M
$4.81
Macy's
$.36
8.09%
Earnings Details
Quarter January 2020
Tuesday, February 25, 2020 6:55:00 AM
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Summary

Macy's Beats

Macy's (M) reported Quarter January 2020 earnings of $2.12 per share on revenue of $8.3 billion. The consensus earnings estimate was $1.95 per share on revenue of $8.3 billion. The Earnings Whisper number was $1.98 per share. Revenue fell 1.4% compared to the same quarter a year ago.

The company said it expects fiscal 2021 earnings of $2.20 to $2.40 per share on revenue of $23.60 billion to $23.90 billion. The current consensus earnings estimate is $2.45 per share on revenue of $23.79 billion for the year ending January 31, 2021.

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
$2.12
Earnings Whisper
$1.98
Consensus Estimate
$1.95
Reported Revenue
$8.34 Bil
Revenue Estimate
$8.32 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Macy’s, Inc. Reports Fourth Quarter and Fiscal 2019 Earnings and Reiterates 2020 Guidance

  • Annual comparable sales of (0.8)% on an owned basis; (0.7)% on an owned plus licensed basis
  • Annual Diluted EPS of $1.81 and Annual Adjusted Diluted EPS of $2.91
  • Strong execution of Holiday 2019 with significant trend improvement in sales from the third quarter
  • Enters 2020 with solid plan for transition year; reiterates previously provided 2020 guidance

NEW YORK--(BUSINESS WIRE)--Macy’s, Inc. (NYSE: M) today reported results for the fourth quarter and fiscal 2019 and reiterated its previously provided annual sales and earnings guidance for fiscal 2020.

Financial Highlights

 

Fourth Quarter

Full Year

(All amounts in millions except percentages and per share figures)

2019

2018

2019

2018

Net sales

$

 

8,337

 

$

 

8,455

 

$

 

24,560

 

$

 

24,971

 

Comparable sales

Owned

 

(0.6

)%

 

0.4

%

 

(0.8

)%

 

1.7

%

Owned plus licensed

 

(0.5

)%

 

0.7

%

 

(0.7

)%

 

2.0

%

53rd week shifted calendar (owned plus licensed)*

 

 

2.0

%

 

 

2.4

%

 

Net income attributable to Macy’s, Inc. shareholders

$

 

340

 

$

 

740

 

$

 

564

 

$

 

1,108

 

Earnings before interest, taxes, depreciation and amortization

$

 

777

 

$

 

1,287

 

$

 

1,924

 

$

 

2,661

 

Diluted earnings per share

$

 

1.09

 

$

 

2.37

 

$

 

1.81

 

$

 

3.56

 

 

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

$

 

661

 

$

 

850

 

$

 

906

 

$

 

1,301

 

Adjusted Earnings before interest, taxes, depreciation and
amortization

$

 

1,160

 

$

 

1,399

 

$

 

2,336

 

$

 

2,877

 

Adjusted Diluted earnings per share

$

 

2.12

 

$

 

2.73

 

$

 

2.91

 

$

 

4.18

 

*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.

 

“Taken as a whole, 2019 did not play out as we intended for Macy's, Inc. However, we executed well during the Holiday 2019 season. We were pleased with the significant trend improvement in the fourth quarter, including a meaningful sales uptick in the 10 shopping days before Christmas. Together with disciplined expense management, our solid sales results in the fourth quarter allowed us to deliver stronger-than-expected earnings results. Importantly, we exited the year with a clean inventory position,” said Jeff Gennette, chairman and chief executive officer of Macy’s, Inc.

2019 Asset Sale Gains

Asset sale gains for the fourth quarter of 2019 totaled $95 million pre-tax, or $71 million after-tax and $0.23 per diluted share attributable to Macy's, Inc. This compares to the fourth quarter of 2018, when asset sale gains totaled $278 million pre-tax, or $204 million after-tax and $0.65 per diluted share attributable to Macy's, Inc.

Asset sale gains for fiscal 2019 totaled $162 million pre-tax, or $120 million after-tax and $0.38 per diluted share attributable to Macy's, Inc. This compares to fiscal 2018, when asset sale gains totaled $389 million pre-tax, or $287 million after-tax and $0.92 per diluted share attributable to Macy's, Inc.

Polaris Strategy

On February 4, 2020, Macy’s, Inc. announced its Polaris strategy, a three-year plan designed to stabilize profitability and position the company for sustainable, profitable growth.

“We have a clear perspective of where Macy’s, Inc. and our brands - Macy’s, Bloomingdale's, and Bluemercury-- fit into American retail today. We know 2020 will be a transition year as we make significant structural changes to the business. I am confident that the Polaris strategy we shared earlier this month will allow us to stabilize margin in 2020 and position the company for healthy growth,” continued Gennette.

The five major components of the Polaris strategy are:

  • Strengthen Customer Relationships: Build customer lifetime value, expand Star Rewards loyalty program with the launch of Loyalty 3.0 in early February and accelerate personalization and monetization.
  • Curate Quality Fashion: Drive disciplined merchandise category roles, be the best destination for the best brands and balance sales and margin.
  • Accelerate Digital Growth: Enhance the digital experience across the Macy’s website and app, grow omni-channel customer base and improve profitability.
  • Optimize the Store Portfolio: Continue the Growth treatment for stores in the best malls, expand off-mall profitably, and test and prove a retail ecosystem model with a mix of Macy’s store formats within a geographic market.
  • Reset Cost Base: Right-size the organization and expense base, improve working capital and balance top-line and bottom-line growth.

The company is updating the estimated total costs related to Polaris to approximately $400 million to $420 million. In 2019, the company recognized Polaris-related costs of approximately $318 million, of which approximately $161 million were non-cash impairment charges associated with store closures and campus consolidations and $157 million were cash costs related to restructuring activities. The remaining costs to be recorded in 2020 are expected to be cash.

2020 Guidance

Macy's, Inc. is reiterating its previously provided annual guidance for 2020.

 

Fiscal 2020

Net Sales

$23.6B to $23.9B

Comparable Sales

Owned

Approximately 40 basis
points better than owned
plus licensed

Owned plus licensed

(2.5)% to (1.5)%

Adjusted diluted earnings per share

$2.45 to $2.65

Asset sale gains

Approximately $100M

Adjusted diluted earnings per share, excluding asset sale
gains

$2.20 to $2.40

Annual tax rate

23.25%

Complete guidance can be found in the presentation posted on the company’s investor relations website at www.macysinc.com/investors.

NOTE: Additional information on Macy’s, Inc., including past news releases, is available at www.macysinc.com/pressroom. The company will webcast a call with financial analysts and investors today (February 25, 2020) at 8:00 a.m. ET. Macy’s, Inc.’s webcast, along with the associated presentation, will be accessible to the media and general public via the company's website at www.macysinc.com. Analysts and investors may call in on 1-800-458-4121, passcode 5793262. A replay of the conference call and slides can be accessed on the company's website or by calling 1-888-203-1112 (same passcode) about two hours after the conclusion of the call.

Macy’s, Inc. is scheduled to present at the Bank of America Merrill Lynch Global Consumer & Retail Technology Conference at 8:00 a.m. ET on Tuesday, March 10, 2020, in New York City. Media and investors may access a live audio webcast of the presentation at www.macysinc.com/investors. A replay of the webcast will 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.

Macy’s, Inc. (NYSE: M) is one of the nation’s premier omni-channel fashion retailers, with fiscal 2019 sales of $24.6 billion. The company comprises three retail brands, Macy’s, Bloomingdale’s and Bluemercury. Macy’s, Inc. is headquartered in New York, New York. For more information, please visit www.macysinc.com.

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 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, catalogs and television shopping 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 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.

MACY’S, INC.

Consolidated Statements of Income (Unaudited) (Note 1)

(All amounts in millions except percentages and per share figures)

 

 

 

13 Weeks Ended

 

13 Weeks Ended

 

 

February 1, 2020

 

February 2, 2019

 

 

$

 

% to
Net sales

 

$

 

% to
Net sales

 

 

 

 

 

 

 

 

 

Net sales

 

$

8,337

 

 

 

 

$

8,455

 

 

 

 

 

 

 

 

 

 

 

 

Credit card revenues, net

 

239

 

 

2.9

%

 

240

 

 

2.8

%

 

 

 

 

 

 

 

 

 

Cost of sales

 

(5,266

)

 

(63.2

%)

 

(5,288

)

 

(62.5

%)

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

(2,509

)

 

(30.1

%)

 

(2,538

)

 

(30.0

%)

 

 

 

 

 

 

 

 

 

Gains on sale of real estate

 

95

 

 

1.1

%

 

278

 

 

3.2

%

 

 

 

 

 

 

 

 

 

Restructuring, impairment, store closings and other costs

 

(337

)

 

(4.0

%)

 

(97

)

 

(1.1

%)

 

 

 

 

 

 

 

 

 

Operating income

 

559

 

 

6.7

%

 

1,050

 

 

12.4

%

 

 

 

 

 

 

 

 

 

Benefit plan income, net

 

8

 

 

 

 

8

 

 

 

 

 

 

 

 

 

 

 

 

Settlement charges

 

(46

)

 

 

 

(15

)

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(42

)

 

 

 

(49

)

 

 

 

 

 

 

 

 

 

 

 

Losses on early retirement of debt

 

(30

)

 

 

 

(28

)

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

449

 

 

 

 

966

 

 

 

 

 

 

 

 

 

 

 

 

Federal, state and local income tax expense

 

(109

)

 

 

 

(226

)

 

 

 

 

 

 

 

 

 

 

 

Net income

 

340

 

 

 

 

740

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Macy's, Inc. shareholders

 

$

340

 

 

 

 

$

740

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

1.10

 

 

 

 

$

2.40

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

1.09

 

 

 

 

$

2.37

 

 

 

 

 

 

 

 

 

 

 

 

Average common shares:

 

 

 

 

 

 

 

 

Basic

 

309.9

 

 

 

 

308.4

 

 

 

Diluted

 

311.5

 

 

 

 

311.9

 

 

 

 

 

 

 

 

 

 

 

 

End of period common shares outstanding

 

309.0

 

 

 

 

307.5

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Financial Measures:

 

 

 

 

 

 

 

 

Gross Margin (Note 2)

 

$

3,071

 

 

36.8

%

 

$

3,167

 

 

37.5

%

Depreciation and amortization expense

 

$

256

 

 

 

 

$

244

 

 

 

MACY’S, INC.

Consolidated Statements of Income (Unaudited) (Note 1)

(All amounts in millions except percentages and per share figures)

 

 

 

52 Weeks Ended

 

52 Weeks Ended

 

 

February 1, 2020

 

February 2, 2019

 

 

$

 

% to
Net sales

 

$

 

% to
Net sales

 

 

 

 

 

 

 

 

 

Net sales

 

$

24,560

 

 

 

 

$

24,971

 

 

 

 

 

 

 

 

 

 

 

 

Credit card revenues, net

 

771

 

 

3.1

%

 

768

 

 

3.1

%

 

 

 

 

 

 

 

 

 

Cost of sales

 

(15,171

)

 

(61.8

%)

 

(15,215

)

 

(60.9

%)

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

(8,998

)

 

(36.6

%)

 

(9,039

)

 

(36.2

%)

 

 

 

 

 

 

 

 

 

Gains on sale of real estate

 

162

 

 

0.6

%

 

389

 

 

1.5

%

 

 

 

 

 

 

 

 

 

Restructuring, impairment, store closings and other costs

 

(354

)

 

(1.4

%)

 

(136

)

 

(0.5

%)

 

 

 

 

 

 

 

 

 

Operating income

 

970

 

 

3.9

%

 

1,738

 

 

7.0

%

 

 

 

 

 

 

 

 

 

Benefit plan income, net

 

31

 

 

 

 

39

 

 

 

 

 

 

 

 

 

 

 

 

Settlement charges

 

(58

)

 

 

 

(88

)

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(185

)

 

 

 

(236

)

 

 

 

 

 

 

 

 

 

 

 

Losses on early retirement of debt

 

(30

)

 

 

 

(33

)

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

728

 

 

 

 

1,420

 

 

 

 

 

 

 

 

 

 

 

 

Federal, state and local income tax expense

 

(164

)

 

 

 

(322

)

 

 

 

 

 

 

 

 

 

 

 

Net income

 

564

 

 

 

 

1,098

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interest

 

 

 

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Macy's, Inc. shareholders

 

$

564

 

 

 

 

$

1,108

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

1.82

 

 

 

 

$

3.60

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

1.81

 

 

 

 

$

3.56

 

 

 

 

 

 

 

 

 

 

 

 

Average common shares:

 

 

 

 

 

 

 

 

Basic

 

309.7

 

 

 

 

307.7

 

 

 

Diluted

 

311.4

 

 

 

 

311.4

 

 

 

 

 

 

 

 

 

 

 

 

End of period common shares outstanding

 

309.0

 

 

 

 

307.5

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Financial Measures:

 

 

 

 

 

 

 

 

Gross Margin (Note 2)

 

$

9,389

 

 

38.2

%

 

$

9,756

 

 

39.1

%

Depreciation and amortization expense

 

$

981

 

 

 

 

$

962

 

 

 

MACY’S, INC.

Consolidated Balance Sheets (Unaudited) (Note 1)

(millions)

 

 

 

February 1,
2020

 

February 2,
2019

ASSETS:

 

 

 

 

Current Assets:

 

 

 

 

Cash and cash equivalents

 

$

685

 

 

$

1,162

 

Receivables

 

409

 

 

400

 

Merchandise inventories

 

5,188

 

 

5,263

 

Prepaid expenses and other current assets

 

528

 

 

620

 

Total Current Assets

 

6,810

 

 

7,445

 

 

 

 

 

 

Property and Equipment – net

 

6,633

 

 

6,637

 

Right of Use Assets

 

2,668

 

 

 

Goodwill

 

3,908

 

 

3,908

 

Other Intangible Assets – net

 

439

 

 

478

 

Other Assets

 

714

 

 

726

 

 

 

 

 

 

Total Assets

 

$

21,172

 

 

$

19,194

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY:

 

 

 

 

Current Liabilities:

 

 

 

 

Short-term debt

 

$

539

 

 

$

43

 

Merchandise accounts payable

 

1,682

 

 

1,655

 

Accounts payable and accrued liabilities

 

3,448

 

 

3,366

 

Income taxes

 

81

 

 

168

 

Total Current Liabilities

 

5,750

 

 

5,232

 

 

 

 

 

 

Long-Term Debt

 

3,621

 

 

4,708

 

Long-Term Lease Liabilities

 

2,918

 

 

 

Deferred Income Taxes

 

1,169

 

 

1,238

 

Other Liabilities

 

1,337

 

 

1,580

 

Shareholders' Equity:

 

 

 

 

Macy's, Inc.

 

6,377

 

 

6,436

 

Noncontrolling interest

 

 

 

 

Total Shareholders' Equity

 

6,377

 

 

6,436

 

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

21,172

 

 

$

19,194

 

MACY’S, INC.

 

Consolidated Statements of Cash Flows (Unaudited) (Note 1 and Note 3)

(millions)

 

 

 

52 Weeks
Ended

 

52 Weeks
Ended

 

 

February 1,
2020

 

February 2,
2019

Cash flows from operating activities:

 

 

 

 

Net income

 

$

 

564

 

 

$

 

1,098

 

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

 

 

 

 

Restructuring, impairment, store closings and other costs

 

 

354

 

 

 

136

 

Settlement charges

 

 

58

 

 

 

88

 

Depreciation and amortization

 

 

981

 

 

 

962

 

Benefit plans

 

 

31

 

 

 

30

 

Stock-based compensation expense

 

 

38

 

 

 

63

 

Gains on sale of real estate

 

 

(162

)

 

 

(389

)

Deferred income taxes

 

 

(6

)

 

 

112

 

Amortization of financing costs and premium on acquired debt

 

 

4

 

 

 

(15

)

Changes in assets and liabilities:

 

 

 

 

Increase in receivables

 

 

(9

)

 

 

(61

)

(Increase) decrease in merchandise inventories

 

 

75

 

 

 

(87

)

Decrease in prepaid expenses and other current assets

 

 

89

 

 

 

21

 

Increase in merchandise accounts payable

 

 

40

 

 

 

55

 

Increase (decrease) in accounts payable and accrued liabilities

 

 

(257

)

 

 

14

 

Decrease in current income taxes

 

 

(60

)

 

 

(136

)

Change in other assets and liabilities

 

 

(132

)

 

 

(156

)

Net cash provided by operating activities

 

 

1,608

 

 

 

1,735

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchase of property and equipment

 

 

(902

)

 

 

(657

)

Capitalized software

 

 

(255

)

 

 

(275

)

Disposition of property and equipment

 

 

185

 

 

 

474

 

Other, net

 

 

(30

)

 

 

2

 

Net cash used by investing activities

 

 

(1,002

)

 

 

(456

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Debt issuance costs

 

 

(3

)

 

 

Debt repaid

 

 

(597

)

 

 

(1,149

)

Dividends paid

 

 

(466

)

 

 

(463

)

Increase (decrease) in outstanding checks

 

 

(62

)

 

 

16

 

Acquisition of treasury stock

 

 

(1

)

 

 

Issuance of common stock

 

 

6

 

 

 

45

 

Proceeds from noncontrolling interest

 

 

 

 

7

 

Net cash used by financing activities

 

 

(1,123

)

 

 

(1,544

)

 

 

 

 

 

Net decrease in cash, cash equivalents and restricted cash

 

 

(517

)

 

 

(265

)

Cash, cash equivalents and restricted cash beginning of period

 

 

1,248

 

 

 

1,513

 

 

 

 

 

 

Cash, cash equivalents and restricted cash end of period

 

$

 

731

 

 

$

 

1,248

 

MACY’S, INC.

Consolidated Financial Statements (Unaudited)

Notes:

 

 

(1)

 

The results for the 13 and 52 weeks ended February 1, 2020 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.

 

 

(2)

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

 

 

(3)

 

Restricted cash of $46 million and $86 million have been included with cash and cash equivalents for the 52 weeks ended February 1, 2020 and February 2, 2019, respectively. Further, reclassifications were made to certain prior period 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
February 1,
2020

 

52 Weeks Ended
February 1,
2020

 

 

 

 

 

Decrease in comparable sales on an owned basis (Note 4)

 

(0.6

)%

 

(0.8

)%

 

 

 

 

 

Comparable sales growth impact of departments licensed to third parties (Note 5)

 

0.1

%

 

0.1

%

 

 

 

 

 

Decrease in comparable sales on an owned plus licensed basis

 

(0.5

)%

 

(0.7

)%

 

 

13 Weeks Ended
February 2,
2019

 

52 Weeks Ended
February 2,
2019

 

 

 

 

 

Increase in comparable sales on an owned basis (Note 4)

 

0.4

%

 

1.7

%

 

 

 

 

 

Comparable sales growth impact of departments licensed to third parties (Note 5)

 

0.3

%

 

0.3

%

 

 

 

 

 

Increase in comparable sales on an owned plus licensed basis

 

0.7

%

 

2.0

%

 

 

 

 

 

Impact of 53rd Week Shifted Calendar

 

1.3

%

 

0.4

%

 

 

 

 

 

53rd Week Shifted Calendar comparable sales on an owned plus licensed basis
   (Note 6)

 

2.0

%

 

2.4

%

Notes:

(4)

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.

 

 

(5)

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.

 

 

(6)

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
(All amounts in millions except percentages and per share figures)

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 shareholders.

Adjusted EBITDA

 

 

13 Weeks Ended

 

13 Weeks Ended

 

 

February 1, 2020

 

February 2, 2019

 

 

 

 

 

Net income attributable to Macy's, Inc. shareholders

 

$

 

340

 

 

$

 

740

 

Interest expense, net

 

 

42

 

 

 

49

 

Losses on early retirement of debt

 

 

30

 

 

 

28

 

Federal, state and local income tax expense

 

 

109

 

 

 

226

 

Depreciation and amortization

 

 

256

 

 

 

244

 

EBITDA

 

 

777

 

 

 

1,287

 

Restructuring, impairment, store closings and other
costs

 

 

337

 

 

 

97

 

Settlement charges

 

 

46

 

 

 

15

 

Adjusted EBITDA

 

$

 

1,160

 

 

$

 

1,399

 

 

 

52 Weeks Ended

 

52 Weeks Ended

 

 

February 1, 2020

 

February 2, 2019

 

 

 

 

 

Net income attributable to Macy's, Inc. shareholders

 

$

564

 

 

$

1,108

 

Interest expense, net

 

185

 

 

236

 

Losses on early retirement of debt

 

30

 

 

33

 

Federal, state and local income tax expense

 

164

 

 

322

 

Depreciation and amortization

 

981

 

 

962

 

EBITDA

 

1,924

 

 

2,661

 

Restructuring, impairment, store closings and other
costs (Note 7)

 

354

 

 

128

 

Settlement charges

 

58

 

 

88

 

Adjusted EBITDA

 

$

2,336

 

 

$

2,877

 

Note 7: The above pre-tax adjustments for the 52 weeks ended February 2, 2019 exclude impairment, restructuring and other costs attributable to the noncontrolling interest shareholder of $8 million.

MACY’S, INC.


Important Information Regarding Non-GAAP Financial Measures

(All amounts in millions except percentages and per share figures)


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

 

 

 

13 Weeks Ended

 

13 Weeks Ended

 

 

February 1, 2020

 

February 2, 2019

 

 

 

 

 

 

 

 

 

 

 

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

 

$

 

340

 

 

$

 

1.09

 

 

$

 

740

 

 

$

 

2.37

 

Restructuring, impairment, store closings and other
costs

 

 

337

 

 

 

1.08

 

 

 

97

 

 

 

0.31

 

Settlement charges

 

 

46

 

 

 

0.15

 

 

 

15

 

 

 

0.05

 

Losses on early retirement of debt

 

 

30

 

 

 

0.10

 

 

 

28

 

 

 

0.09

 

Income tax impact of certain items identified above

 

 

(92

)

 

 

(0.30

)

 

 

(30

)

 

 

(0.09

)

As adjusted

 

$

 

661

 

 

$

 

2.12

 

 

$

 

850

 

 

$

 

2.73

 

 

 

 

52 Weeks Ended

 

52 Weeks Ended

 

 

February 1, 2020

 

February 2, 2019

 

 

 

 

 

 

 

 

 

 

 

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

 

$

 

564

 

 

$

 

1.81

 

 

$

 

1,108

 

 

$

 

3.56

 

Restructuring, impairment, store closings and other
costs (Note 8)

 

 

354

 

 

 

1.13

 

 

 

128

 

 

 

0.41

 

Settlement charges

 

 

58

 

 

 

0.19

 

 

 

88

 

 

 

0.28

 

Losses on early retirement of debt

 

 

30

 

 

 

0.10

 

 

 

33

 

 

 

0.11

 

Income tax impact of certain items identified above

 

 

(100

)

 

 

(0.32

)

 

 

(56

)

 

 

(0.18

)

As adjusted

 

$

 

906

 

 

$

 

2.91

 

 

$

 

1,301

 

 

$

 

4.18

 

Note 8: The above pre-tax adjustment for the 52 weeks ended February 2, 2019 exclude impairment, restructuring and other costs attributable to the noncontrolling interest shareholder of $8 million.

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

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

Source: Macy’s, Inc.