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Macy’s, Inc. Reports Third Quarter 2019 Earnings

November 21, 2019

CINCINNATI--(BUSINESS WIRE)--Nov 21, 2019--

Macy’s, Inc. (NYSE: M) today reported results for the third quarter 2019. The company also lowered its annual sales and EPS guidance for fiscal 2019.

Financial Highlights

 

Third Quarter

Year to Date

(in millions)

2019

2018

2019

2018

Net sales

$

5,173

 

$

5,404

 

$

16,223

 

$

16,516

 

Comparable sales

Owned

(3.9

)%

3.1

%

(1.0

)%

2.4

%

Owned plus licensed

(3.5

)%

3.3

%

(0.8

)%

2.7

%

53 rd week shifted calendar (owned plus licensed)*

 

4.1

%

 

2.6

%

 

Net income attributable to Macy’s, Inc. shareholders

$

2

 

$

62

 

$

224

 

$

368

 

Earnings before interest, taxes, depreciation and amortization

$

300

 

$

381

 

$

1,147

 

$

1,374

 

Diluted earnings per share

$

0.01

 

$

0.20

 

$

0.72

 

$

1.18

 

 

Adjusted Net income attributable to Macy’s, Inc. shareholders

$

21

 

$

83

 

$

246

 

$

451

 

Adjusted Earnings before interest, taxes, depreciation and amortization

$

325

 

$

407

 

$

1,175

 

$

1,478

 

Adjusted Diluted earnings per share

$

0.07

 

$

0.27

 

$

0.79

 

$

1.45

 

*Comparable sales adjusted for the impact of the 53rd week reflect a shift of the company’s 2017 calendar to align with 2018 on a like-for-like basis.
Note: Adjusted metrics reflect the exclusion of certain items from the respective financial measures. Please see the final pages of this news release for important information regarding the nature of such excluded amounts and calculation of the company’s non-GAAP financial measures.

“After seven consecutive quarters of comparable sales growth, we experienced a deceleration in our third quarter sales. While we anticipated a negative comp as we were lapping a very strong third quarter last year, the sales deceleration was steeper than we expected. However, having cleared the excess inventory we faced earlier in the year, we were able to take a more balanced approach to sales and profit in the quarter, resulting in significantly improved margin compression versus the first half of the year,” said Jeff Gennette, chairman and chief executive officer of Macy’s, Inc. “Our third quarter sales were impacted by the late arrival of cold weather, continued soft international tourism and weaker than anticipated performance in lower tier malls. We also experienced a temporary impact on our e-commerce business due in part to work on the site in preparation for the fourth quarter. The team has completed that work, the site is upgraded and our customers can expect an improved experience this holiday season. Based primarily on the impact of our third quarter sales trend, we are updating our annual guidance.”

“We have confidence in our holiday strategies. The Macy’s, Bloomingdales and Bluemercury teams are aligned and committed to delivering a great experience for our customers in our stores, on our digital sites and through our mobile apps. We have fully updated our Growth150 stores and completed the 2019 expansion of Backstage. We have curated an expanded gift assortment with great values in all categories and developed a powerful marketing calendar for both our best and occasional customers. This holiday season, we also have even more flexible, secure and convenient fulfillment options for our customers including Pick Up in Store and Same Day Delivery,” continued Gennette.

Asset Sale Gains

Asset sale gains for the third quarter of 2019 totaled $17 million pre-tax, or $13 million after-tax. This compares to the third quarter of 2018, when asset sale gains totaled $42 million pre-tax, or $31 million after-tax.

Asset sale gains for the 39 weeks ended November 2, 2019 totaled $67 million pre-tax, or $49 million after-tax. This compares to the 39 weeks ended November 3, 2018, when asset sale gains totaled $111 million pre-tax, or $84 million after-tax.

Updated Guidance

Macy’s, Inc. is updating its previously provided annual guidance. Highlights of these revisions include:

 

Revised 2019 Annual Guidance

Prior 2019 Annual Guidance

Comparable sales

(owned plus licensed)

Down 1.5% to down 1.0%

Flat to up 1%

Comparable sales

(owned)

Approximately 20 basis points below comparable sales on an owned plus licensed basis

Flat to up 1%

Net sales

Down 2.5% to down 2.0%

Approximately flat

Adjusted Diluted earnings per share

$2.57 to $2.77

$2.85 to $3.05

Asset sale gains

Approximately $150 million (or $0.37 per share)

Approximately $100 million (or $0.25 per share)

Annual tax rate

23%

23%

Complete guidance can be found in the presentation posted on the company’s investor relations website at www.macysinc.com/investors.

Investor Day

Macy’s, Inc. will host an Investor Day at 8:00 a.m. ET on Wednesday, February 5, 2020, at the New York Stock Exchange. At that time, the management team will share details of the Macy’s, Inc. growth strategy and three-year plan.

Macy’s, Inc.’s webcast, along with the associated presentation, will be accessible to the media and general public via the company’s investor relations website.

About Macy’s, Inc.

Macy’s, Inc. is one of the nation’s premier retailers, with fiscal 2018 sales of $24.971 billion and approximately 130,000 employees. The company operates approximately 680 department stores under the nameplates Macy’s and Bloomingdale’s, and approximately 190 specialty stores that include Bloomingdale’s The Outlet, Bluemercury, and Macy’s Backstage. Macy’s, Inc. operates stores in 43 states, the District of Columbia, Guam and Puerto Rico, as well as macys.com, bloomingdales.com and bluemercury.com. Bloomingdale’s stores in Dubai and Kuwait are operated by Al Tayer Group LLC under license agreements. Macy’s, Inc. has corporate headquarters in Cincinnati, Ohio, and New York, New York.

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, the effect of federal tax reform and potential changes to trade policies, 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 potential for the incurrence of charges in connection with the impairment of intangible assets, including goodwill, 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 (November 21, 2019) at 8:00 a.m. ET. The webcast, along with the associated presentation, is accessible to the media and general public via the company’s investor relations website at www.macysinc.com/investors. Analysts and investors may call in on 1-888-254-3590, passcode 5793222. A replay of the conference call and slides 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 and Note 2)
(All amounts in millions except percentages and per share figures)

 

 

 

13 Weeks Ended

 

13 Weeks Ended

 

 

November 2, 2019

 

November 3, 2018

 

 

$

 

% to
Net sales

 

$

 

% to
Net sales

 

 

 

 

 

 

 

 

 

Net sales

 

$

5,173

 

 

 

 

$

5,404

 

 

 

 

 

 

 

 

 

 

 

 

Credit card revenues, net

 

183

 

 

3.5

%

 

185

 

 

3.4

%

 

 

 

 

 

 

 

 

 

Cost of sales

 

(3,106

)

 

(60.0

%)

 

(3,226

)

 

(59.7

%)

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

(2,202

)

 

(42.6

%)

 

(2,255

)

 

(41.7

%)

 

 

 

 

 

 

 

 

 

Gains on sale of real estate

 

17

 

 

0.3

%

 

42

 

 

0.8

%

 

 

 

 

 

 

 

 

 

Restructuring and other costs

 

(13

)

 

(0.2

%)

 

(3

)

 

(0.1

%)

 

 

 

 

 

 

 

 

 

Operating income

 

52

 

 

1.0

%

 

147

 

 

2.7

%

 

 

 

 

 

 

 

 

 

Benefit plan income, net

 

8

 

 

 

 

9

 

 

 

 

 

 

 

 

 

 

 

 

Settlement charges

 

(12

)

 

 

 

(23

)

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(48

)

 

 

 

(59

)

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

 

 

 

74

 

 

 

 

 

 

 

 

 

 

 

 

Federal, state and local income tax benefit (expense)

 

2

 

 

 

 

(12

)

 

 

 

 

 

 

 

 

 

 

 

Net income

 

2

 

 

 

 

62

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Macy's, Inc. shareholders

 

$

2

 

 

 

 

$

62

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to

Macy's, Inc. shareholders

 

$

0.01

 

 

 

 

$

0.20

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to
Macy's, Inc. shareholders

 

$

0.01

 

 

 

 

$

0.20

 

 

 

 

 

 

 

 

 

 

 

 

Average common shares:

 

 

 

 

 

 

 

 

Basic

 

309.9

 

 

 

 

308.1

 

 

 

Diluted

 

311.0

 

 

 

 

312.2

 

 

 

 

 

 

 

 

 

 

 

 

End of period common shares outstanding

 

309.0

 

 

 

 

307.2

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Financial Measures:

 

 

 

 

 

 

 

 

Gross Margin (Note 3)

 

$

2,067

 

 

40.0

%

 

$

2,178

 

 

40.3

%

Depreciation and amortization expense

 

$

252

 

 

 

 

$

248

 

 

 

 

MACY’S, INC.
Consolidated Statements of Income (Unaudited) (Note 1 and Note 2)
(All amounts in millions except percentages and per share figures)

 

 

 

39 Weeks Ended

 

39 Weeks Ended

 

 

November 2, 2019

 

November 3, 2018

 

 

$

 

% to
Net sales

 

$

 

% to
Net sales

 

 

 

 

 

 

 

 

 

Net sales

 

$

16,223

 

 

 

 

$

16,516

 

 

 

 

 

 

 

 

 

 

 

 

Credit card revenues, net

 

531

 

 

3.3

%

 

528

 

 

3.2

%

 

 

 

 

 

 

 

 

 

Cost of sales

 

(9,905

)

 

(61.1

%)

 

(9,927

)

 

(60.1

%)

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

(6,489

)

 

(40.0

%)

 

(6,501

)

 

(39.4

%)

 

 

 

 

 

 

 

 

 

Gains on sale of real estate

 

67

 

 

0.4

%

 

111

 

 

0.7

%

 

 

 

 

 

 

 

 

 

Impairment, restructuring and other costs

 

(16

)

 

(0.1

%)

 

(39

)

 

(0.2

%)

 

 

 

 

 

 

 

 

 

Operating income

 

411

 

 

2.5

%

 

688

 

 

4.2

%

 

 

 

 

 

 

 

 

 

Benefit plan income, net

 

23

 

 

 

 

31

 

 

 

 

 

 

 

 

 

 

 

 

Settlement charges

 

(12

)

 

 

 

(73

)

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(143

)

 

 

 

(187

)

 

 

 

 

 

 

 

 

 

 

 

Losses on early retirement of debt

 

 

 

 

 

(5

)

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

279

 

 

 

 

454

 

 

 

 

 

 

 

 

 

 

 

 

Federal, state and local income tax expense

 

(55

)

 

 

 

(96

)

 

 

 

 

 

 

 

 

 

 

 

Net income

 

224

 

 

 

 

358

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interest

 

 

 

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Macy's, Inc. shareholders

 

$

224

 

 

 

 

$

368

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to

Macy's, Inc. shareholders

 

$

0.72

 

 

 

 

$

1.20

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to
Macy's, Inc. shareholders

 

$

0.72

 

 

 

 

$

1.18

 

 

 

 

 

 

 

 

 

 

 

 

Average common shares:

 

 

 

 

 

 

 

 

Basic

 

309.6

 

 

 

 

307.5

 

 

 

Diluted

 

311.3

 

 

 

 

311.2

 

 

 

 

 

 

 

 

 

 

 

 

End of period common shares outstanding

 

309.0

 

 

 

 

307.2

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Financial Measures:

 

 

 

 

 

 

 

 

Gross Margin (Note 3)

 

$

6,318

 

 

38.9

%

 

$

6,589

 

 

39.9

%

Depreciation and amortization expense

 

$

725

 

 

 

 

$

718

 

 

 

 

MACY’S, INC.
Consolidated Balance Sheets (Unaudited) (Note 2)
(millions)

 

 

 

November 2,
2019

 

February 2,
2019

 

November 3,
2018

ASSETS:

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

301

 

 

$

1,162

 

 

$

736

 

Receivables

 

175

 

 

400

 

 

180

 

Merchandise inventories

 

7,256

 

 

5,263

 

 

7,147

 

Income tax receivable

 

1

 

 

 

 

10

 

Prepaid expenses and other current assets

 

568

 

 

620

 

 

594

 

Total Current Assets

 

8,301

 

 

7,445

 

 

8,667

 

 

 

 

 

 

 

 

Property and Equipment – net

 

6,558

 

 

6,637

 

 

6,572

 

Right of Use Assets

 

2,596

 

 

 

 

 

Goodwill

 

3,908

 

 

3,908

 

 

3,908

 

Other Intangible Assets – net

 

440

 

 

478

 

 

481

 

Other Assets

 

744

 

 

726

 

 

733

 

 

 

 

 

 

 

 

Total Assets

 

$

22,547

 

 

$

19,194

 

 

$

20,361

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY:

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Short-term debt

 

$

6

 

 

$

43

 

 

$

65

 

Merchandise accounts payable

 

3,427

 

 

1,655

 

 

3,381

 

Accounts payable and accrued liabilities

 

3,046

 

 

3,366

 

 

2,998

 

Income taxes

 

 

 

168

 

 

 

Total Current Liabilities

 

6,479

 

 

5,232

 

 

6,444

 

 

 

 

 

 

 

 

Long-Term Debt

 

4,677

 

 

4,708

 

 

5,469

 

Long-Term Lease Liabilities

 

2,819

 

 

 

 

 

Deferred Income Taxes

 

1,200

 

 

1,238

 

 

1,185

 

Other Liabilities

 

1,315

 

 

1,580

 

 

1,618

 

Shareholders' Equity:

 

 

 

 

 

 

Macy's, Inc.

 

6,057

 

 

6,436

 

 

5,667

 

Noncontrolling interest

 

 

 

 

 

(22

)

Total Shareholders' Equity

 

6,057

 

 

6,436

 

 

5,645

 

 

 

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

22,547

 

 

$

19,194

 

 

$

20,361

 

 

MACY’S, INC.
Consolidated Statements of Cash Flows (Unaudited) (Note 2 and Note 4)
(millions)

 

 

 

39 Weeks
Ended

 

39 Weeks
Ended

 

 

November 2,
2019

 

November 3,
2018

Cash flows from operating activities:

 

 

 

 

Net income

 

$

224

 

 

$

358

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Impairment, restructuring and other costs

 

16

 

 

39

 

Settlement charges

 

12

 

 

73

 

Depreciation and amortization

 

725

 

 

718

 

Benefit plans

 

23

 

 

25

 

Stock-based compensation expense

 

40

 

 

48

 

Gains on sale of real estate

 

(67

)

 

(111

)

Deferred income taxes

 

25

 

 

62

 

Amortization of financing costs and premium on acquired debt

 

1

 

 

(5

)

Changes in assets and liabilities:

 

 

 

 

Decrease in receivables

 

224

 

 

163

 

Increase in merchandise inventories

 

(1,993

)

 

(1,969

)

Decrease in prepaid expenses and other current assets

 

13

 

 

16

 

Increase in merchandise accounts payable

 

1,648

 

 

1,664

 

Decrease in accounts payable and accrued liabilities

 

(470

)

 

(221

)

Decrease in current income taxes

 

(168

)

 

(301

)

Change in other assets and liabilities

 

(81

)

 

(130

)

Net cash provided by operating activities

 

172

 

 

429

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchase of property and equipment

 

(623

)

 

(468

)

Capitalized software

 

(189

)

 

(209

)

Disposition of property and equipment

 

73

 

 

121

 

Other, net

 

10

 

 

7

 

Net cash used by investing activities

 

(729

)

 

(549

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Debt issuance costs

 

(3

)

 

 

Debt repaid

 

(42

)

 

(361

)

Dividends paid

 

(349

)

 

(347

)

Increase in outstanding checks

 

49

 

 

44

 

Acquisition of treasury stock

 

(1

)

 

 

Issuance of common stock

 

6

 

 

41

 

Proceeds from noncontrolling interest

 

 

 

7

 

Net cash used by financing activities

 

(340

)

 

(616

)

 

 

 

 

 

Net decrease in cash, cash equivalents and restricted cash

 

(897

)

 

(736

)

Cash, cash equivalents and restricted cash beginning of period

 

1,248

 

 

1,513

 

 

 

 

 

 

Cash, cash equivalents and restricted cash end of period

 

$

351

 

 

$

777

 

 

MACY’S, INC.

Consolidated Financial Statements (Unaudited)

Notes:

 

 

 

(1)

 

As a result of the seasonal nature of the retail business, the results of operations for the 13 and 39 weeks ended November 2, 2019 and November 3, 2018 (which do not include the Christmas season) are not necessarily indicative of such results for the fiscal year.

 

 

 

(2)

 

The results for the 13 and 39 weeks ended November 2, 2019 reflect the adoption of Accounting Standards Update 2016-02 (ASU 2016-02), Leases, on February 3, 2019, utilizing the modified retrospective approach which allowed for transition in the period of adoption.

 

 

 

(3)

 

Gross margin is defined as net sales less cost of sales.

 

 

 

(4)

 

Restricted cash of $50 million and $41 million have been included with cash and cash equivalents for the 39 weeks ended November 2, 2019 and November 3, 2018, respectively. Further, reclassifications were made to certain prior period's amounts to conform with the classifications of such amounts in the most recent period.

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 and changes in comparable sales on an owned plus licensed basis adjusted for the 53 rd week calendar shift, which include adjusting for 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. Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure which the company believes provides meaningful information about its operational efficiency by excluding the impact of changes in tax law and structure, debt levels and capital investment. In addition, management believes that excluding certain items from EBITDA, net income and diluted earnings per share attributable to Macy’s, Inc. shareholders that are not associated with the company’s core operations and that may vary substantially in frequency and magnitude from period-to-period provides useful supplemental measures that assist in evaluating the company’s ability to generate earnings 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, except that 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 excluding certain items because the timing and amount of excluded items 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 or 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
(All amounts in millions except percentages and per share figures)

 

Changes in Comparable Sales

 

 

 

13 Weeks Ended
November 2,
2019

 

39 Weeks Ended
November 2,
2019

 

 

 

 

 

Decrease in comparable sales on an owned basis (Note 5)

 

(3.9

)%

 

(1.0

)%

 

 

 

 

 

Comparable sales growth impact of departments licensed to third parties (Note 6)

 

0.4

%

 

0.2

%

 

 

 

 

 

Decrease in comparable sales on an owned plus licensed basis

 

(3.5

)%

 

(0.8

)%

 

 

 

13 Weeks Ended
November 3,
2018

 

39 Weeks Ended
November 3,
2018

 

 

 

 

 

Increase in comparable sales on an owned basis (Note 5)

 

3.1

%

 

2.4

%

 

 

 

 

 

Comparable sales growth impact of departments licensed to third parties (Note 6)

 

0.2

%

 

0.3

%

 

 

 

 

 

Increase in comparable sales on an owned plus licensed basis

 

3.3

%

 

2.7

%

 

 

 

 

 

Impact of 53 rd Week Shifted Calendar

 

0.8

%

 

(0.1

)%

 

 

 

 

 

53 rd Week Shifted Calendar comparable sales on an owned plus licensed basis (Note 7)

 

4.1

%

 

2.6

%

Notes:

 

 

 

(5)

 

Represents the period-to-period percentage 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. Stores impacted by a natural disaster or undergoing significant expansion or shrinkage remain in the comparable sales calculation unless the store, or material portion of the store, is closed for a significant period of time. Definitions and calculations of comparable sales may differ among companies in the retail industry.

 

 

 

(6)

 

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 amounts of commissions earned on sales of departments licensed to third parties are not material to its net sales for the periods presented.

 

 

 

(7)

 

Represents comparable sales on an owned plus licensed basis that incorporates a shift of the company's fiscal 2017 calendar to align with fiscal 2018 on a like-for-like basis as a result of the 53 rd week in fiscal 2017.

 

 

 

MACY’S, INC.

Important Information Regarding Non-GAAP Financial Measures

Earnings before Interest, Taxes, Depreciation and Amortization, Net Income and Diluted Earnings Per Share Attributable to Macy’s, Inc. Shareholders, Excluding Certain Items

Non-GAAP financial measures, excluding certain items below, are reconciled to the most directly comparable GAAP measure as follows:

Adjusted EBITDA

 

 

13 Weeks Ended

 

13 Weeks Ended

 

 

November 2, 2019

 

November 3, 2018

 

 

 

 

 

Net income attributable to Macy's, Inc. shareholders

 

$

2

 

 

$

62

 

Interest expense, net

 

48

 

 

59

 

Federal, state and local income tax expense (benefit)

 

(2

)

 

12

 

Depreciation and amortization

 

252

 

 

248

 

EBITDA

 

300

 

 

381

 

Restructuring and other costs

 

13

 

 

3

 

Settlement charges

 

12

 

 

23

 

Adjusted EBITDA

 

$

325

 

 

$

407

 

 

 

 

39 Weeks Ended

 

39 Weeks Ended

 

 

November 2, 2019

 

November 3, 2018

 

 

 

 

 

Net income attributable to Macy's, Inc. shareholders

 

$

224

 

 

$

368

 

Interest expense, net

 

143

 

 

187

 

Losses on early retirement of debt

 

 

 

5

 

Federal, state and local income tax expense

 

55

 

 

96

 

Depreciation and amortization

 

725

 

 

718

 

EBITDA

 

1,147

 

 

1,374

 

Impairment, restructuring and other costs (Note 8)

 

16

 

 

31

 

Settlement charges

 

12

 

 

73

 

Adjusted EBITDA

 

$

1,175

 

 

$

1,478

 

 

Note 8: The above pre-tax adjustments for the 39 weeks ended November 3, 2018 exclude impairment, restructuring and other costs attributable to the noncontrolling interest shareholder of $8 million.

MACY’S, INC.

Important Information Regarding Non-GAAP Financial Measures

Adjusted Net Income and Adjusted Diluted Earnings Per Share Attributable to Macy’s, Inc. Shareholders

 

 

13 Weeks Ended

 

13 Weeks Ended

 

 

November 2, 2019

 

November 3, 2018

 

 

 

 

 

 

 

 

 

 

 

Net Income
Attributable to
Macy's, Inc.
Shareholders

 

Diluted
Earnings
Per Share

 

Net Income
Attributable to
Macy's, Inc.
Shareholders

 

Diluted
Earnings
Per Share

As reported

 

$

2

 

 

$

0.01

 

 

$

62

 

 

$

0.20

 

Restructuring and other costs

 

13

 

 

0.04

 

 

3

 

 

0.01

 

Settlement charges

 

12

 

 

0.04

 

 

23

 

 

0.08

 

Income tax impact of certain items identified above

 

(6

)

 

(0.02

)

 

(5

)

 

(0.02

)

As adjusted

 

$

21

 

 

$

0.07

 

 

$

83

 

 

$

0.27

 

 

 

 

39 Weeks Ended

 

39 Weeks Ended

 

 

November 2, 2019

 

November 3, 2018

 

 

 

 

 

 

 

 

 

 

 

Net Income
Attributable to
Macy's, Inc.
Shareholders

 

Diluted
Earnings
Per Share

 

Net Income
Attributable to
Macy's, Inc.
Shareholders

 

Diluted
Earnings
Per Share

As reported

 

$

224

 

 

$

0.72

 

 

$

368

 

 

$

1.18

 

Impairment, restructuring and other costs (Note 9)

 

16

 

 

0.05

 

 

31

 

 

0.10

 

Settlement charges

 

12

 

 

0.04

 

 

73

 

 

0.23

 

Losses on early retirement of debt

 

 

 

 

 

5

 

 

0.02

 

Income tax impact of certain items identified above

 

(6

)

 

(0.02

)

 

(26

)

 

(0.08

)

As adjusted

 

$

246

 

 

$

0.79

 

 

$

451

 

 

$

1.45

 

 

Note 9: The above pre-tax adjustment for the 39 weeks ended November 3, 2018 exclude impairment, restructuring and other costs attributable to the noncontrolling interest shareholder of $8 million.

View source version on businesswire.com:https://www.businesswire.com/news/home/20191121005274/en/

CONTACT: Media – Blair Fasbender Rosenberg

646-429-6032

media@macys.com

Investors – Mike McGuire

513-579-7780

investors@macys.com

KEYWORD: NEW YORK OHIO UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: CATALOG HOME GOODS FASHION RETAIL DEPARTMENT STORES

SOURCE: Macy’s, Inc.

Copyright Business Wire 2019.

PUB: 11/21/2019 06:55 AM/DISC: 11/21/2019 06:55 AM

http://www.businesswire.com/news/home/20191121005274/en