Macy’s reported a preliminary Q1 2020 sales decline of 45%, to $3 billion, but the retailer expects to make a “gradual” recovery following a strong reopening effort. The company also has secured approximately $4.5 billion in new financing, including its previously announced $1.3 billion of 8.375% senior secured notes and a new $3.15 billion asset-based credit agreement.
“Our strong digital business sales trend continued throughout May, and it is encouraging to see that as we reopen a store, the digital business in that geography continues to be strong,” said Jeff Gennette, Chairman and CEO of Macy’s in a statement. “By June 1, we had approximately 450 stores reopened, with the majority opened in their full format. Our reopened stores are performing better than anticipated. Importantly, we are receiving positive feedback on the curbside pickup experience and our efforts to create a safe and welcoming shopping environment.”
Macy’s expects to sell through its seasonal merchandise in Q2 and “exit the second quarter in a clean inventory position,” according to Gennette. The company is positioning itself for the holiday season, which will be particularly crucial this year as Macy’s and other retailers try to make up for lost time.
Macy’s stock rose as much as 12% in after-hours trading following the announcement of new financing, but the rally fell to approximately 7% after the release of its Q1 projections, according to CNBC.