Share prices of US retailer Macy's surged on Tuesday after it announced that the reopening of its stores was met with a better-than-expected response from consumers. The company stated that it is regaining customers at its newly reopened stores at a much quicker pace than initially expected.
Macy's had shares surged by more than 12 percent in premarket trading on Tuesday, just a day after the company announced that it had acquired fresh financing to help it better manage its cash flows. Despite the positive response to is opening, Macy's chief financial officer, Felicia Williams, warned that its sales trends will likely not recover to pre-pandemic levels in the next two years. However, Williams added that the company should gradually recover and it will just be a matter of time.
For its first fiscal quarter, the company was forced to shut down its outlets for the majority of the period. In its preliminary financial results, which were released on Tuesday morning, the company revealed that it expects sales to drop by as much as 45 percent to around $3.02 billion from the $5.5 billion it reported over the same period last year.
Macy's predicts that its quarterly loss for the period ended May 2 could reach around $652 million, or roughly $2.10 per share. The figure is a stark contrast to the company's earnings of about $136 million, or 44 cents per share, during the same period last year. On an adjusted basis, excluding one-time items, the company expects to have losses of around $2.03 per share for its latest quarter.
Since June 1, roughly 450 of the company's outlets in North America have reopened. This week, Macy's had reopened some of its stores in New York City, including its iconic Bloomingdale's shop.
Macy's chief executive officer, Jeff Gennette, mentioned in a statement that the company's reopened stores are actually performing better than expected. He added that the company is confident of an upward trend throughout the next quarters as consumers once again visit its shops to buy its products.
Unlike in previous years, Gennette stated that the company is not expected a surge in sales during the coming holiday season. The retailer predicts that its fourth-quarter performance will likely be at par with its third quarter this year.
In terms of securing its finances to support its gradual recovery, Macy's had announced on Monday that it was able to secure around $4.5 billion in new financing. The company assured stakeholders that it now has sufficient liquidity for its immediate and long-term needs such as paying off debt maturities and purchasing new inventory.
