Macy’s, Inc. Reports First Quarter Earnings of 55 Cents Per Diluted Share, an Increase of 28% Over Last Year, on Comparable Sales Growth of 3.8%
Company increases dividend by 25%, raises share repurchase
authorization by $1.5 billion
Macy’s, Inc. (NYSE:M) today reported higher sales and earnings for the
first quarter of 2013, the 13-week period ended May 4, 2013. Based on
the ongoing momentum in our business, as well as confidence in our
future performance, the company also announced a 25 percent increase in
its dividend on common stock and a $1.5 billion increase in its share
repurchase authorization.
Earnings for the quarter were 55 cents per diluted share, an increase of
28 percent compared with 43 cents per diluted share in the same period
last year. Comparable sales grew by 3.8 percent from the first quarter
last year.
“The first quarter demonstrated our ability to continue to build on our
success over the past few years in growing sales and earnings. Based on
the effectiveness of strategies we have in place, we are confident that
momentum will continue going forward, which is reflected in the actions
we are announcing today to increase returns to our shareholders through
an increased dividend and share repurchases,” said Terry J. Lundgren,
Macy’s, Inc. chairman, president and chief executive officer.
“We are especially pleased with our first quarter sales and earnings
performance given the challenges we overcame in this period. These
included sustained, unseasonably cool spring weather in our northern
climate zones. In addition, we saw weakness among some of the most
budget-conscious consumers, as well as among our higher household income
Bloomingdale’s customers. We are continuing to pursue myriad new growth
opportunities within our time-tested M.O.M. strategies (My Macy’s,
Omnichannel and Magic Selling). These strategies continue to work
individually – and in unison – at Macy’s to meet the needs of customers
seeking fashion, quality, value and convenience,” Lundgren said.
Sales
Sales in the first quarter of 2013 totaled $6.387 billion, an increase
of 4.0 percent, compared with sales of $6.143 billion in the same period
last year. On a comparable sales basis, Macy’s, Inc.’s first quarter
sales were up 3.8 percent in 2013 over 2012.
Comparable sales include net sales from stores open at least one full
fiscal year, as well as online sales at macys.com and bloomingdales.com.
In the first quarter of 2013, Macy’s opened a new store in Victorville,
CA.
Operating Income
Macy’s, Inc.’s operating income totaled $435 million or 6.8 percent of
sales for the first quarter of 2013, compared with $391 million or 6.4
percent of sales for the same period in 2012.
Cash Flow
Net cash provided by operating activities was $298 million in the first
quarter of 2013, compared with $265 million in the first quarter last
year. Net cash used by investing activities in the first quarter of 2013
was $107 million, compared with $202 million a year ago. Net cash used
by financing activities in the first quarter of 2013 was $275 million.
In the first quarter of 2012, net cash used by financing activities was
$999 million, including $795 million used to repay debt.
The company repurchased approximately 8.4 million shares of its common
stock for a total of approximately $360 million in the first quarter of
2013.
Dividend Increase
Macy’s, Inc.’s board of directors has authorized an increase in the
quarterly dividend on Macy's common stock to 25 cents per share from the
current 20 cents per share. The new dividend will be payable July 1,
2013, to shareholders of record at the close of business on June 14,
2013.
This represents the third increase in the dividend in the past two
years. Over that period, the quarterly dividend has increased five-fold
from 5 cents per share to 25 cents per share.
Increased Share Repurchase Authorization
The board also has increased the company’s share repurchase
authorization by $1.5 billion. This brings the remaining authorization
outstanding, as of the end of the first quarter on May 4, 2013, after
giving effect to this increase, to approximately $2.6 billion, which the
company can use to purchase common shares from time to time in the open
market, in privately negotiated transactions or otherwise at any time
and from time to time without prior notice.
Since resuming its share repurchase program in August 2011, Macy’s, Inc.
had bought back approximately 60.3 million shares for approximately $2.2
billion through May 4, 2013.
Amended and Extended Credit Agreement
On May 10, 2013, the company entered into a new $1.5 billion, five-year
Credit Agreement that will mature on May 10, 2018. It replaces a
previous $1.5 billion facility maturing in June 2015. Given Macy’s,
Inc.’s strong results and cash flow, the company was able to improve
terms in the agreement while extending the maturity.
Looking Ahead
The company continues to expect comparable sales to grow by
approximately 3.5 percent in 2013. The company also reiterated its
guidance for earnings per diluted share in fiscal 2013 of $3.90 to $3.95.
Macy’s, Inc., with corporate offices in Cincinnati and New York, is one
of the nation’s premier retailers, with fiscal 2012 sales of $27.7
billion. The company operates about 840 department stores in 45 states,
the District of Columbia, Guam and Puerto Rico under the names of Macy’s
and Bloomingdale’s, as well as the macys.com and bloomingdales.com
websites. The company also operates 12 Bloomingdale’s Outlet stores.
Bloomingdale’s in Dubai is operated by Al Tayer Group LLC under a
license agreement.
All statements in this press release that are not statements of
historical fact are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements are
based upon the current beliefs and expectations of Macy’s management and
are subject to significant risks and uncertainties. Actual results could
differ materially from those expressed in or implied by the
forward-looking statements contained in this release because of a
variety of factors, including conditions to, or changes in the timing
of, proposed transactions, prevailing interest rates and non-recurring
charges, competitive pressures from specialty stores, general
merchandise stores, off-price and discount stores, manufacturers’
outlets, the Internet, mail-order catalogs and television shopping and
general consumer spending levels, including the impact of the
availability and level of consumer debt, the effect of weather and other
factors identified in documents filed by the company with the Securities
and Exchange Commission.
# # #
(NOTE: Additional information on Macy’s, Inc., including past news
releases, is available at www.macysinc.com/pressroom.
A webcast of Macy's, Inc.’s call with analysts and investors will be
held today (May 15) at 10:30 a.m. (ET). Macy’s, Inc.’s webcast is
accessible to the media and general public via the company's website at www.macysinc.com.
Analysts and investors may call in on 1-800-289-0544, passcode 1394396.
A replay of the conference call can be accessed on the website or by
calling 1-888-203-1112 (same passcode) about two hours after the
conclusion of the call.
Macy's, Inc. is scheduled to present at the Citi 2013 Global Consumer
Conference at 9:15 a.m. ET on Wednesday, May 29, in New York City. The
company also will be hosting a meeting for investors and analysts from 3
p.m. to 5:30 p.m. ET on Tuesday, June 11, in New York City. Media and
investors may access a live audio webcast of each presentation at www.macysinc.com/ir
beginning at 9:15 a.m on May 29 and 3 p.m. on June 11. The webcast of
both presentations will also be available for replay.)
|
|
MACY’S, INC.
Consolidated Statements of Income
(Unaudited) (Note 1)
(All amounts in millions except percentages and per share figures)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
|
|
|
13 Weeks Ended
|
|
|
|
|
|
May 4, 2013
|
|
|
April 28, 2012
|
|
|
|
|
|
$
|
|
% to Net sales
|
|
|
$
|
|
% to Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
$
|
6,387
|
|
|
|
|
|
$
|
6,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales (Note 2)
|
|
|
|
|
|
3,911
|
|
|
61.2
|
%
|
|
|
|
3,757
|
|
|
61.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
|
|
2,476
|
|
|
38.8
|
%
|
|
|
|
2,386
|
|
|
38.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
|
|
(2,041
|
)
|
|
(32.0
|
%)
|
|
|
|
(1,995
|
)
|
|
(32.4
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
435
|
|
|
6.8
|
%
|
|
|
|
391
|
|
|
6.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense – net
|
|
|
|
|
|
(97
|
)
|
|
|
|
|
|
(112
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
|
|
338
|
|
|
|
|
|
|
279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal, state and local income tax expense (Note 3)
|
|
|
|
|
|
(121
|
)
|
|
|
|
|
|
(98
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$
|
217
|
|
|
|
|
|
$
|
181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
|
|
$
|
.56
|
|
|
|
|
|
$
|
.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
|
|
$
|
.55
|
|
|
|
|
|
$
|
.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
388.2
|
|
|
|
|
|
|
417.1
|
|
|
|
Diluted
|
|
|
|
|
|
394.5
|
|
|
|
|
|
|
424.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period common shares outstanding
|
|
|
|
|
|
383.7
|
|
|
|
|
|
|
414.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
|
|
$
|
251
|
|
|
|
|
|
$
|
256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MACY’S, INC.
|
|
|
|
Consolidated Statements of Income (Unaudited)
|
|
|
|
Notes:
|
|
|
|
(1)
|
|
Because of the seasonal nature of the retail business, the results
of operations for the 13 weeks ended May 4, 2013 and April 28,
2012 (which do not include the Christmas season) are not
necessarily indicative of such results for the fiscal year.
|
|
|
|
(2)
|
|
Merchandise inventories are valued at the lower of cost or market
using the last-in, first-out (LIFO) retail inventory method.
Application of the LIFO retail inventory method did not result in
the recognition of any LIFO charges or credits affecting cost of
sales for the 13 weeks ended May 4, 2013 or April 28, 2012.
|
|
|
|
(3)
|
|
Federal, state and local income taxes differ from the federal
income tax statutory rate of 35%, principally because of the
effect of state and local taxes, including the settlement of
various tax issues and tax examinations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MACY’S, INC.
Consolidated Balance Sheets (Unaudited)
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May 4,
|
|
|
February 2,
|
|
|
April 28,
|
|
|
|
|
|
2013
|
|
|
2013
|
|
|
2012
|
ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
1,752
|
|
|
$
|
1,836
|
|
|
$
|
1,891
|
Receivables
|
|
|
|
|
|
295
|
|
|
|
371
|
|
|
|
277
|
Merchandise inventories
|
|
|
|
|
|
5,631
|
|
|
|
5,308
|
|
|
|
5,465
|
Prepaid expenses and other current assets
|
|
|
|
|
|
388
|
|
|
|
361
|
|
|
|
400
|
Total Current Assets
|
|
|
|
|
|
8,066
|
|
|
|
7,876
|
|
|
|
8,033
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and Equipment – net
|
|
|
|
|
|
8,063
|
|
|
|
8,196
|
|
|
|
8,359
|
Goodwill
|
|
|
|
|
|
3,743
|
|
|
|
3,743
|
|
|
|
3,743
|
Other Intangible Assets – net
|
|
|
|
|
|
552
|
|
|
|
561
|
|
|
|
589
|
Other Assets
|
|
|
|
|
|
616
|
|
|
|
615
|
|
|
|
553
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
|
|
$
|
21,040
|
|
|
$
|
20,991
|
|
|
$
|
21,277
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Short-term debt
|
|
|
|
|
$
|
124
|
|
|
$
|
124
|
|
|
$
|
313
|
Merchandise accounts payable
|
|
|
|
|
|
2,426
|
|
|
|
1,579
|
|
|
|
2,346
|
Accounts payable and accrued liabilities
|
|
|
|
|
|
2,134
|
|
|
|
2,610
|
|
|
|
2,225
|
Income taxes
|
|
|
|
|
|
30
|
|
|
|
355
|
|
|
|
104
|
Deferred income taxes
|
|
|
|
|
|
426
|
|
|
|
407
|
|
|
|
411
|
Total Current Liabilities
|
|
|
|
|
|
5,140
|
|
|
|
5,075
|
|
|
|
5,399
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Debt
|
|
|
|
|
|
6,797
|
|
|
|
6,806
|
|
|
|
6,644
|
Deferred Income Taxes
|
|
|
|
|
|
1,303
|
|
|
|
1,238
|
|
|
|
1,128
|
Other Liabilities
|
|
|
|
|
|
1,829
|
|
|
|
1,821
|
|
|
|
2,073
|
Shareholders’ Equity
|
|
|
|
|
|
5,971
|
|
|
|
6,051
|
|
|
|
6,033
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Shareholders’ Equity
|
|
|
|
|
$
|
21,040
|
|
|
$
|
20,991
|
|
|
$
|
21,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MACY’S, INC.
Consolidated Statements of Cash Flows
(Unaudited)
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended May 4, 2013
|
|
|
13 Weeks Ended April 28, 2012
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$
|
217
|
|
|
|
$
|
181
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
251
|
|
|
|
|
256
|
|
Stock-based compensation expense
|
|
|
|
|
|
17
|
|
|
|
|
21
|
|
Amortization of financing costs and premium on acquired debt
|
|
|
|
|
|
(2
|
)
|
|
|
|
(5
|
)
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
Decrease in receivables
|
|
|
|
|
|
78
|
|
|
|
|
95
|
|
Increase in merchandise inventories
|
|
|
|
|
|
(323
|
)
|
|
|
|
(348
|
)
|
(Increase) decrease in prepaid expenses and other current assets
|
|
|
|
|
|
(31
|
)
|
|
|
|
61
|
|
Decrease in other assets not separately identified
|
|
|
|
|
|
1
|
|
|
|
|
21
|
|
Increase in merchandise accounts payable
|
|
|
|
|
|
754
|
|
|
|
|
720
|
|
Decrease in accounts payable and accrued liabilities not
separately identified
|
|
|
|
|
|
(454
|
)
|
|
|
|
(450
|
)
|
Decrease in current income taxes
|
|
|
|
|
|
(325
|
)
|
|
|
|
(267
|
)
|
Increase (decrease) in deferred income taxes
|
|
|
|
|
|
68
|
|
|
|
|
(24
|
)
|
Increase in other liabilities not separately identified
|
|
|
|
|
|
47
|
|
|
|
|
4
|
|
Net cash provided by operating activities
|
|
|
|
|
|
298
|
|
|
|
|
265
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
|
|
|
(65
|
)
|
|
|
|
(168
|
)
|
Capitalized software
|
|
|
|
|
|
(50
|
)
|
|
|
|
(46
|
)
|
Disposition of property and equipment
|
|
|
|
|
|
4
|
|
|
|
|
23
|
|
Other, net
|
|
|
|
|
|
4
|
|
|
|
|
(11
|
)
|
Net cash used by investing activities
|
|
|
|
|
|
(107
|
)
|
|
|
|
(202
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Debt repaid
|
|
|
|
|
|
(5
|
)
|
|
|
|
(795
|
)
|
Dividends paid
|
|
|
|
|
|
(78
|
)
|
|
|
|
(83
|
)
|
Increase (decrease) in outstanding checks
|
|
|
|
|
|
44
|
|
|
|
|
(16
|
)
|
Acquisition of treasury stock
|
|
|
|
|
|
(336
|
)
|
|
|
|
(246
|
)
|
Issuance of common stock
|
|
|
|
|
|
100
|
|
|
|
|
141
|
|
Net cash used by financing activities
|
|
|
|
|
|
(275
|
)
|
|
|
|
(999
|
)
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
|
|
|
|
(84
|
)
|
|
|
|
(936
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
|
|
|
1,836
|
|
|
|
|
2,827
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
|
|
$
|
1,752
|
|
|
|
$
|
1,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
<div class="copyright">
Copyright Business Wire 2013
</div>