Market Overview

Macy's, Inc. Reports Second Quarter 2019 Earnings

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  • Comparable sales growth of 0.2% on an owned basis; 0.3% on an owned plus licensed basis
  • Diluted EPS and Adjusted Diluted EPS of $0.28
  • Strategic initiatives on track to continue delivering sales growth in the back half of the year
  • Fall inventory in line with anticipated customer demand
  • Company reaffirmed annual sales guidance and lowered EPS guidance

Macy's, Inc. (NYSE:M) today reported results for the second quarter 2019. The company reaffirmed its annual sales guidance and lowered its EPS guidance for fiscal 2019.

Financial Highlights

 

Second Quarter

First Half

(in millions)

2019

2018

2019

2018

Net sales

$

5,546

 

$

5,572

 

$

11,050

 

$

11,112

 

Comparable sales

Owned

0.2

%

0.0

%

0.4

%

1.9

%

Owned plus licensed

0.3

%

0.5

%

0.5

%

2.3

%

53rd week shifted calendar (owned plus licensed)*

 

2.3

%

 

1.8

%

 

Net income attributable to Macy's, Inc. shareholders

$

86

 

$

166

 

$

223

 

$

306

 

Earnings before interest, taxes, depreciation and amortization

$

400

 

$

501

 

$

846

 

$

993

 

Diluted earnings per share

$

0.28

 

$

0.53

 

$

0.71

 

$

0.98

 

 

Adjusted Net income attributable to Macy's, Inc. shareholders

$

88

 

$

219

 

$

225

 

$

369

 

Adjusted Earnings before interest, taxes, depreciation and amortization

$

402

 

$

566

 

$

849

 

$

1,071

 

Adjusted Diluted earnings per share

$

0.28

 

$

0.70

 

$

0.72

 

$

1.19

 

*Comparable sales adjusted for the impact of the 53rd week reflect a shift of the company's 2017 calendar to align with 2018 on a like-for-like basis.

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.

"Macy's, Inc. delivered another quarter of comparable sales growth. That said, we had a slow start to the quarter and finished below our expectations. Rising inventory levels became a challenge based on a combination of factors: a fashion miss in our key women's sportswear private brands, slow sell-through of warm weather apparel and the accelerated decline in international tourism. We took markdowns to clear the excess Spring inventory and are entering the Fall season with the right inventory to meet anticipated customer demand," said Jeff Gennette, Macy's, Inc. chairman & chief executive officer. "While we had seasonal inventory challenges in Spring, there are many areas of the business that are performing well, notably our Destination Businesses. We continue to see healthier sales within our brick and mortar business, led by our Growth50 stores and Backstage expansion. Our digital business posted its fortieth consecutive quarter of double-digit growth, and mobile remained our fastest growing channel."

"Our 2019 strategic initiatives are on track to contribute to sales growth in the back half of the year, and we have plans to drive productivity and improve gross margins," Gennette added. "Our team has responded quickly to the external environment, course corrected when needed and we remain confident. Our 130,000 colleagues compete every day to win our customers' business."

Asset Sale Gains

Asset sale gains for the second quarter of 2019 totaled $7 million pre-tax, or $5 million after-tax and $0.01 per diluted share attributable to Macy's, Inc. shareholders. This compares to the second quarter of 2018, when asset sale gains totaled $46 million pre-tax, or $34 million after-tax and $0.11 per diluted share attributable to Macy's, Inc. shareholders.

Asset sale gains for the first half of 2019 totaled $49 million pre-tax, or $36 million after-tax and $0.11 per diluted share attributable to Macy's, Inc. shareholders. This compares to the first half of 2018, when asset sale gains totaled $70 million pre-tax, or $53 million after-tax and $0.17 per diluted share attributable to Macy's, Inc. shareholders.

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