Diluted 2016 EPS is $1.99,
or $3.11 as adjusted; Company provides 2017 sales and
earnings guidance
Macy’s, Inc. (NYSE:M) today reported fiscal 2016 earnings per
diluted share of $1.99, or $3.11 per diluted share
excluding certain items discussed below.
“While 2016 was not the year we expected, we made significant
progress on key initiatives that are starting to bear
fruit. These include continued improvement in our digital
platforms, the rollout of our new approach to fine jewelry and
women’s shoes, an increase in exclusive merchandise and the
refinement of our clearance and off-price strategy. We also took a
big step forward in rightsizing our physical footprint and
restructuring our entire organization. The combination of these
initiatives will help us gain market share, return to growth and
drive enhanced value for our shareholders over time,” said Terry J.
Lundgren, Macy’s chairman and chief executive officer.
“We will be investing for the future in 2017. Looking at
the continued challenges in the retail environment and changing
consumer shopping behaviors, we know we must evolve our strategy
and execute faster,” Lundgren said. “Key to this is enhancing the
customer experience in our stores where we are developing and
testing concepts that feature new merchandise and entertainment
options alongside enhanced technology to make shopping
simpler. Additional initiatives that we believe will improve
sales trends in 2017 include continued omnichannel improvements, an
updated marketing strategy and a simplified pricing structure.”
“We continued to make progress on the execution of our real
estate strategy in the fourth quarter of 2016 and will carry that
momentum into 2017. Overall, real estate transactions in
fiscal 2016 generated cash proceeds of approximately $675 million,
which is helping to fund continued reinvestment in the
business. We also began work on deriving value from our
partnership with Brookfield Asset Management. We are excited by the
potential of our real estate strategy, and in 2017, we will focus
on advancing the Brookfield partnership and continuing to monetize
the locations that we have closed or plan to close. We are
also developing strategies that will help create value for Herald
Square while making the store an even more vibrant retail
experience,” Lundgren added.
For the full year 2016, adjusted earnings (excluding items
described below) were $3.11 per diluted share. This
exceeds the company’s most recent guidance for 2016 earnings
of $2.95 to $3.10 on the same basis. Fiscal 2016 comparable
sales on an owned basis declined by 3.5 percent. On an owned plus
licensed basis, comparable sales for fiscal 2016 declined by 2.9
percent. This compares to the most recent guidance for 2016 sales
on an owned plus licensed basis to be down 2.5 percent to 3.0
percent.
Sales
Sales in the fourth quarter of 2016 totaled $8.515 billion,
down 4.0 percent from total sales of $8.869 billion in
the fourth quarter of 2015. On an owned basis, fourth quarter
comparable sales declined by 2.7 percent. Comparable sales on an
owned plus licensed basis for the fourth quarter were down 2.1
percent.
Sales in fiscal 2016 totaled $25.778 billion, down 4.8
percent from total sales of $27.079 billion in fiscal
2015. On an owned basis, fiscal 2016 comparable sales were down 3.5
percent. Comparable sales on an owned plus licensed basis for
fiscal 2016 declined by 2.9 percent.
In fiscal 2016, the company opened 27 stores and closed 66
stores, all as previously announced. Macy’s, Inc. plans to close an
additional approximately 34 stores over the next few years for a
total of approximately 100 stores. New stores opened in fiscal 2016
included one Macy’s store in Kapolei, HI, 24 Bluemercury
freestanding stores, one Macy’s Backstage freestanding store in San
Antonio, TX, and one Bloomingdale’s Outlet in Orange, CA.
Operating Income
Macy’s, Inc.’s operating income totaled $815
million, or 9.6 percent of sales, for the fourth quarter
ended Jan. 28, 2017, compared with operating income
of $936 million, or 10.6 percent of sales, for the fourth
quarter of fiscal 2015.
Macy’s, Inc.’s fourth quarter 2016 operating income
included $230 million of impairments, store closing and
other costs. The $230 million included $38
million of asset impairment charges primarily related to the
store closings announced in January 2017, $166 million of severance
and other costs primarily associated with organizational changes
and store closings announced in January 2017 and $26 million of
other related costs and expenses. Excluding these items, as well as
non-cash settlement charges related to the company’s retirement
plans of $17 million, operating income for the fourth quarter of
2016 was $1.062 billion or 12.5 percent of sales.
Fourth quarter 2015 operating income included $177
million of impairments, store closing and other costs.
Excluding these items, operating income for the fourth quarter of
2015 was $1.113 billion or 12.6 percent of sales.
For fiscal 2016, Macy’s, Inc.’s operating income
totaled $1.315 billion, or 5.1 percent of sales, compared
with operating income of $2.039 billion, or 7.5 percent
of sales, for fiscal 2015.
Macy’s, Inc.’s fiscal 2016 operating income included $479
million of impairments, store closing and other costs.
The $479 million included $265 million of asset
impairment charges primarily related to the store closings
announced in January 2017, $168 million of severance and other
costs primarily associated with organizational changes and store
closings announced in January 2017 and $46 million of other related
costs and expenses. Excluding these items, as well as non-cash
settlement charges related to the company’s retirement plans of $98
million, operating income for fiscal 2016 was $1.892
billion or 7.3 percent of sales.
Macy’s, Inc.’s fiscal 2015 operating income included $288
million of impairments, store closing and other costs. Excluding
these items, operating income for fiscal 2015 was $2.327
billion or 8.6 percent of sales.
Earnings Per Share
Fourth quarter 2016 earnings per diluted share were $1.54.
Excluding impairments, store closing, settlement charges and other
costs of $247 million ($147 million after tax or 48 cents per
diluted share), earnings per diluted share on an adjusted basis
were $2.02 for the fourth quarter of 2016.
In 2015, fourth quarter earnings per diluted share were $1.73.
Excluding impairments, store closing and other costs of $177
million ($115 million after tax or 36 cents per
diluted share), earnings per diluted share on an adjusted basis
were $2.09 for the fourth quarter of 2015.
Earnings per diluted share were $1.99 for fiscal 2016. Excluding
impairments, store closing, settlement charges and other costs of
$577 million ($349 million after tax or $1.12 per diluted share),
earnings per diluted share on an adjusted basis were $3.11 for
fiscal 2016.
In fiscal 2015, earnings per diluted share were $3.22. Excluding
impairments, store closing and other costs of $288
million ($184 million after tax or 55 cents per
diluted share), earnings per diluted share on an adjusted basis
were $3.77 for fiscal 2015.
Cash Flow
Net cash provided by operating activities was $1.801
billion in fiscal 2016, compared with $1.984
billion in fiscal 2015. Net cash used by investing activities
in fiscal 2016 was $187 million, compared with $1.092
billion in the previous year. Operating cash flows net of investing
were $1.614 billion in fiscal 2016, compared with $892
million in fiscal 2015.
In fiscal 2016, the company repurchased approximately 7.9
million shares of its common stock for approximately $316
million. As of Jan. 28, 2017, the company had remaining
authorization to repurchase up to approximately $1.716
billion of its common stock.
Real Estate Update
In fiscal 2016, the company's asset sales totaled $673 million
in cash proceeds ($209 million in book gains).
Macy’s, Inc. continues to harvest real estate value
opportunistically where the value of the real estate as a
redevelopment exceeds that of non-strategic operating locations. In
addition, the company is closing less productive stores and selling
the associated real estate.
As an example of these actions, Macy’s, Inc. completed the
previously announced sale of its Union Square Men’s building in San
Francisco for $250 million in gross proceeds. The Men’s Store will
be incorporated into the Union Square Main building. The company
also anticipates additional enhancements to its Union Square Main
building through the conversion of street-level selling space into
high-end luxury retail shops that will be leased to third parties.
Likewise, Macy’s, Inc. is exploring strategies that will help
create value and further improve the customer experience at its
Herald Square store in New York City. The company also expects to
close shortly on the previously announced sale of its downtown
Minneapolis store.
To further create value from its real estate portfolio, the
company continues to work with its strategic partner, Brookfield
Asset Management, on approximately 50 identified assets.
Brookfield’s expertise will be invaluable in accelerating
redevelopment and maximizing the value of these properties.
Contemplated developments include retail, as well as alternative
uses, such as multifamily housing, hotels and offices. The projects
range from the complete ground-up redevelopment of a building to
the development of parcels in a parking area, while maintaining a
store presence.
CEO Transition
Macy’s, Inc. also announced today that its previously announced
CEO transition will occur on March 23, 2017. As noted in the
company’s June 23, 2016, announcement, Jeff Gennette, president of
Macy’s, Inc., will assume the CEO role and Terry Lundgren will
continue as executive chairman of the company.
Looking Ahead
In fiscal 2017, the company expects comparable sales on an owned
basis to decline between 2.2 percent and 3.3 percent, with
comparable sales on an owned plus licensed basis to decline between
2.0 percent and 3.0 percent. Total sales are expected to be down
between 3.2 percent and 4.3 percent in fiscal 2017, reflecting the
66 stores closed in 2016. Total sales for fiscal 2017 reflect a
53rd week of sales, whereas comparable sales are on a 52-week
basis. Adjusted diluted earnings per share of between $3.37
and $3.62 are expected in 2017, excluding the impact of the
anticipated settlement charges related to the company’s defined
benefit plans. Excluding the impact of the anticipated fourth
quarter gain on the sale of the Union Square Men’s building in San
Francisco and the anticipated settlement charges related to the
company’s defined benefit plans, adjusted diluted earnings per
share of $2.90 to $3.15 are expected in 2017.
Capital expenditures for 2017 are expected to be
approximately $900 million.
In fiscal 2017, the company expects to open Macy’s stores
in Westfield Century City, Los Angeles, CA, and Fashion Place,
Murray, UT, as well as approximately 30 additional Bluemercury
locations and approximately 30 Macy’s Backstage locations inside
Macy’s stores. Announced new stores in future years include
Bloomingdale’s in San Jose, CA (2019), and Norwalk,
CT (2019). In addition, under license agreements with Al Tayer
Group, a new Bloomingdale’s store is planned to open in 360 Mall in
Al Zahra, Kuwait in spring 2017 and new Macy’s and Bloomingdale’s
stores are planned to open in Al Maryah Central in Abu Dhabi,
United Arab Emirates in 2018.
Important Information Regarding Financial Measures
Please see the final pages of this news release for important
information regarding the calculation of the company’s non-GAAP
financial measures.
Investor Conferences
Macy’s, Inc. will present at the UBS Global Consumer &
Retail Conference at 10:30 a.m. ET on Wednesday, March 8, 2017, in
Boston. Media and investors may access the live webcast of the
presentation at www.macysinc.com/ir at the appointed time. The
webcast will be available for replay.
Macy’s, Inc. will present at the Bank of America Merrill Lynch
2017 Consumer & Retail Technology Conference at 8 a.m. ET on
Tuesday, March 14, 2017, in New York City. Media and investors may
access the live webcast of the presentation at www.macysinc.com/ir
at the appointed time. The webcast will be available for
replay.
Macy’s, Inc., with corporate offices in Cincinnati and New York,
is one of the nation’s premier retailers, with fiscal 2016 sales of
$25.778 billion. The company operates more than 700 department
stores under the nameplates Macy’s and Bloomingdale’s, and
approximately 125 specialty stores that include Bloomingdale’s
Outlet, Bluemercury and Macy’s Backstage, in 45 states, the
District of Columbia, Guam and Puerto Rico, 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.
Macy’s disclaims any intention or obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
(NOTE: Additional information on Macy’s, Inc., including past
news releases, is available
at www.macysinc.com/pressroom. A webcast of Macy's,
Inc.’s call with analysts and investors will be held today (Feb.
21) at 10 a.m. ET. The 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 1-888-599-8686, passcode
4375466. A replay of the conference call can be accessed on the
website or by calling 1-888 203-1112 (same passcode) about two
hours after the conclusion of the call.)
MACY’S, INC.
Consolidated
Statements of Income (Unaudited) (Note 1)
(All amounts in millions except
percentages and per share figures)
13 Weeks Ended 13 Weeks Ended
January 28, 2017
January 30, 2016
$
% toNet sales
$
% toNet sales
Net sales $ 8,515 $ 8,869 Cost of sales (Note 2)
5,251 61.7 %
5,549 62.6 %
Gross margin 3,264 38.3 % 3,320 37.4 % Selling,
general and administrative expenses (2,202 ) (25.8 %) (2,207 )
(24.8 %) Impairments, store closing and other costs (Note 3)
(230 ) (2.7 %) (177 ) (2.0 %) Settlement charges (Note 4)
(17 )
(0.2 %)
- - Operating income
815 9.6 % 936 10.6 % Interest expense – net
(87 )
(93 ) Income before
income taxes 728 843 Federal, state and local income tax
expense (Note 5)
(256 )
(300 ) Net income 472 543 Net loss
attributable to non-controlling interest
3
1 Net income attributable
to Macy’s, Inc. shareholders
$ 475
$ 544
Basic earnings per share attributable to
Macy’s, Inc. shareholders
$ 1.56 $
1.74
Diluted earnings per share attributable to
Macy’s, Inc. shareholders
$ 1.54 $
1.73 Average common shares: Basic 305.5
312.2 Diluted 307.8 314.8 End of period common shares
outstanding 304.1 310.3 Depreciation and amortization
expense $ 271 $ 270
MACY’S, INC.
Consolidated Statements
of Income (Unaudited)
Notes: (1) Because of the seasonal nature of the
retail business, the results of operations for the 13 weeks ended
January 28, 2017 and January 30, 2016 (which include the Christmas
season) are not necessarily indicative of such results for the
fiscal year. (2) Merchandise inventories are valued at the
lower of cost or market using the last-in, first-out (LIFO) retail
inventory method. Application of the LIFO retail inventory method
did not result in the recognition of any LIFO charges or credits
affecting cost of sales for the 13 weeks ended January 28, 2017 or
January 30, 2016. (3) For the 13 weeks ended January 28,
2017, impairments, store closing and other costs amounted to $230
million on a pre-tax basis, $137 million after tax or $.45 per
diluted share attributable to Macy’s, Inc. These costs include $38
million of asset impairment charges primarily related to the store
closings announced in January 2017, $166 million of severance and
other human resource-related costs associated with the organization
changes and store closings announced in January 2017 and $26
million of other related costs and expenses. For the 13 weeks ended
January 30, 2016, impairments, store closing and other costs
amounted to $177 million on a pre-tax basis, $115 million after tax
or $.36 per diluted share attributable to Macy’s, Inc. These costs
included $37 million of asset impairment charges primarily related
to the store closings announced in January 2016, $123 million of
severance and other human resource-related costs associated with
the organization changes and store closings announced in January
2016 and $17 million of other related costs and expenses.
(4) Non-cash settlement charges of $17 million on a pre-tax basis,
$10 million after tax or $.03 per diluted share attributable to
Macy’s, Inc., were recognized in the 13 weeks ended January 28,
2017. These charges relate to the pro-rata recognition of net
actuarial losses associated with the Company’s defined benefit
retirement plans and are the result of an increase in lump sum
distributions associated with store closings, a voluntary
separation program, organizational restructuring, and periodic
distribution activity. (5) Federal, state and local income
taxes differ from the federal income tax statutory rate of 35%,
principally because of the effect of state and local taxes,
including the settlement of various tax issues and tax
examinations.
MACY’S, INC.
Consolidated
Statements of Income (Unaudited)
(All amounts in millions except
percentages and per share figures)
52 Weeks Ended 52 Weeks Ended
January 28, 2017
January 30, 2016
$
% toNet sales
$
% toNet sales
Net sales $ 25,778 $ 27,079 Cost of sales (Note 1)
15,621 60.6 %
16,496 60.9 %
Gross margin 10,157 39.4 % 10,583 39.1 % Selling,
general and administrative expenses (8,265 ) (32.0 %) (8,256 )
(30.5 %) Impairments, store closing and other costs (Note 2)
(479 ) (1.9 %) (288 ) (1.1 %) Settlement charges (Note 3)
(98 )
(0.4 %)
- - Operating income
1,315 5.1 % 2,039 7.5 % Interest expense – net
(363 )
(361 ) Income before
income taxes 952 1,678 Federal, state and local income tax
expense (Note 4)
(341 )
(608 ) Net income 611 1,070 Net loss
attributable to non-controlling interest
8
2 Net income attributable
to Macy’s, Inc. shareholders
$ 619
$ 1,072
Basic earnings per share attributable to
Macy’s, Inc. shareholders
$ 2.01 $ 3.26
Diluted earnings per share attributable to
Macy’s, Inc. shareholders
$ 1.99 $ 3.22 Average common shares: Basic
308.5 328.4 Diluted 310.8 333.0 End of period common shares
outstanding 304.1 310.3 Depreciation and amortization
expense $ 1,058 $ 1,061
MACY’S, INC.
Consolidated Statements
of Income (Unaudited)
Notes: (1) Merchandise inventories are valued at the
lower of cost or market using the last-in, first-out (LIFO) retail
inventory method. Application of the LIFO retail inventory method
did not result in the recognition of any LIFO charges or credits
affecting cost of sales for the 52 weeks ended January 28, 2017 or
January 30, 2016. (2) For the 52 weeks ended January 28,
2017, impairments, store closing and other costs amounted to $479
million on a pre-tax basis, $290 million after tax or $.93 per
diluted share attributable to Macy’s, Inc. These costs include $265
million of asset impairment charges primarily related to the store
closings announced in January 2017, $168 million of severance and
other human resource-related costs primarily associated with the
organization changes and store closings announced in January 2017
and $46 million of other related costs and expenses. For the 52
weeks ended January 30, 2016, impairments, store closing and other
costs amounted to $288 million on a pre-tax basis, $184 million
after tax or $.55 per diluted share attributable to Macy’s, Inc.
These costs included $148 million of asset impairment charges
primarily related to the store closings announced in January 2016,
$123 million of severance and other human resource-related costs
associated with the organization changes and store closings
announced in January 2016 and $17 million of other related costs
and expenses. (3) Non-cash settlement charges of $98 million
on a pre-tax basis, $59 million after tax or $.19 per diluted share
attributable to Macy’s, Inc., were recognized in the 52 weeks ended
January 28, 2017. These charges relate to the pro-rata recognition
of net actuarial losses associated with the Company’s defined
benefit retirement plans and are the result of an increase in lump
sum distributions associated with store closings, a voluntary
separation program, organizational restructuring, and periodic
distribution activity. (4) Federal, state and local income
taxes differ from the federal income tax statutory rate of 35%,
principally because of the effect of state and local taxes,
including the settlement of various tax issues and tax
examinations.
MACY’S, INC.
Consolidated Balance
Sheets (Unaudited)
(millions)
January 28, January 30,
2017 2016
ASSETS: Current Assets: Cash and cash equivalents $ 1,297 $ 1,109
Receivables 522 558 Merchandise inventories 5,399 5,506 Prepaid
expenses and other current assets
408
479 Total Current Assets 7,626 7,652 Property
and Equipment – net 7,017 7,616 Goodwill 3,897 3,897 Other
Intangible Assets – net 498 514 Other Assets
813 897 Total Assets
$ 19,851 $
20,576 LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities: Short-term debt $ 309 $ 642 Merchandise
accounts payable 1,423 1,526 Accounts payable and accrued
liabilities 3,563 3,333 Income taxes
352
227 Total Current Liabilities 5,647 5,728
Long-Term Debt 6,562 6,995 Deferred Income Taxes 1,443 1,477 Other
Liabilities 1,877 2,123 Shareholders’ Equity: Macy’s, Inc. 4,323
4,250 Non-controlling interest
(1)
3 Total Shareholders’ Equity
4,322
4,253 Total Liabilities and
Shareholders’ Equity
$ 19,851
$ 20,576
MACY’S, INC.
Consolidated
Statements of Cash Flows (Unaudited)
(millions)
52 Weeks EndedJanuary 28,
2017
52 Weeks EndedJanuary 30,
2016
Cash flows from operating activities: Net income $ 611 $ 1,070
Adjustments to reconcile net income to net
cash provided by operating activities:
Impairments, store closing and other costs 479 288 Settlement
charges 98 - Depreciation and amortization 1,058 1,061 Stock-based
compensation expense 61 65 Gains on sale of real estate (209 ) (212
)
Amortization of financing costs and
premium on acquired debt
(14 ) (14 ) Changes in assets and liabilities: Increase in
receivables (1 ) (45 ) (Increase) decrease in merchandise
inventories 107 (60 ) Increase in prepaid expenses and other
current assets (8 ) - Increase in other assets not separately
identified - (1 ) Decrease in merchandise accounts payable (132 )
(78 ) Increase (decrease) in accounts payable, accrued liabilities
and other items not separately identified (162 ) 68 Increase
(decrease) in current income taxes 125 (69 ) Decrease in deferred
income taxes (139 ) (1 ) Decrease in other liabilities not
separately identified
(73 )
(88 ) Net cash provided by operating activities
1,801 1,984
Cash flows from investing activities:
Purchase of property and equipment (596 ) (777 ) Capitalized
software (316 ) (336 ) Acquisition of Bluemercury, Inc., net of
cash acquired - (212 ) Disposition of property and equipment 673
204 Other, net
52 29
Net cash used by investing activities
(187 )
(1,092 )
Cash flows from financing activities:
Debt issued 2 499 Financing costs (3 ) (4 ) Debt repaid (751 ) (152
) Dividends paid (459 ) (456 ) Increase (decrease) in outstanding
checks 61 (83 ) Acquisition of treasury stock (316 ) (2,001 )
Issuance of common stock 36 163 Proceeds from non-controlling
interest
4 5
Net cash used by financing activities
(1,426 )
(2,029 ) Net increase (decrease) in cash and
cash equivalents 188 (1,137 ) Cash and cash equivalents at
beginning of period
1,109
2,246 Cash and cash equivalents at end
of period
$ 1,297 $
1,109
Note: Certain reclassifications were made to prior year’s
amounts to conform with the classifications of such amounts in the
most recent years.
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 supplemental 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, assists in evaluating the Company's ability to
generate sales growth, whether through owned businesses or
departments licensed to third parties, and in evaluating the impact
of changes in the manner in which certain departments are operated.
In addition, management believes that excluding certain items from
operating income and diluted earnings per share attributable to
Macy's, Inc. shareholders that may vary substantially in frequency
and magnitude period-to-period 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. Further, providing
cash flow from operating activities net of cash used in investing
activities is a useful measure in evaluating Macy's ability to
generate cash from operations after giving effect to cash used by
investing activities. Management believes that excluding cash flows
from financing activities from the calculation of this measure is
particularly useful where the amounts of such items are not
consistent in the periods presented.
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.
MACY’S, INC.
Important Information
Regarding Non-GAAP Financial Measures
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.
13 WeeksEndedJanuary 28,2017
52 WeeksEndedJanuary 28,2017
Decrease in comparable sales on an owned basis (Note 1)
(2.7 %)
(3.5 %)
Impact of growth in comparable sales of
departments licensed to third parties (Note 2)
0.6 % 0.6 % Decrease in comparable sales on an owned plus
licensed basis
(2.1 %)
(2.9
%) 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 of macys.com and bloomingdales.com, 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 of macys.com and bloomingdales.com 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.
MACY’S, INC.
Important Information
Regarding Non-GAAP Financial Measures
Diluted Earnings Per Share Attributable to
Macy's, Inc. Shareholders, Excluding Certain Items
The following is a reconciliation of the non-GAAP financial
measure diluted earnings per share attributable to Macy's, Inc.
shareholders, excluding certain items, to GAAP diluted earnings per
share attributable to Macy's, Inc., shareholders, which the Company
believes to be the most directly comparable GAAP measure.
13 WeeksEndedJanuary 28,2017
13 WeeksEndedJanuary 30,2016
Diluted earnings per share attributable to
Macy’s, Inc. shareholders
$1.54 $1.73
Add back the pre-tax impact of
impairments, store closing and other costs
0.75 0.56 Add back the pre-tax impact of settlement charges
0.05 -
Deduct the income tax impact of
impairments, store closing and other costs and settlement
charges
(0.32 ) (0.20 )
Diluted earnings per share attributable to
Macy’s, Inc. shareholders, excluding impairments, store closing and
other costs and settlement charges
$2.02 $2.09
52 WeeksEndedJanuary 28,2017
52 WeeksEndedJanuary 30,2016
Diluted earnings per share attributable to
Macy’s, Inc. shareholders
$1.99 $3.22
Add back the pre-tax impact of
impairments, store closing and other costs
1.54 0.86 Add back the pre-tax impact of settlement charges
0.31 -
Deduct the income tax impact of
impairments, store closing and other costs and settlement
charges
(0.73 ) (0.31 )
Diluted earnings per share attributable to
Macy’s, Inc. shareholders, excluding impairments, store closing and
other costs and settlement charges
$3.11 $3.77
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170221005850/en/
Macy’s MediaBrunswick GroupBlair Fasbender, 212-333-3810orMacy’s
InvestorsMatt Stautberg, 513-579-7780
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