Macy’s Inc. suffered a $431 million net loss in the second quarter, compared to an $86 million gain a year ago, though the performance was better than expected due to some recovery at reopened stores.
Net sales dropped to $3.56 billion in the quarter ended Aug. 1, from $5.55 billion in the year ago period.
Comparable sales were down 34.7 percent.
Digital sales remained strong, growing 53 percent and representing 54 percent of total owned comparable sales.
Gross margin was 23.6 percent, an improvement of about 650 basis points from the first quarter of 2020 due to improved retail margins from mix and better sellthrough of clearance merchandise.
Inventory was down 29 percent from a year ago, allowing the company to exit the second quarter in what it described as a clean inventory position.
Macy’s finished the quarter in “a strong liquidity position” with about $1.4 billion in cash and about $3 billion of untapped capacity in the company’s new asset-based credit facility.
“Macy’s, Inc.’s performance for the quarter was stronger than anticipated across all three brands – Macy’s, Bloomingdale’s and Bluemercury, driven largely by the sales recovery of our stores,” said chairman and chief executive officer Jeff Gennette.
“Restarting our stores’ business was our top priority, and we successfully accomplished that while also ensuring that our digital business remained strong,” he added.
“Going into this crisis, we had a well-developed digital business and we’re seeing that thrive as we attract new and welcome existing customers back to our brands,” said Gennette. “We’ve put significant focus on enhanced health and safety standards which has allowed our customers and colleagues to feel safe in our stores and facilities. I want to thank our colleagues for the tremendous effort that has been put into recovering our business.
“We are encouraged by our second quarter performance; however, we continue to approach the back half of the year conservatively. Our immediate priority is successfully executing holiday 2020. We are also focused on laying the groundwork for 2021 and beyond. We plan to invest in fashion, digital and omnichannel, work with agility, and galvanize the resources of the company to serve our customers and move the Macy’s Inc. business forward.”