Macy's Inc. (M, Financial) released its second quarter fiscal 2020 results on Sept. 2 before the market opened. While the company registered a narrower-than-expected loss, revenue topped projections thanks to robust digital performance.
By the numbers
The department store chain recorded a loss of $0.81 per share for the quarter, which was down a mammoth 389.29% from the prior-year quarter but surpassed Wall Street's projected loss of $1.77 per share. Revenue was $3.56 billion, topping expectations of $3.48 billion.
Comparable store sales dipped 35.1%, both on owned and licensed basis, up from a decline of 40.2% witnessed in the year-ago quarter. Analysts had projected a 28.2% drop in comps.
Reflecting on the company's performance, Chairman and CEO Jeff Gennette said:
"Macy's, Inc. 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. Restarting our stores' business was our top priority, and we successfully accomplished that while also ensuring that our digital business remained strong. 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."
Digital sales
As a result of the pandemic, customers often refrained from going to the physical stores, which is why digital traffic gained momentum during the quarter.
Digital sales rose 53% in the reported quarter, as more customers visited company's app and website. In fact, online sales made up 54% of company's comps. Gennette commented:
"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."
Financials and inventory position
For the fiscal quarter, which ended on Aug. 1, the company had cash on hand of roughly $1.4 billion and about $3 billion of unused capacity under the new asset-based credit facility.
Inventory was down 29% as compared to the year-ago period, reflecting efforts to manage strong e-commerce demand.
Outlook
The company pulled its financial forecast for 2020.
Disclosure: I do not hold any positions in the stocks mentioned.
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