Macy's turnaround looks hopeful

Macy's appears to be emerging from the battering their stores took over coronavirus. The company reported quarter one results today, and while stores reopening around the country are down 50 percent, they performed better than expected.

“The COVID-19 pandemic significantly impacted our first quarter sales and earnings results, but I am proud of the way our team navigated this difficult period and maintained the business while our stores were closed,” said Jeff Gennette, chairman and chief executive officer, in a statement. “Our strong digital business sales trend continued throughout May, and it is encouraging to see that as we reopen a store, the digital business in that geography continues to be strong. By June 1, we had approximately 450 stores reopened, with the majority opened in their full format. Our reopened stores are performing better than anticipated. Importantly, we are receiving positive feedback on the curbside pickup experience and our efforts to create a safe and welcoming shopping environment."

Macy's has seen a strong sell through of season merchandise and expects to exit Q2 with a clean inventory position. Even though it's only June, the company is focusing on its holiday sales time, as that is the most crucial time for apparel retailers.

While 450 stores have reopened, some stores are still only offering curbside pickup. In New York City, retail stores got the go-ahead this week to begin offering curbside pickup.

Macy's has reported a loss of 2 dollars and ten cents a share. E-commerce did show an uptick in May, and curbside pickup has been performing well for the retailer.

Net sales were 3 billion dollars, down from 5.5 billion dollars the previous year. The company also saw an adjusted net income loss of 630 million dollars compared to a profit of 137 million dollars the previous year.

Despite the not as terrible as expected quarterly results, Macy's isn't expecting a full turnaround until 2021 or even 2022. While the national unemployment rate has declined to 13.3 percent for May, down from 14.7 percent in April, many of those were furloughed employees returning to work rather than new positions really being added to payrolls. States are still in recovery from coronavirus and can expect to be in recovery for at least another several months or longer.

photo: via Macy's Press Room