M
$15.30
Macy's
($.42)
(2.67%)
Earnings Details
2nd Quarter July 2019
Wednesday, August 14, 2019 8:00:00 AM
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Summary

Macy's Misses

Macy's (M) reported 2nd Quarter July 2019 earnings of $0.28 per share on revenue of $5.5 billion. The consensus earnings estimate was $0.45 per share on revenue of $5.6 billion. The Earnings Whisper number was $0.45 per share. Revenue fell 0.5% compared to the same quarter a year ago.

The company said it expects fiscal year earnings of $2.85 to $3.05 per share. The company's previous guidance was earnings of $3.05 to $3.25 per share and the current consensus earnings estimate is $3.11 per share for the year ending January 31, 2020.

Macy' Inc is an omnichannel retailer. It sells merchandise, including men', women' and children' apparel and accessories, cosmetics, home furnishings and other consumer goods.

Results
Reported Earnings
$0.28
Earnings Whisper
$0.45
Consensus Estimate
$0.45
Reported Revenue
$5.55 Bil
Revenue Estimate
$5.63 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Macy’s, Inc. Reports Second Quarter 2019 Earnings

  • 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

CINCINNATI--(BUSINESS WIRE)--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.

Updated Guidance

Macy's, Inc. is reaffirming its previously provided annual sales guidance for 2019. Based primarily on its second quarter of 2019 performance, the company is lowering its guidance for Diluted EPS, excluding settlement charges, impairment and other costs, by 20 cents.

 

Revised 2019 Annual Guidance

Original 2019 Annual Guidance 

Comparable sales

(owned plus licensed)

Flat to up 1%

Flat to up 1%

Comparable sales

(owned)

Flat to up 1%

Flat to up 1%

Net sales

Approximately flat

Approximately flat

Adjusted Diluted earnings per share

$2.85 to $3.05

$3.05 to $3.25

Asset sale gains

Approximately $100 million (or $0.25 per share)

Approximately $100 million (or $0.25 per share)

Annual tax rate

23%

23%

Macy’s, Inc.’s revised Adjusted Diluted EPS guidance does not reflect the fourth tranche of tariffs on goods from China. In light of the announcement by the United States Trade Representative on August 13, 2019, the company is evaluating the details of these tariffs and is actively working with its vendor partners and suppliers in China to help mitigate potential impact.

About Macy's, Inc.

Macy’s, Inc. is one of the nation’s premier retailers, with fiscal 2018 sales of $24.971 billion and approximately 130,000 employees. The company operates approximately 680 department stores under the nameplates Macy’s and Bloomingdale’s, and approximately 190 specialty stores that include Bloomingdale’s The Outlet, Bluemercury, and Macy’s Backstage. Macy’s, Inc. operates stores in 43 states, the District of Columbia, Guam and Puerto Rico, as well as macys.com, bloomingdales.com and bluemercury.com. Bloomingdale’s stores in Dubai and Kuwait are operated by Al Tayer Group LLC under license agreements. Macy’s, Inc. has corporate headquarters in Cincinnati, Ohio, and New York, New York.

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 conditions to, or changes in the timing of, proposed real estate and other transactions, prevailing interest rates and non-recurring charges, the effect of federal tax reform and potential changes to trade policies, store closings, competitive pressures from specialty stores, general merchandise stores, off-price and discount stores, manufacturers’ outlets, the Internet, mail-order catalogs and television shopping and general consumer spending levels, including the impact of the availability and level of consumer debt, the effect of weather and other factors identified in documents filed by the company with the Securities and Exchange Commission. 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.

NOTE: Additional information on Macy’s, Inc., including past news releases, is available at www.macysinc.com/pressroom. A webcast of Macy's, Inc.’s call with analysts and investors will be held today (August 14, 2019) at 9:30 a.m. ET. The webcast, along with the associated presentation, is accessible to the media and general public via the company's website at www.macysinc.com. Analysts and investors may call in on 1-888-254-3590, passcode 7241409. 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.

Macy's, Inc. will report results for the third quarter 2019 on Thursday, November 21, 2019. Moving forward, the company will hold its call with analysts and investors at 8:00 a.m. ET.

Macy's, Inc. is scheduled to present at the Goldman Sachs Annual Global Retailing Conference at 8:05 a.m. ET on Thursday, September 5, 2019, in New York City. Media and investors may access a live audio webcast of the presentation at www.macysinc.com on September 5, 2019. A replay of the webcast will be available on the company’s website.

MACY’S, INC.
Consolidated Statements of Income (Unaudited) (Note 1 and Note 2)
(All amounts in millions except percentages and per share figures)

 

 

13 Weeks Ended

 

13 Weeks Ended

 

 

August 3, 2019

 

August 4, 2018

 

 

$

 

% to
Net sales

 

$

 

% to
Net sales

 

 

 

 

 

 

 

 

 

Net sales

 

$

5,546

 

 

 

 

$

5,572

 

 

 

 

 

 

 

 

 

 

 

 

Credit card revenues, net

 

176

 

 

3.2

%

 

186

 

 

3.3

%

 

 

 

 

 

 

 

 

 

Cost of sales

 

(3,395

)

 

(61.2

%)

 

(3,320

)

 

(59.6

%)

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

(2,177

)

 

(39.3

%)

 

(2,164

)

 

(38.8

%)

 

 

 

 

 

 

 

 

 

Gains on sale of real estate

 

7

 

 

0.1

%

 

46

 

 

0.8

%

 

 

 

 

 

 

 

 

 

Impairment and other costs

 

(2

)

 

%

 

(17

)

 

(0.3

%)

 

 

 

 

 

 

 

 

 

Operating income

 

155

 

 

2.8

%

 

303

 

 

5.4

%

 

 

 

 

 

 

 

 

 

Benefit plan income, net

 

8

 

 

 

 

11

 

 

 

 

 

 

 

 

 

 

 

 

Settlement charges

 

 

 

 

 

(50

)

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(47

)

 

 

 

(62

)

 

 

 

 

 

 

 

 

 

 

 

Losses on early retirement of debt

 

 

 

 

 

(5

)

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

116

 

 

 

 

197

 

 

 

 

 

 

 

 

 

 

 

 

Federal, state and local income tax expense

 

(30

)

 

 

 

(33

)

 

 

 

 

 

 

 

 

 

 

 

Net income

 

86

 

 

 

 

164

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interest

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Macy's, Inc. shareholders

 

$

86

 

 

 

 

$

166

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to

Macy's, Inc. shareholders

 

$

0.28

 

 

 

 

$

0.54

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to
Macy's, Inc. shareholders

 

$

0.28

 

 

 

 

$

0.53

 

 

 

 

 

 

 

 

 

 

 

 

Average common shares:

 

 

 

 

 

 

 

 

Basic

 

309.8

 

 

 

 

307.7

 

 

 

Diluted

 

311.6

 

 

 

 

312.0

 

 

 

 

 

 

 

 

 

 

 

 

End of period common shares outstanding

 

308.9

 

 

 

 

307.0

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Financial Measures:

 

 

 

 

 

 

 

 

Gross Margin (Note 3)

 

$

2,151

 

 

38.8

%

 

$

2,252

 

 

40.4

%

Depreciation and amortization expense

 

$

237

 

 

 

 

$

235

 

 

 

 

MACY’S, INC.
Consolidated Statements of Income (Unaudited) (Note 1 and Note 2)
(All amounts in millions except percentages and per share figures)

 

 

26 weeks ended

 

26 weeks ended

 

 

August 3, 2019

 

August 4, 2018

 

 

$

 

% to
Net sales

 

$

 

% to
Net sales

 

 

 

 

 

 

 

 

 

Net sales

 

$

11,050

 

 

 

 

$

11,112

 

 

 

 

 

 

 

 

 

 

 

 

Credit card revenues, net

 

348

 

 

3.1

%

 

343

 

 

3.1

%

 

 

 

 

 

 

 

 

 

Cost of sales

 

(6,798

)

 

(61.5

%)

 

(6,701

)

 

(60.3

%)

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

(4,287

)

 

(38.8

%)

 

(4,247

)

 

(38.2

%)

 

 

 

 

 

 

 

 

 

Gains on sale of real estate

 

49

 

 

0.4

%

 

70

 

 

0.6

%

 

 

 

 

 

 

 

 

 

Impairment and other costs

 

(3

)

 

%

 

(36

)

 

(0.3

%)

 

 

 

 

 

 

 

 

 

Operating income

 

359

 

 

3.2

%

 

541

 

 

4.9

%

 

 

 

 

 

 

 

 

 

Benefit plan income, net

 

15

 

 

 

 

22

 

 

 

 

 

 

 

 

 

 

 

 

Settlement charges

 

 

 

 

 

(50

)

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(94

)

 

 

 

(128

)

 

 

 

 

 

 

 

 

 

 

 

Losses on early retirement of debt

 

 

 

 

 

(5

)

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

280

 

 

 

 

380

 

 

 

 

 

 

 

 

 

 

 

 

Federal, state and local income tax expense

 

(57

)

 

 

 

(84

)

 

 

 

 

 

 

 

 

 

 

 

Net income

 

223

 

 

 

 

296

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interest

 

 

 

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Macy's, Inc. shareholders

 

$

223

 

 

 

 

$

306

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to

Macy's, Inc. shareholders

 

$

0.72

 

 

 

 

$

0.99

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to
Macy's, Inc. shareholders

 

$

0.71

 

 

 

 

$

0.98

 

 

 

 

 

 

 

 

 

 

 

 

Average common shares:

 

 

 

 

 

 

 

 

Basic

 

309.5

 

 

 

 

307.1

 

 

 

Diluted

 

311.5

 

 

 

 

310.7

 

 

 

 

 

 

 

 

 

 

 

 

End of period common shares outstanding

 

308.9

 

 

 

 

307.0

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Financial Measures:

 

 

 

 

 

 

 

 

Gross Margin (Note 3)

 

$

4,252

 

 

38.5

%

 

$

4,411

 

 

39.7

%

Depreciation and amortization expense

 

$

472

 

 

 

 

$

470

 

 

 

 

MACY’S, INC.
Consolidated Balance Sheets (Unaudited) (Note 2)
(millions)

 

 

August 3,
2019

 

February 2,
2019

 

August 4,
2018

ASSETS:

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

674

 

 

$

1,162

 

 

$

1,068

 

Receivables

 

240

 

 

400

 

 

261

 

Merchandise inventories

 

5,029

 

 

5,263

 

 

4,956

 

Prepaid expenses and other current assets

 

603

 

 

620

 

 

580

 

Total Current Assets

 

6,546

 

 

7,445

 

 

6,865

 

 

 

 

 

 

 

 

Property and Equipment – net

 

6,483

 

 

6,637

 

 

6,547

 

Right of Use Assets

 

2,636

 

 

 

 

 

Goodwill

 

3,908

 

 

3,908

 

 

3,908

 

Other Intangible Assets – net

 

440

 

 

478

 

 

483

 

Other Assets

 

728

 

 

726

 

 

865

 

 

 

 

 

 

 

 

Total Assets

 

$

20,741

 

 

$

19,194

 

 

$

18,668

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY:

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Short-term debt

 

$

6

 

 

$

43

 

 

$

63

 

Merchandise accounts payable

 

1,674

 

 

1,655

 

 

1,795

 

Accounts payable and accrued liabilities

 

2,739

 

 

3,366

 

 

2,608

 

Income taxes

 

20

 

 

168

 

 

15

 

Total Current Liabilities

 

4,439

 

 

5,232

 

 

4,481

 

 

 

 

 

 

 

 

Long-Term Debt

 

4,680

 

 

4,708

 

 

5,473

 

Long-Term Lease Liabilities

 

2,836

 

 

 

 

 

Deferred Income Taxes

 

1,206

 

 

1,238

 

 

1,194

 

Other Liabilities

 

1,265

 

 

1,580

 

 

1,626

 

Shareholders' Equity:

 

 

 

 

 

 

Macy's, Inc.

 

6,315

 

 

6,436

 

 

5,916

 

Noncontrolling interest

 

 

 

 

 

(22

)

Total Shareholders' Equity

 

6,315

 

 

6,436

 

 

5,894

 

 

 

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

20,741

 

 

$

19,194

 

 

$

18,668

 

 

MACY’S, INC.
Consolidated Statements of Cash Flows (Unaudited) (Note 2 and Note 4)
(millions)

 

 

26 Weeks
Ended

 

26 Weeks
Ended

 

 

August 3,
2019

 

August 4,
2018

Cash flows from operating activities:

 

 

 

 

Net income

 

$

223

 

 

$

296

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Impairment and other costs

 

3

 

 

36

 

Settlement charges

 

 

 

50

 

Depreciation and amortization

 

472

 

 

470

 

Stock-based compensation expense

 

28

 

 

31

 

Gains on sale of real estate

 

(49

)

 

(70

)

Deferred income taxes

 

17

 

 

36

 

Benefit plans

 

15

 

 

18

 

Amortization of financing costs and premium on acquired debt

 

1

 

 

(5

)

Changes in assets and liabilities:

 

 

 

 

Decrease in receivables

 

160

 

 

88

 

Decrease in merchandise inventories

 

234

 

 

221

 

Decrease in prepaid expenses and other current assets

 

19

 

 

29

 

Increase in merchandise accounts payable

 

55

 

 

219

 

Decrease in accounts payable and accrued liabilities

 

(619

)

 

(510

)

Decrease in current income taxes

 

(149

)

 

(271

)

Change in other assets and liabilities

 

(60

)

 

(94

)

Net cash provided by operating activities

 

350

 

 

544

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchase of property and equipment

 

(378

)

 

(275

)

Capitalized software

 

(123

)

 

(133

)

Disposition of property and equipment

 

59

 

 

88

 

Other, net

 

(12

)

 

8

 

Net cash used by investing activities

 

(454

)

 

(312

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Debt issuance costs

 

(3

)

 

 

Debt repaid

 

(39

)

 

(357

)

Dividends paid

 

(233

)

 

(232

)

Decrease in outstanding checks

 

(128

)

 

(90

)

Issuance of common stock

 

6

 

 

38

 

Proceeds from noncontrolling interest

 

 

 

5

 

Net cash used by financing activities

 

(397

)

 

(636

)

 

 

 

 

 

Net decrease in cash, cash equivalents and restricted cash

 

(501

)

 

(404

)

Cash, cash equivalents and restricted cash beginning of period

 

1,248

 

 

1,513

 

 

 

 

 

 

Cash, cash equivalents and restricted cash end of period

 

$

747

 

 

$

1,109

 

 

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 3, 2019 and August 4, 2018 (which do not include the Christmas season) are not necessarily indicative of such results for the fiscal year.

 

 

(2)

 The results for the 13 and 26 weeks ended August 3, 2019 reflect the adoption of Accounting Standards Update 2016-02 (ASU 2016-02), Leases, on February 3, 2019, utilizing the modified retrospective approach which allowed for transition in the period of adoption.

 

 

(3)

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

 

 

(4)

 Restricted cash of $73 million and $41 million have been included with cash and cash equivalents for the 26 weeks ended August 3, 2019 and August 4, 2018, respectively.  Further, reclassifications were made to certain prior period's amounts to conform with the classifications of such amounts in the most recent period.
   

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 adjusted for the 53rd week calendar shift, which include 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 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 attributable to Macy's, Inc. shareholders 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 reconciliation of the forward-looking non-GAAP financial measure of changes in comparable sales on an owned plus licensed basis to GAAP comparable sales (i.e., on an owned basis) is in the same manner as illustrated below, except that the impact of growth in comparable sales of departments licensed to third parties is the only reconciling item. In addition, the company does not provide the most directly comparable forward-looking GAAP measure of diluted earnings per share attributable to Macy’s, Inc. shareholders excluding certain items because the timing and amount of excluded items are unreasonably difficult to fully and accurately estimate.

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
August 3, 2019

 

26 Weeks Ended
August 3, 2019

 

 

 

 

 

Increase in comparable sales on an owned basis (Note 5)

 

0.2

%

 

0.4

%

 

 

 

 

 

Comparable sales growth impact of departments licensed to third parties (Note 6)

 

0.1

%

 

0.1

%

 

 

 

 

 

Increase in comparable sales on an owned plus licensed basis

 

0.3

%

 

0.5

%

 

 

13 Weeks Ended
August 4, 2018

 

26 Weeks Ended
August 4, 2018

 

 

 

 

 

Increase in comparable sales on an owned basis (Note 5)

 

0.0

%

 

1.9

%

 

 

 

 

 

Comparable sales growth impact of departments licensed to third parties (Note 6)

 

0.5

%

 

0.4

%

 

 

 

 

 

Increase in comparable sales on an owned plus licensed basis

 

0.5

%

 

2.3

%

 

 

 

 

 

Impact of 53rd Week Shifted Calendar

 

1.8

%

 

(0.5

)%

 

 

 

 

 

53rd Week Shifted Calendar comparable sales on an owned plus licensed basis (Note 7)

 

2.3

%

 

1.8

%

Notes:

(5) 

 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. Definitions and calculations of comparable sales may differ among companies in the retail industry.

 

 

(6) 

 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.

 

 

(7)

 Represents comparable sales on an owned plus licensed basis that incorporates a shift of the company's fiscal 2017 calendar to align with fiscal 2018 on a like-for-like basis as a result of the 53rd week in fiscal 2017.
  

MACY’S, INC.
Important Information Regarding Non-GAAP Financial Measures

Earnings before Interest, Taxes, Depreciation and Amortization, Net Income and Diluted Earnings Per Share Attributable to Macy's, Inc. Shareholders, 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 attributable to Macy’s, Inc. shareholders.
  • Adjusted net income attributable to Macy’s, Inc. shareholders is reconciled to GAAP net income attributable to Macy’s, Inc. shareholders.
  • Adjusted diluted earnings per share attributable to Macy’s, Inc. shareholders is reconciled to GAAP diluted earnings per share attributable to Macy’s, Inc.

Adjusted EBITDA

 

 

 

13 Weeks Ended

 

13 Weeks Ended

 

 

August 3, 2019

 

August 4, 2018

 

 

 

 

 

Net income attributable to Macy's, Inc. shareholders

 

$

86

 

 

$

166

 

Interest expense, net

 

47

 

 

62

 

Losses on early retirement of debt

 

 

 

5

 

Federal, state and local income tax expense

 

30

 

 

33

 

Depreciation and amortization

 

237

 

 

235

 

EBITDA

 

400

 

 

501

 

Impairment and other costs (Note 8)

 

2

 

 

15

 

Settlement charges

 

 

 

50

 

Adjusted EBITDA

 

$

402

 

 

$

566

 

 

 

26 Weeks Ended

 

26 Weeks Ended

 

 

August 3, 2019

 

August 4, 2018

 

 

 

 

 

Net income attributable to Macy's, Inc. shareholders

 

$

223

 

 

$

306

 

Interest expense, net

 

94

 

 

128

 

Losses on early retirement of debt

 

 

 

5

 

Federal, state and local income tax expense

 

57

 

 

84

 

Depreciation and amortization

 

472

 

 

470

 

EBITDA

 

846

 

 

993

 

Impairment and other costs (Note 8)

 

3

 

 

28

 

Settlement charges

 

 

 

50

 

Adjusted EBITDA

 

$

849

 

 

$

1,071

 

Note 8: The above pre-tax adjustments for the 13 and 26 weeks ended August 4, 2018 exclude impairment and other costs attributable to the noncontrolling interest shareholder of $2 million and $8 million, respectively.

MACY’S, INC.
Important Information Regarding Non-GAAP Financial Measures

Adjusted Net Income and Adjusted Diluted Earnings Per Share Attributable to Macy's, Inc. Shareholders

 

 

 

13 Weeks Ended

 

13 Weeks Ended

 

 

August 3, 2019

 

August 4, 2018

 

 

 

 

 

 

 

 

 

 

 

Net Income
Attributable to
Macy's, Inc.
Shareholders

 

Diluted
Earnings
Per Share

 

Net Income
Attributable to
Macy's, Inc.
Shareholders

 

Diluted
Earnings
Per Share

As reported

 

$

86

 

 

$

0.28

 

 

$

166

 

 

$

0.53

 

Impairment and other costs (Note 9)

 

2

 

 

 

 

15

 

 

0.05

 

Settlement charges

 

 

 

 

 

50

 

 

0.16

 

Losses on early retirement of debt

 

 

 

 

 

5

 

 

0.02

 

Income tax impact of certain items identified above (Note 10)

 

 

 

 

 

(17

)

 

(0.06

)

As adjusted

 

$

88

 

 

$

0.28

 

 

$

219

 

 

$

0.70

 

 

 

26 Weeks Ended

 

26 Weeks Ended

 

 

August 3, 2019

 

August 4, 2018

 

 

 

 

 

 

 

 

 

 

 

Net Income
Attributable to
Macy's, Inc.
Shareholders

 

Diluted
Earnings
Per Share

 

Net Income
Attributable to
Macy's, Inc.
Shareholders

 

Diluted
Earnings
Per Share

As reported

 

$

223

 

 

$

0.71

 

 

$

306

 

 

$

0.98

 

Impairment and other costs (Note 9)

 

3

 

 

0.01

 

 

28

 

 

0.09

 

Settlement charges

 

 

 

 

 

50

 

 

0.16

 

Losses on early retirement of debt

 

 

 

 

 

5

 

 

0.02

 

Income tax impact of certain items identified above (Note 10)

 

(1

)

 

 

 

(20

)

 

(0.06

)

As adjusted

 

$

225

 

 

$

0.72

 

 

$

369

 

 

$

1.19

 

Note 9: The above pre-tax adjustments for the 13 and 26 weeks ended August 4, 2018 exclude impairment and other costs attributable to the noncontrolling interest shareholder of $2 million and $8 million, respectively.

Note 10: The impact during the 13 and 26 weeks ended August 3, 2019 represents a value less than zero for net income attributable to Macy's, Inc. shareholders or $0.01 per diluted share attributable to Macy's, Inc. shareholders.

Media – Blair Fasbender Rosenberg
646-429-6032
media@macys.com

Investors – Mike McGuire
513-579-7780
investors@macys.com

Source: Macy’s, Inc.