(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
Item 2.02. | Results of Operations and Financial Condition. | |||||||||||||||||||
On November 19, 2020, Macy’s, Inc. ("Macy’s") issued a press release announcing Macy’s financial condition, results of operations and cash flows as of and for the 13 and 39 weeks ended October 31, 2020. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Macy’s reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). The press release referred to above contains non-GAAP financial measures of changes in comparable sales on an owned plus licensed basis, earnings (loss) before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA, adjusted net income (loss) and adjusted diluted earnings (loss) per share. Adjusted EBITDA, adjusted net income (loss) and adjusted diluted earnings (loss) per share exclude impairment, restructuring and other costs, settlement charges and financing costs. A section has been included at the end of the press release that contains important additional information regarding these non-GAAP financial measures including reconciliation to the most directly comparable GAAP financial measure. | ||||||||||||||||||||
Item 9.01. | Financial Statements and Exhibits. | |||||||||||||||||||
(d) | Exhibits | |||||||||||||||||||
99.1 | ||||||||||||||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL Document) |
| |||||
MACY'S, INC. | |||||
SIGNATURE | |||||
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. | |||||
MACY'S, INC. | |||||
Dated: November 19, 2020 | By: /s/ Paul Griscom | ||||
Name: Paul Griscom | |||||
Title: Senior Vice President and Controller |
Third Quarter | Year to Date | |||||||||||||
(All amounts in millions, except per share figures) | 2020 | 2019 | 2020 | 2019 | ||||||||||
Net sales | $ | 3,990 | $ | 5,173 | $ | 10,566 | $ | 16,223 | ||||||
Net income (loss) (a) (b) | $ | (91) | $ | 2 | $ | (4,104) | $ | 224 | ||||||
Earnings (loss) before interest, taxes, depreciation and amortization (a) (b) | $ | 113 | $ | 300 | $ | (4,182) | $ | 1,147 | ||||||
Diluted earnings (loss) per share (a) (b) | $ | (0.29) | $ | 0.01 | $ | (13.20) | $ | 0.72 | ||||||
Adjusted Net income (loss) (b) | $ | (60) | $ | 21 | $ | (941) | $ | 246 | ||||||
Adjusted Earnings (loss) before interest, taxes, depreciation and amortization (b) | $ | 159 | $ | 325 | $ | (672) | $ | 1,175 | ||||||
Adjusted Diluted earnings (loss) per share (b) | $ | (0.19) | $ | 0.07 | $ | (3.03) | $ | 0.79 |
13 Weeks Ended | 13 Weeks Ended | |||||||||||||||||||||||||
October 31, 2020 | November 2, 2019 | |||||||||||||||||||||||||
$ | % to Net sales | $ | % to Net sales | |||||||||||||||||||||||
Net sales | $ | 3,990 | $ | 5,173 | ||||||||||||||||||||||
Credit card revenues, net | 195 | 4.9 | % | 183 | 3.5 | % | ||||||||||||||||||||
Cost of sales | (2,569) | (64.4 | %) | (3,106) | (60.0 | %) | ||||||||||||||||||||
Selling, general and administrative expenses | (1,726) | (43.3 | %) | (2,202) | (42.6 | %) | ||||||||||||||||||||
Gains on sale of real estate | 3 | 0.1 | % | 17 | 0.3 | % | ||||||||||||||||||||
Restructuring, impairment and other costs | (20) | (0.5 | %) | (13) | (0.2 | %) | ||||||||||||||||||||
Operating income (loss) | (127) | (3.2 | %) | 52 | 1.0 | % | ||||||||||||||||||||
Benefit plan income, net | 16 | 8 | ||||||||||||||||||||||||
Settlement charges | (26) | (12) | ||||||||||||||||||||||||
Interest expense, net | (80) | (48) | ||||||||||||||||||||||||
Income (loss) before income taxes | (217) | — | ||||||||||||||||||||||||
Federal, state and local income tax benefit (Note 3) | 126 | 2 | ||||||||||||||||||||||||
Net income (loss) | $ | (91) | $ | 2 | ||||||||||||||||||||||
Basic earnings (loss) per share | $ | (0.29) | $ | 0.01 | ||||||||||||||||||||||
Diluted earnings (loss) per share | $ | (0.29) | $ | 0.01 | ||||||||||||||||||||||
Average common shares: | ||||||||||||||||||||||||||
Basic | 311.2 | 309.9 | ||||||||||||||||||||||||
Diluted | 311.2 | 311.0 | ||||||||||||||||||||||||
End of period common shares outstanding | 310.3 | 309.0 | ||||||||||||||||||||||||
Supplemental Financial Measures: | ||||||||||||||||||||||||||
Gross Margin (Note 4) | $ | 1,421 | 35.6 | % | $ | 2,067 | 40.0 | % | ||||||||||||||||||
Depreciation and amortization expense | $ | 250 | $ | 252 |
39 Weeks Ended | 39 Weeks Ended | |||||||||||||||||||||||||
October 31, 2020 | November 2, 2019 | |||||||||||||||||||||||||
$ | % to Net sales | $ | % to Net sales | |||||||||||||||||||||||
Net sales | $ | 10,566 | $ | 16,223 | ||||||||||||||||||||||
Credit card revenues, net | 494 | 4.7 | % | 531 | 3.3 | % | ||||||||||||||||||||
Cost of sales | (7,788) | (73.7 | %) | (9,905) | (61.1 | %) | ||||||||||||||||||||
Selling, general and administrative expenses | (4,723) | (44.7 | %) | (6,489) | (40.0 | %) | ||||||||||||||||||||
Gains on sale of real estate | 20 | 0.2 | % | 67 | 0.4 | % | ||||||||||||||||||||
Impairment, restructuring and other costs (Note 2) | (3,445) | (32.6 | %) | (16) | (0.1 | %) | ||||||||||||||||||||
Operating income (loss) | (4,876) | (46.1 | %) | 411 | 2.5 | % | ||||||||||||||||||||
Benefit plan income, net | 37 | 23 | ||||||||||||||||||||||||
Settlement charges | (65) | (12) | ||||||||||||||||||||||||
Interest expense, net | (196) | (143) | ||||||||||||||||||||||||
Financing costs | (4) | — | ||||||||||||||||||||||||
Income (loss) before income taxes | (5,104) | 279 | ||||||||||||||||||||||||
Federal, state and local income tax benefit (expense) (Note 3) | 1,000 | (55) | ||||||||||||||||||||||||
Net income (loss) | $ | (4,104) | $ | 224 | ||||||||||||||||||||||
Basic earnings (loss) per share | $ | (13.20) | $ | 0.72 | ||||||||||||||||||||||
Diluted earnings (loss) per share | $ | (13.20) | $ | 0.72 | ||||||||||||||||||||||
Average common shares: | ||||||||||||||||||||||||||
Basic | 311.0 | 309.6 | ||||||||||||||||||||||||
Diluted | 311.0 | 311.3 | ||||||||||||||||||||||||
End of period common shares outstanding | 310.3 | 309.0 | ||||||||||||||||||||||||
Supplemental Financial Measures: | ||||||||||||||||||||||||||
Gross Margin (Note 4) | $ | 2,778 | 26.3 | % | $ | 6,318 | 38.9 | % | ||||||||||||||||||
Depreciation and amortization expense | $ | 722 | $ | 725 |
October 31, 2020 | February 1, 2020 | November 2, 2019 | ||||||||||||||||||
ASSETS: | ||||||||||||||||||||
Current Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 1,551 | $ | 685 | $ | 301 | ||||||||||||||
Receivables | 185 | 409 | 175 | |||||||||||||||||
Merchandise inventories | 5,144 | 5,188 | 7,256 | |||||||||||||||||
Prepaid expenses and other current assets | 477 | 528 | 569 | |||||||||||||||||
Total Current Assets | 7,357 | 6,810 | 8,301 | |||||||||||||||||
Property and Equipment – net | 6,122 | 6,633 | 6,558 | |||||||||||||||||
Right of Use Assets | 3,028 | 2,668 | 2,596 | |||||||||||||||||
Goodwill | 828 | 3,908 | 3,908 | |||||||||||||||||
Other Intangible Assets – net | 437 | 439 | 440 | |||||||||||||||||
Other Assets | 1,442 | 714 | 744 | |||||||||||||||||
Total Assets | $ | 19,214 | $ | 21,172 | $ | 22,547 | ||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY: | ||||||||||||||||||||
Current Liabilities: | ||||||||||||||||||||
Short-term debt | $ | 536 | $ | 539 | $ | 6 | ||||||||||||||
Merchandise accounts payable | 3,267 | 1,682 | 3,427 | |||||||||||||||||
Accounts payable and accrued liabilities | 2,848 | 3,448 | 3,046 | |||||||||||||||||
Income taxes | — | 81 | — | |||||||||||||||||
Total Current Liabilities | 6,651 | 5,750 | 6,479 | |||||||||||||||||
Long-Term Debt | 4,852 | 3,621 | 4,677 | |||||||||||||||||
Long-Term Lease Liabilities | 3,266 | 2,918 | 2,819 | |||||||||||||||||
Deferred Income Taxes | 917 | 1,169 | 1,200 | |||||||||||||||||
Other Liabilities | 1,285 | 1,337 | 1,315 | |||||||||||||||||
Shareholders' Equity | 2,243 | 6,377 | 6,057 | |||||||||||||||||
Total Liabilities and Shareholders’ Equity | $ | 19,214 | $ | 21,172 | $ | 22,547 |
39 Weeks Ended | 39 Weeks Ended | |||||||||||||
October 31, 2020 | November 2, 2019 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income (loss) | $ | (4,104) | $ | 224 | ||||||||||
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: | ||||||||||||||
Impairment, restructuring and other costs | 3,445 | 16 | ||||||||||||
Settlement charges | 65 | 12 | ||||||||||||
Depreciation and amortization | 722 | 725 | ||||||||||||
Benefit plans | 36 | 23 | ||||||||||||
Stock-based compensation expense | 21 | 40 | ||||||||||||
Gains on sale of real estate | (20) | (67) | ||||||||||||
Deferred income taxes | (270) | 25 | ||||||||||||
Amortization of financing costs and premium on acquired debt | 11 | 1 | ||||||||||||
Changes in assets and liabilities: | ||||||||||||||
Decrease in receivables | 223 | 224 | ||||||||||||
(Increase) decrease in merchandise inventories | 34 | (1,993) | ||||||||||||
Decrease in prepaid expenses and other current assets | 29 | 13 | ||||||||||||
Increase in merchandise accounts payable | 1,612 | 1,648 | ||||||||||||
Decrease in accounts payable and accrued liabilities | (598) | (470) | ||||||||||||
Decrease in current income taxes | (818) | (168) | ||||||||||||
Change in other assets and liabilities | (144) | (81) | ||||||||||||
Net cash provided by operating activities | 244 | 172 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||
Purchase of property and equipment | (290) | (623) | ||||||||||||
Capitalized software | (96) | (189) | ||||||||||||
Disposition of property and equipment | 39 | 73 | ||||||||||||
Other, net | 33 | 10 | ||||||||||||
Net cash used by investing activities | (314) | (729) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||
Debt issued | 2,780 | — | ||||||||||||
Debt issuance costs | (102) | (3) | ||||||||||||
Debt repaid | (1,508) | (42) | ||||||||||||
Dividends paid | (117) | (349) | ||||||||||||
Increase (decrease) in outstanding checks | (90) | 49 | ||||||||||||
Acquisition of treasury stock | — | (1) | ||||||||||||
Issuance of common stock | — | 6 | ||||||||||||
Net cash provided (used) by financing activities | 963 | (340) | ||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 893 | (897) | ||||||||||||
Cash, cash equivalents and restricted cash beginning of period | 731 | 1,248 | ||||||||||||
Cash, cash equivalents and restricted cash end of period | $ | 1,624 | $ | 351 |
13 Weeks Ended | 39 Weeks Ended | |||||||||||||
October 31, 2020 | October 31, 2020 | |||||||||||||
Decrease in comparable sales on an owned basis (Note 6) | (21.0) | % | (33.9) | % | ||||||||||
Comparable sales growth impact of departments licensed to third parties (Note 7) | 0.8 | % | 0.1 | % | ||||||||||
Decrease in comparable sales on an owned plus licensed basis | (20.2) | % | (33.8) | % | ||||||||||
13 Weeks Ended | 39 Weeks Ended | |||||||||||||
November 2, 2019 | November 2, 2019 | |||||||||||||
Decrease in comparable sales on an owned basis (Note 6) | (3.9) | % | (1.0) | % | ||||||||||
Comparable sales growth impact of departments licensed to third parties (Note 7) | 0.4 | % | 0.2 | % | ||||||||||
Decrease in comparable sales on an owned plus licensed basis | (3.5) | % | (0.8) | % |
Notes: | |||||
(6) | 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. No stores have been excluded as a result of the COVID-19 pandemic. Definitions and calculations of comparable sales may differ among companies in the retail industry. | ||||
(7) | 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. |
13 Weeks Ended | 13 Weeks Ended | |||||||||||||
October 31, 2020 | November 2, 2019 | |||||||||||||
Net income (loss) | $ | (91) | $ | 2 | ||||||||||
Interest expense, net | 80 | 48 | ||||||||||||
Federal, state and local income tax benefit | (126) | (2) | ||||||||||||
Depreciation and amortization | 250 | 252 | ||||||||||||
EBITDA | 113 | 300 | ||||||||||||
Restructuring, impairment and other costs | 20 | 13 | ||||||||||||
Settlement charges | 26 | 12 | ||||||||||||
Adjusted EBITDA | $ | 159 | $ | 325 |
39 Weeks Ended | 39 Weeks Ended | |||||||||||||
October 31, 2020 | November 2, 2019 | |||||||||||||
Net income (loss) | $ | (4,104) | $ | 224 | ||||||||||
Interest expense, net | 196 | 143 | ||||||||||||
Financing costs | 4 | — | ||||||||||||
Federal, state and local income tax expense (benefit) | (1,000) | 55 | ||||||||||||
Depreciation and amortization | 722 | 725 | ||||||||||||
EBITDA | (4,182) | 1,147 | ||||||||||||
Impairment, restructuring and other costs | 3,445 | 16 | ||||||||||||
Settlement charges | 65 | 12 | ||||||||||||
Adjusted EBITDA | $ | (672) | $ | 1,175 |
13 Weeks Ended | 13 Weeks Ended | |||||||||||||||||||||||||
October 31, 2020 | November 2, 2019 | |||||||||||||||||||||||||
Net Income (Loss) | Diluted Earnings (Loss) Per Share | Net Income | Diluted Earnings Per Share | |||||||||||||||||||||||
As reported | $ | (91) | $ | (0.29) | $ | 2 | $ | 0.01 | ||||||||||||||||||
Restructuring, impairment and other costs | 20 | 0.06 | 13 | 0.04 | ||||||||||||||||||||||
Settlement charges | 26 | 0.09 | 12 | 0.04 | ||||||||||||||||||||||
Income tax impact of certain items identified above | (15) | (0.05) | (6) | (0.02) | ||||||||||||||||||||||
As adjusted | $ | (60) | $ | (0.19) | $ | 21 | $ | 0.07 |
39 Weeks Ended | 39 Weeks Ended | |||||||||||||||||||||||||
October 31, 2020 | November 2, 2019 | |||||||||||||||||||||||||
Net Income (Loss) | Diluted Earnings (Loss) Per Share | Net Income | Diluted Earnings Per Share | |||||||||||||||||||||||
As reported | $ | (4,104) | $ | (13.20) | $ | 224 | $ | 0.72 | ||||||||||||||||||
Impairment, restructuring and other costs | 3,445 | 11.08 | 16 | 0.05 | ||||||||||||||||||||||
Settlement charges | 65 | 0.21 | 12 | 0.04 | ||||||||||||||||||||||
Financing costs | 4 | 0.01 | — | — | ||||||||||||||||||||||
Income tax impact of certain items identified above | (351) | (1.13) | (6) | (0.02) | ||||||||||||||||||||||
As adjusted | $ | (941) | $ | (3.03) | $ | 246 | $ | 0.79 |
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