It was a given that Macy’s would take a substantial hit from Covid-19. Still, the size of that hit has been enormous.
Macy’s revealed today that it expects an operating loss between $905 million and $1.1 billion for the quarter through May 2. It’s an amount roughly equivalent to the operating profit it reported for all of 2019.
The pandemic has wiped out US retail traffic as stores have shuttered in state lockdowns and shoppers have pulled back on discretionary spending. In March, Macy’s closed all its stores, including its Bloomingdale’s and Bluemercury chains. It was operating 775 stores in the US, Puerto Rico, and Guam as of February. The company said it saw an uptick in e-commerce, but not enough to offset the losses from its closed stores.
Unlike many of its peers, Macy’s has said it’s not on the verge of bankruptcy, though it has had to take on additional debt to weather the downturn. On May 4 it began reopening stores and currently has roughly 190 Macy’s and Bloomingdale’s locations opened. It will reopen more as it can.
“We expect business to recover gradually,” CEO Jeff Gennette said in a statement. To avoid even bigger losses Macy’s will need that to mean sooner than later.