Please ensure Javascript is enabled for purposes of website accessibility

Macy’s Is Betting on Strong Holiday Season to Save Its Fiscal Year

By Demitri Kalogeropoulos – Updated Jun 9, 2020 at 9:35AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Sales fell a distressing 45% in the first quarter.

On Tuesday, Macy's (M 1.47%) reported preliminary first-quarter results that revealed the depth of the COVID-19 pandemic's impact on its business. Sales plunged 45% to $3 billion as most of its department store locations were closed to shoppers in observance of social distancing mandates. This slumping customer traffic generated a big financial strain, leading to adjusted net losses of over $600 million compared to a $136 million profit a year earlier. Per-share losses amounted to $2.03 compared to a $0.44 gain last year.

The news will get worse, too, since that earnings figure doesn't include major writedown and impairment charges that Macy's expects to report in its complete earnings announcement on July 1.

A shopper holding bags on an escalator.

Image source: Getty Images.

Still, management was encouraged by the chain's strong digital sales and the early results from its newly reopened stores. Macy's is also in a good inventory position today, the company said.

But the retailer's wider results will depend on its execution over the next few quarters, especially during the seasonal demand spike in the late fall. "The holiday season will be crucial," CEO Jeff Gennette said in a press release, "and the team is working now to get the right merchandise and assortment in place."

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Macy's, Inc. Stock Quote
Macy's, Inc.
$15.90 (1.47%) $0.23

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.