Macy’s, Inc. (NYSE:M) today announced that its comparable sales
on an owned plus licensed basis declined by 2.1 percent in the
months of November and December 2016 combined, compared to the same
period last year. On an owned basis, comparable sales declined by
2.7 percent in the combined November/December period.
(Editor’s Note: Macy’s, Inc. this afternoon also issued a
separate news release announcing actions to streamline its store
portfolio, intensify cost efficiency efforts and execute its real
estate strategy.)
“While our sales trend is consistent with the lower end of our
guidance, we had anticipated sales would be stronger. We believe
that our performance during the holiday season reflects the broader
challenges facing much of the retail industry. We are pleased with
the performance of our digital business, with double-digit gains at
both macys.com and bloomingdales.com; however, store sales
continued to be impacted by changing customer behavior. Our apparel
business, which includes women’s, men’s and children’s, performed
well, with particular strength in active and cold-weather
merchandise. Sales were also strong in fine jewelry, as well as
furniture and bedding, reflecting the success of our initiatives in
those categories. However, ongoing weakness in handbags and watches
negatively impacted our results,” said Terry J. Lundgren, Macy’s,
Inc. chairman and chief executive officer.
2016 Guidance
Macy’s, Inc. maintains its previously provided full-year sales
guidance of a 2.5 percent to 3.0 percent decrease in comparable
sales on an owned plus licensed basis, and expects to come in at
the lower end of that guidance, with comparable sales on an owned
basis to be approximately 50 basis points lower.
The company now expects full-year 2016 diluted earnings per
share (excluding asset impairment, restructuring, retirement
settlement and other charges) to be in a range of $2.95 to $3.10
(compared with previous guidance of $3.15 to $3.40).
Important Information Regarding
Financial Measures
Please see the last page of this news release for important
information regarding the calculation of the company’s non-GAAP
measures.
Fourth Quarter Earnings
Announcement
Macy’s, Inc. is scheduled to report fourth quarter sales and
earnings on February 21, 2017. Additional detail on financial
performance will be provided at that time. The company will webcast
a call with financial analysts and investors at 10 a.m. ET on
February 21, 2017. Macy’s, Inc.’s webcast is accessible to the
media and general public via the company's website at
www.macysinc.com. Analysts and investors may call in on
888-599-8686, passcode 4375466. A replay of the conference call can
be accessed on the website or by calling 888-203-1112 about two
hours after the conclusion of the call.
About Macy’s, Inc.
Macy’s, Inc., with corporate offices in Cincinnati and New York,
is one of the nation’s premier retailers, with fiscal 2015 sales of
$27.079 billion. The company operates about 880 stores in 45
states, the District of Columbia, Guam and Puerto Rico under the
names of Macy’s, Bloomingdale’s, Bloomingdale’s Outlet, Macy’s
Backstage and Bluemercury, as well as the macys.com,
bloomingdales.com and bluemercury.com websites. Bloomingdale’s in
Dubai is operated by Al Tayer Group LLC under a license
agreement.
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
conditions to, or changes in the timing of, proposed real estate
and other transactions, prevailing interest rates and non-recurring
charges, store closings, competitive pressures from specialty
stores, general merchandise stores, off-price and discount stores,
manufacturers’ outlets, the Internet, mail-order catalogs and
television shopping and general consumer spending levels, including
the impact of the availability and level of consumer debt, the
effect of weather and other factors identified in documents filed
by the company with the Securities and Exchange Commission.
(NOTE: Additional information on Macy’s, Inc., including past
news releases, is available at www.macysinc.com/pressroom.)
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 changes in comparable sales on
an owned plus licensed basis, which includes the impact of growth
in comparable sales of departments licensed to third parties
supplementally to its results of operations calculated in
accordance with GAAP assists in evaluating the Company's ability to
generate sales growth, whether through owned businesses or
departments licensed to third parties, on a comparable basis, and
in evaluating the impact of changes in the manner in which certain
departments are operated. Management believes that excluding
certain items that may vary substantially in frequency and
magnitude from diluted earnings per share attributable to Macy's,
Inc. shareholders provides useful supplemental measures that assist
in evaluating the Company's ability to generate earnings and
leverage sales 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, where 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 because the timing and
amount of excluded items (e.g., asset impairment charges,
retirement settlement charges and other store closing related
costs) 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 and 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.
Change in Comparable Sales
The following is a reconciliation of the 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), which
the Company believes to be the most directly comparable GAAP
financial measure.
9 Weeks Ended December 31, 2016
Decrease in comparable sales on an owned basis (Note
1)
(2.7%)
Impact of growth in comparable sales of
departments licensed to third parties (Note 2)
0.6%
Decrease in comparable sales on an owned
plus licensed basis
(2.1%) Notes: (1) Represents the
period-to-period 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. (2) 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 Company believes that the amounts of
commissions earned on sales of departments licensed to third
parties are not material to its results of operations for the
periods presented.
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Macy’s, Inc.MediaHolly
Thomas646-429-5250holly.thomas@macys.comorInvestorsMatt
Stautberg513-579-7780
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