Macy’s Inc. loss narrowed during the second quarter as locations began to reopen from their COVID- 19 induced lockdowns. The Cincinnati-based department store chain lost $431 million, or an adjusted 81 cents per share, as revenue sank 36% year-over-year to $3.56 billion. The results outpaced the $1.77 per share loss and $3.47 billion of revenue that Wall Street analysts surveyed by Refintiv were anticipating. Macy’s lost $3.58 billion during the previous quarter.

“Restarting our stores was our top priority, and we successfully accomplished that while also ensuring that our digital business remained strong,” CEO Jeff Gennette said in a statement. “We are encouraged by our second quarter performance; however, we continue to approach the back half of the year conservatively.”

A faster-than-expected recovery of in-store sales and continued strength in digital sales resulted in comparable sales falling 35% on both an owned basis and owned plus licensed basis. Digital sales rose 53% versus a year ago. Strong sales resulted in inventory falling 29% from a year ago, which left the company in a “clean inventory position.” The company had $1.4 billion cash and access to $3 billion through an unused credit facility. Macy’s previously withdrew its guidance and did not provide an update due to the uncertainty caused by COVID-19.

On Wednesday, Macy’s Chief Executive Jeffrey Gennette said the number of planned store closures hasn’t changed, but in the next two years the company will open several smaller, free-standing Macy’s and Bloomingdale’s stores. “We continue to believe that the best malls in the country will thrive,” he said. “However, we also know that Macy’s and Bloomingdale’s have high potential off-mall and in smaller formats.”

The retailer also cut roughly 3,900 corporate jobs in June, following 2,000 corporate layoffs in February. This summer’s job cuts were expected to generate approximately $365 million in savings in the current fiscal year, and roughly $630 million annually going forward, in addition to the anticipated $1.5 billion in annual cost reductions the company announced in February.

Todd Horwitz Chief Strategist
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