In mid-March, Macy's (NYSE: M) closed all of its approximately 775 stores, and transitioned to curbside pick-up of online orders, due to COVID-19. Management admits that the coronavirus hurt the company's fiscal first quarter (ended May 2, 2020) results, and it expects an even more significant effect on its second-quarter performance (ending Aug. 1, 2020).
While the pandemic and subsequent interruption to its operations caused the company to push back its first-quarter results announcement by about six weeks to July, Macy's did provide some preliminary information. Its sales fell by approximately 45% to around $3 billion, and management expects an operating loss of $905 million to $1.1 billion compared to a $203 million operating income in the year-ago period.
It started reopening stores a month ago, but management stated that the stores experienced a 50% year-over-year drop in demand over the first few weeks of May. With the lost sales during the quarter, inventory built up, and management will have to discount its goods to move the merchandise. This will hurt Macy's gross margin in the second quarter.
Source Fool.com