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Macy's Shares Tumble Due to Drab Preliminary Q1 Results
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Macy’s, Inc. (M - Free Report) shares have tumbled 7.1% on Jun 9, as the company posted dismal preliminary numbers for first-quarter fiscal 2020. The department store retailer’s net sales amounted to $3,017 million in the fiscal first quarter compared with $5,504 million reported in the year-ago quarter. Moreover, the company’s gross margin (net sales minus cost of sales) came in at $516 million in the quarter under review. Notably, Macy’s had reported gross margin of $2,101 million in first-quarter fiscal 2019.
During the fiscal first quarter, the company reported operating loss of $969 million against operating income of $203 million in the year-ago period. In the fiscal first quarter, Macy’s reported adjusted EBITDA loss of $689 million. The company had reported adjusted EBITDA of $447 million in the year-ago quarter. Further, adjusted loss for the quarter came in at $2.03 per share. We note that the company had posted adjusted earnings of 44 cents per share in the year-ago quarter.
During the fiscal first quarter, Macy’s bore the brunt of coronavirus-induced woes. Incidentally, management stated that temporary store closures that were undertaken to check the spread of COVID-19 had significant negative impact on the top and the bottom line in this period. We note that shares of this Zacks Rank #4 (Sell) company have declined 9.9% in the past three months compared with the industry’s decline of 6.8%.
Nevertheless, the company is on track to reopen stores since May 4 as coronavirus-led restrictions are gradually being lifted. As of Jun 1, it had reopened nearly 450 outlets, with most of these stores operating in full format. Management stated that the reopened stores have been performing above expectations. Also, Macy’s curbside pickup services have been driving its performance amid the pandemic.
Apart from this, management informed that it witnessed a steady uptick in the digital business for May. Moreover, management is optimistic about demand for seasonal merchandise and expects to end fiscal second-quarter with a clean inventory.
Moving on, Macy’s ended the fiscal first quarter with cash and cash equivalents of $1,523 million and total debt of $5,657 million. In a recent press release, the company stated that it has raised nearly $4.5 billion of new financing, which includes senior secured notes as well as asset-based credit agreement worth $1.3 billion and $3.15 billion, respectively. This is likely to help the company to fund its operations and secure inventory for its business. Also, net cash used by operating activities for 13 weeks ended May 2 was $164 million compared with $38 million in the year-ago period.
RH (RH - Free Report) has a long-term earnings growth rate of 9.2% and a Zacks Rank #1.
Big Lots (BIG - Free Report) has a long-term earnings growth rate of 6.6% and a Zacks Rank #1.
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Macy's Shares Tumble Due to Drab Preliminary Q1 Results
Macy’s, Inc. (M - Free Report) shares have tumbled 7.1% on Jun 9, as the company posted dismal preliminary numbers for first-quarter fiscal 2020. The department store retailer’s net sales amounted to $3,017 million in the fiscal first quarter compared with $5,504 million reported in the year-ago quarter. Moreover, the company’s gross margin (net sales minus cost of sales) came in at $516 million in the quarter under review. Notably, Macy’s had reported gross margin of $2,101 million in first-quarter fiscal 2019.
During the fiscal first quarter, the company reported operating loss of $969 million against operating income of $203 million in the year-ago period. In the fiscal first quarter, Macy’s reported adjusted EBITDA loss of $689 million. The company had reported adjusted EBITDA of $447 million in the year-ago quarter. Further, adjusted loss for the quarter came in at $2.03 per share. We note that the company had posted adjusted earnings of 44 cents per share in the year-ago quarter.
During the fiscal first quarter, Macy’s bore the brunt of coronavirus-induced woes. Incidentally, management stated that temporary store closures that were undertaken to check the spread of COVID-19 had significant negative impact on the top and the bottom line in this period. We note that shares of this Zacks Rank #4 (Sell) company have declined 9.9% in the past three months compared with the industry’s decline of 6.8%.
Nevertheless, the company is on track to reopen stores since May 4 as coronavirus-led restrictions are gradually being lifted. As of Jun 1, it had reopened nearly 450 outlets, with most of these stores operating in full format. Management stated that the reopened stores have been performing above expectations. Also, Macy’s curbside pickup services have been driving its performance amid the pandemic.
Apart from this, management informed that it witnessed a steady uptick in the digital business for May. Moreover, management is optimistic about demand for seasonal merchandise and expects to end fiscal second-quarter with a clean inventory.
Moving on, Macy’s ended the fiscal first quarter with cash and cash equivalents of $1,523 million and total debt of $5,657 million. In a recent press release, the company stated that it has raised nearly $4.5 billion of new financing, which includes senior secured notes as well as asset-based credit agreement worth $1.3 billion and $3.15 billion, respectively. This is likely to help the company to fund its operations and secure inventory for its business. Also, net cash used by operating activities for 13 weeks ended May 2 was $164 million compared with $38 million in the year-ago period.
Some Solid Retail Bets
Dollar General (DG - Free Report) has a long-term earnings growth rate of 12.4%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
RH (RH - Free Report) has a long-term earnings growth rate of 9.2% and a Zacks Rank #1.
Big Lots (BIG - Free Report) has a long-term earnings growth rate of 6.6% and a Zacks Rank #1.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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