Macy’s is expected to post deep losses on Wednesday compared to a year ago, as the embattled department chain fights to keep its head above water due to the coronavirus pandemic.
The retail giant, which also owns Bloomingdale’s, said it plans to post first-quarter losses between $905m and $1.1bn, for the period to 2 May. That’s around a loss of $2.45 per share, according to Zacks, compared with net earnings of $136m, or 44 cents a share, a year ago.
Last week the company said it would shed 3,900 white-collar jobs, about a quarter of its corporate workforce, in a move it maintained would save it $630m a year.
Bricks-and-Mortar retailers, such as Macy’s, have struggled to compete with the leaner costs of online rivals for years, long before facing the current health emergency.
Closing stores and cutting jobs
Macy’s stores closed its stores on 18 March due to lockdown measures caused by the health crisis, and some began reopening on 4 May, as local restrictions aimed at preventing the spread of coronavirus were removed.
However, during that period it permanently shut 125 stores — about a fifth of its total — and shed a further 2,000 posts after a disappointing holiday season.
Earlier this month, Macy’s announced it had raised $4.5bn in new financing to help it weather the crisis, and posted preliminary first-quarter results.
“While the reopening of our stores is going well, we do anticipate a gradual recovery of business, and we are taking action to align our cost base with our anticipated lower sales,” said Macy’s chief executive Jeff Gennette in a statement last week.
She added: “We know that we will be a smaller company for the foreseeable future, and our cost base will continue to reflect that moving forward.”
Department store rivals such as Neiman Marcus, J.C. Penney and Stage Stores have filed for bankruptcy during the pandemic. The health chain GNC Holdings filed for bankruptcy protection last week, and plans to shut hundreds of stores permanently.
Macy’s shares closed 7% lower on Friday at $6.02, down around 63% this year.