(Reuters) – Macy’s Inc <M.N> warned on Tuesday its business was not likely to return to normal until late next year, even as it saw better-than-expected sales from stores reopening after COVID-19 lockdowns were lifted across the United States.
The retail sector has been among the hardest hit by the economic effects of the health crisis, with J Crew, J.C. Penney and Neiman Marcus Group filing for bankruptcy in May. Macy’s reported nearly $1 billion in operating losses in its first quarter.
“We do not see a return to normalized trends until well into 2021 and possibly not until 2022,” interim Chief Financial Officer Felicia Williams said in an interview with Cowen analyst Oliver Chen.
As part of the Macy’s efforts to turn into a “smaller company” and cut costs, Williams said it was evaluating all its stores for potential closures.
The company also expects second-quarter gross profit margins to be worse than the previous quarter, as it offers heavy discounts to clear its spring apparel stock.
Macy’s, which has raised $4.5 billion to navigate through the fallout from the pandemic, said its preliminary sales fell over 45% to $3.02 billion in the quarter ended May 2, in line with the company’s prior forecast.
The company reported a preliminary adjusted net loss of $630 million, or $2.03 per share, in the same period, compared to a profit of $137 million, or 44 cents per share, a year earlier.
Macy’s has delayed reporting its full first-quarter results to July 1.
(Reporting by Uday Sampath in Bengaluru; Editing by Ramakrishnan M.)