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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Macys Inc | NYSE:M | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.47 | 2.46% | 19.59 | 19.61 | 19.125 | 19.44 | 4,302,393 | 01:00:00 |
Comparable sales up 12.8% on an owned basis and up 12.4% on an owned-plus-licensed basis
Diluted EPS of $0.98 and Adjusted diluted EPS of $1.08
Increased financial flexibility through a number of financing transactions
Repurchased $600 million of shares under $2 billion share repurchase program
Reaffirmed annual sales guidance and raised Adjusted diluted EPS guidance
Macy’s, Inc. (NYSE: M) today reported financial results for the first quarter of 2022 and updated its annual guidance.
“Our company delivered solid results in the first quarter despite a challenging operating environment. We delivered strong earnings, beating our estimates, and sales that were in line with our expectations. While macroeconomic pressures on consumer spending increased during the quarter, our customers continued to shop. We saw a notable shift back to occasion-based apparel and in-store shopping, as well as continued strength in sales of luxury goods. Our omnichannel ecosystem, which spans the value spectrum, has supported our ability to flex our wide assortment of categories, products and brands to capture consumer demand despite the volatile environment,” said Jeff Gennette, chairman and chief executive officer of Macy’s, Inc. “As we look ahead to the rest of 2022, we remain focused on our customers and the successful execution of our Polaris long-term growth strategy. We believe that the efficiencies we built into our business enable us to navigate through the current uncertain macro environment.”
First Quarter Highlights
Comparisons are to first quarter 2021 unless noted otherwise. Comparisons to 2019 are provided, where appropriate, to benchmark performance given the impact of the pandemic in 2020.
Financial Highlights
All amounts in millions except percentages and per share figures
First Quarter
2022
2021
Net sales
$5,348
$4,706
Comparable Sales
Owned
12.8%
Owned plus licensed
12.4%
Net Income
$286
$103
Earnings before interest, taxes, depreciation and amortization (EBITDA)
$676
$454
Diluted earnings per share (EPS)
$0.98
$0.32
Adjusted Net income
$315
$126
Adjusted EBITDA
$684
$473
Adjusted Diluted EPS
$1.08
$0.39
Capital Allocation
During the first quarter, Macy’s, Inc. took the following actions to boost its liquidity and financial flexibility as well as return capital to shareholders:
“We believe that our first quarter performance reflects the durability of the Polaris strategy. The actions we took in the quarter to boost our liquidity and increase our financial flexibility provides us a long runway to invest further in our transformation, navigate the unprecedented macroeconomic environment and return capital to shareholders,” said Adrian Mitchell, chief financial officer of Macy’s, Inc. “As we move into the rest of this year, we have confidence in our ability to flex and pivot quickly in this dynamic environment.”
Additionally, at its last meeting, Macy’s board of directors declared a regular quarterly dividend of 15.75 cents per share on Macy’s, Inc. common stock, payable July 1, 2022, to shareholders of record at the close of business on June 15, 2022.
2022 Guidance
Despite the uncertainty within the macroeconomic environment, the company is reaffirming its annual 2022 sales guidance and raising its earnings guidance to account for first quarter 2022 share repurchases as well as improved expectations for credit card revenue. The company believes this guidance appropriately reflects its strategic positioning and the associated risks within this environment. The full update to guidance can be found in the presentation posted to macysinc.com/investors.
Guidance as of
May 26, 2022
Guidance as of
February 22, 2022
Net sales
$24,460 million to $24,700 million Flat to up 1.0% growth versus 2021
$24,460 million to $24,700 million Flat to up 1.0% growth versus 2021
Adjusted EBITDA as a percent of sales
11.2% - 11.7%
11.0% - 11.5%
Adjusted diluted earnings per share (reflecting first quarter share repurchases)
$4.53 - $4.95
$4.13 - $4.52
Conference Call and Webcasts
A webcast of Macy's, Inc.’s call with analysts and investors to report its first quarter 2022 sales and earnings will be held today (May 26, 2022) at 8:00 a.m. ET. Macy’s, Inc.’s webcast, along with the associated presentation, is accessible to the media and general public via the company's website at www.macysinc.com/investors. Analysts and investors may call in on 1-800-458-4121, passcode 8403658. 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.
The company will participate in a fireside chat at the Evercore ISI Consumer and Retail Conference at 8:00 a.m. ET on Tuesday, June 7, 2022. Media and investors may access a live audio webcast of the presentation at www.macysinc.com/investors. A replay of the webcast will also be available on the company’s website.
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.
At Macy’s, Inc. (NYSE: M), we are a trusted source for quality brands at great values from off-price to luxury. Across our iconic nameplates, including Macy’s, Bloomingdale’s and Bluemercury, we help our customers express their unique style and celebrate special moments, big and small. Headquartered in New York City, we operate one of retail’s largest e-commerce businesses integrated with a nationwide footprint to deliver the most convenient and seamless shopping experience. Our purpose is to create a brighter future with bold representation – so we can realize the full potential of every one of us. For more information, visit 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 COVID-19 pandemic 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, 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 and catalogs 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, inflation, labor shortages, the amount and timing of future dividends and share repurchases 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 January 29, 2022. 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 Income (Unaudited) (Note 1)
(All amounts in millions except percentages and per share figures)
13 Weeks Ended April 30, 2022
13 Weeks Ended May 1, 2021
% to
% to
$
Net sales
$
Net sales
Net sales
$
5,348
$
4,706
Credit card revenues, net
191
3.6
%
159
3.4
%
Cost of sales
(3,231
)
(60.4
%)
(2,889
)
(61.4
%)
Selling, general and administrative expenses
(1,879
)
(35.1
%)
(1,748
)
(37.1
%)
Gains on sale of real estate
42
0.8
%
6
0.1
%
Impairment, restructuring and other costs
(8
)
(0.1
%)
(19
)
(0.4
%)
Operating income
463
8.7
%
215
4.6
%
Benefit plan income, net
7
15
Interest expense, net
(47
)
(79
)
Losses on early retirement of debt
(31
)
(11
)
Income before income taxes
392
140
Federal, state and local income tax expense (Note 2)
(106
)
(37
)
Net income
$
286
$
103
Basic earnings per share
$
1.01
$
0.33
Diluted earnings per share
$
0.98
$
0.32
Average common shares:
Basic
283.5
311.6
Diluted
290.7
318.6
End of period common shares outstanding
269.7
311.0
Supplemental Financial Measures:
Gross Margin (Note 3)
$
2,117
39.6
%
$
1,817
38.6
%
Depreciation and amortization expense
$
206
$
224
MACY’S, INC.
Consolidated Balance Sheets (Unaudited) (Note 1)
(millions)
April 30,
2022
January 29,
2022
May 1,
2021
ASSETS:
Current Assets:
Cash and cash equivalents
$
672
$
1,712
$
1,798
Receivables
233
297
205
Merchandise inventories
4,956
4,383
4,230
Prepaid expenses and other current assets (Note 4)
372
366
1,007
Total Current Assets
6,233
6,758
7,240
Property and Equipment – net
5,601
5,665
5,798
Right of Use Assets
2,736
2,808
2,853
Goodwill
828
828
828
Other Intangible Assets – net
434
435
436
Other Assets
1,140
1,096
927
Total Assets
$
16,972
$
17,590
$
18,082
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt
$
—
$
—
$
294
Merchandise accounts payable
2,865
2,222
2,545
Accounts payable and accrued liabilities
2,456
3,086
2,616
Income taxes
222
108
63
Total Current Liabilities
5,543
5,416
5,518
Long-Term Debt
2,994
3,295
4,558
Long-Term Lease Liabilities
3,030
3,098
3,166
Deferred Income Taxes
968
983
868
Other Liabilities
1,159
1,177
1,297
Shareholders' Equity
3,278
3,621
2,675
Total Liabilities and Shareholders’ Equity
$
16,972
$
17,590
$
18,082
MACY’S, INC.
Consolidated Statements of Cash Flows (Unaudited) (Notes 1 and 5)
(millions)
13 Weeks Ended April 30, 2022
13 Weeks Ended May 1, 2021
Cash flows from operating activities:
Net income
$
286
$
103
Adjustments to reconcile net income to net cash provided by operating activities:
Impairment, restructuring and other costs
8
19
Depreciation and amortization
206
224
Benefit plans
5
10
Stock-based compensation expense
13
11
Gains on sale of real estate
(42
)
(6
)
Deferred income taxes
(17
)
(43
)
Amortization of financing costs and premium on acquired debt
2
8
Changes in assets and liabilities:
Decrease in receivables
65
71
Increase in merchandise inventories
(573
)
(457
)
Increase in prepaid expenses and other current assets
(13
)
(56
)
Increase in merchandise accounts payable
639
674
Decrease in accounts payable and accrued liabilities
(424
)
(114
)
Increase in current income taxes
122
75
Change in other assets and liabilities
(29
)
(25
)
Net cash provided by operating activities
248
494
Cash flows from investing activities:
Purchase of property and equipment
(171
)
(61
)
Capitalized software
(90
)
(38
)
Disposition of property and equipment
73
8
Other, net
(6
)
17
Net cash used by investing activities
(194
)
(74
)
Cash flows from financing activities:
Debt issued
850
500
Debt issuance costs
(21
)
(9
)
Debt repaid
(1,139
)
(503
)
Debt repurchase premium and expenses
(29
)
(12
)
Dividends paid
(45
)
—
Decrease in outstanding checks
(126
)
(276
)
Acquisition of treasury stock
(584
)
—
Net cash used by financing activities
(1,094
)
(300
)
Net increase (decrease) in cash, cash equivalents and restricted cash
(1,040
)
120
Cash, cash equivalents and restricted cash beginning of period
1,715
1,754
Cash, cash equivalents and restricted cash end of period
$
675
$
1,874
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 weeks ended April 30, 2022 and May 1, 2021 (which do not include the Christmas season) are not necessarily indicative of such results for the fiscal year.
(2)
The income tax expense of $106 million and $37 million, or 27.1% and 26.3% of pretax income, for the 13 weeks ended April 30, 2022 and May 1, 2021, respectively, reflect a different effective tax rate as compared to the company’s federal income tax statutory rate of 21%. The income tax effective rates for the 13 weeks ended April 30, 2022 and May 1, 2021 were impacted primarily by the effect of state and local taxes and the realization of deferred tax assets associated with the vesting and cancellation of certain stock-based compensation awards.
(3)
Gross margin is defined as net sales less cost of sales.
(4)
Prepaid expenses and other current assets as of May 1, 2021 included an income tax receivable of $520 million.
(5)
Restricted cash of $3 million and $76 million have been included with cash and cash equivalents for the 13 weeks ended April 30, 2022 and May 1, 2021, 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, which includes adjusting for the impact of 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 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 and diluted earnings 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.
The company does not provide reconciliations of the forward-looking non-GAAP measures of adjusted EBITDA, diluted earnings per share and comparable sales on an owned plus licensed basis to the most directly comparable forward-looking GAAP measures because the timing and amount of excluded items are unreasonably difficult to fully and accurately estimate. For the same reasons, the company is unable to address the probable significance of the unavailable information, which could be material to future results.
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
Comparable Sales vs. 13 Weeks Ended May 1, 2021
Macy's, Inc.
Macy's
Bloomingdale's
bluemercury
Increase in comparable sales on an owned basis (Note 6)
12.8
%
10.7
%
28.1
%
25.2
%
Impact of departments licensed to third parties (Note 7)
(0.4
%)
(0.6
%)
(1.2
%)
0.0
%
Increase in comparable sales on an owned plus licensed basis
12.4
%
10.1
%
26.9
%
25.2
%
Notes:(6)
Represents the period-to-period percentage change in net sales from stores in operation during the 13 weeks ended April 30, 2022 and the 13 weeks ended May 1, 2021. Such calculation includes all digital sales and excludes 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. 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)
Non-GAAP financial measures, excluding certain items below, are reconciled to the most directly comparable GAAP measure as follows:
EBITDA and Adjusted EBITDA
13 Weeks Ended April 30, 2022
13 Weeks Ended May 1, 2021
Net income
$
286
$
103
Interest expense, net
47
79
Losses on early retirement of debt
31
11
Federal, state and local income tax expense
106
37
Depreciation and amortization
206
224
EBITDA
676
454
Impairment, restructuring and other costs
8
19
Adjusted EBITDA
$
684
$
473
Adjusted Net Income and Adjusted Diluted Earnings Per Share
13 Weeks Ended April 30, 2022
13 Weeks Ended May 1, 2021
Net Income
Diluted Earnings Per Share
Net Income
Diluted Earnings Per Share
As reported
$
286
0.98
$
103
$
0.32
Impairment, restructuring and other costs
8
0.03
19
0.06
Losses on early retirement of debt
31
0.11
11
0.03
Income tax impact of certain items identified above
(10
)
(0.04
)
(7
)
(0.02
)
As adjusted to exclude certain items above
$
315
$
1.08
$
126
$
0.39
View source version on businesswire.com: https://www.businesswire.com/news/home/20220526005268/en/
Media – Carolyn Ng Cohen media@macys.com
Investors - Mike McGuire investors@macys.com
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