Macy’s Delays Earnings on Virus Disruption, Sees Goodwill Charge

(Bloomberg) -- Macy’s Inc. said it will delay its quarterly earnings report due to “significant disruptions” in its operations from the coronavirus outbreak.

The retailer expects to take a charge for the period after a sharp decline in the shares triggered goodwill impairment, Macy’s said in a regulatory filing Thursday. It didn’t specify the size of the charge.

The disclosures underscore the severity of the trouble in retail, which has been upended by widespread store closures due to the Covid-19 pandemic. Neiman Marcus Group Inc. and J. Crew Group Inc. have filed for bankruptcy this week, while J.C. Penney Co. said Thursday it won’t make a $17 million interest payment.

Macy’s has said it’s pursuing additional sources of financing to meet its obligations as many of its brick-and-mortar locations remain closed. The company is mapping out a timeline for reopening, but it’s not yet clear how many shoppers will return.

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The company plans to report its first-quarter results on July 1, a significant delay from the mid-May date that was expected by the market. The company said in a separate statement that it will release preliminary results on May 21 and June 9. Its 10-Q form may not be filed until July 27, well after the June 11 deadline.

The process of closing out the quarter was slowed by the steps taken during the pandemic, including the furloughing of the majority of staff, Macy’s said.

“These conditions have caused significant disruptions to the company’s operations, including requiring key personnel to devote considerable time and resources to manage emerging issues impacting its business,” the company said.

‘Terrible’ Sales

Neil Saunders, managing director of GlobalData Retail, said Macy’s may be waiting for the situation to settle down before releasing their financial results.

“It’s going to be terrible in terms of sales,” he said. “There will be losses and the balance sheet will be punched into the red. That news is going to come out, but if they wait until July they can temper it with some other news.”

Craig Johnson, president of the consulting firm Customer Growth Partners LLC, said the delay may also have to do with the pending departure of the finance chief. Pushing back earnings gives them more time to sort through a complicated situation, he said.

“There is a rationale for this,” Johnson said. “They’re trying to provide information, and I call it a good-faith type of delay, and a little bit unconventional, but these are unconventional times.”

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