and offered pick-up services. On the other hand, shortly before June-end, it announced that it would dismiss roughly 3,900 employees in corporate and management positions to save cash. The company is not expecting another full shutdown, but is flexible in approach and prepared to address any increases in infections, as the numbers are on the rise in Texas.

Macy's is one of the lucky ones, as several of its competitors such as J. Crew, J.C. Penney, and Neiman Marcus Group have filed for bankruptcy.

In expectance of the data, the shares rallied 1.5% in pre-market trading. After it didn’t provide any guidance for the next quarter, the stock price fell more than 3%. To this day, in 2020, Macy’s stock dropped by 59.5%, while USA500 lost 4%.

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Sources: cnbc.com, marketwatch.com, reuters.com