Republican leaders said on Thursday that the proposed border-adjusted tax won’t be part of negotiations on how to overhaul the U.S. tax code—delivering a victory to retailers’ groups that had strenuously opposed the measure. A statement Thursday from the so-called Big Six—which includes House Speaker Paul Ryan, Ways and Means chairman Kevin Brady, White House economic adviser Gary Cohn, Treasury Secretary Steven Mnuchin, Senate majority leader Mitch McConnell and Senate Finance Committee chairman Orrin Hatch—said due to the unknowns associated with the border-adjusted tax, the group “had decided to set this policy aside in order to advance tax reform.” Click Read More below for more of the story.
“Macy’s, Inc.’s fourth quarter results exceeded our expectations across all three of our brands, as we showed continued quarter-to-quarter sales performance improvements and returned to profitability,” said Jeff Gennette, chairman and chief executive officer. “Performance was driven by the home, beauty, jewelry and watch categories, growth in digital sales and by acquiring new customers. Our investments in digital innovation continued to pay off in the quarter, with digital sales up 21% from 2019. We anticipate annual digital sales to reach $10 billion within the next three years, and that digital will become an even more profitable contributor to our business. Additionally, we exited the quarter with a lower cost base and a strong liquidity position, supported by a $3 billion asset-based lending facility that we have not drawn upon.”
“We have made progress on the Polaris transformation strategy we introduced a year ago. We are accelerating several elements, including our focus on digital and omnichannel sales, improving customer value and building the infrastructure to support the growth of our business. We believe these actions will propel us to stronger performance in 2021 and beyond,” continued Gennette. “2020 was a year of unprecedented disruption. We are incredibly proud of our team for their hard work to make our customers feel safe and comfortable when shopping with us. And we are grateful to our brand partners for navigating through the pandemic with us.”
Fourth Quarter Highlights
The company’s omnichannel performance during the fourth quarter, driven by digital growth, creates a strong foundation for the future success of the Polaris strategy.
*Diluted earnings per share of $0.50 and Adjusted diluted earnings per share of $0.80 both exceeded the expectations for the quarter the company set in the fall.
*Comparable sales down 17.0% on an owned basis and down 17.1% on an owned plus licensed basis, a reflection of the continued challenges posed by the COVID pandemic. This performance beat the company’s expectations, driven by successful execution of the company’s holiday strategy, from off-price to luxury.
*Digital remained a growing and increasingly profitable platform. Sales grew 21% over fourth quarter 2019, with digital penetration at 44% of net sales.
*Approximately 25% of Macy’s digital sales were fulfilled from stores, including curbside pickup and same-day delivery.
*The company’s Star Rewards Loyalty program saw a 45% increase of its Bronze tier members in 2020, an essential part of its under-40 strategy.
*Net credit card revenue of $258 million up $19 million from fourth quarter 2019.
*Gross margin for the quarter was 33.7%, down 310 basis points from fourth quarter 2019.
*Delivery expense increased approximately 300 basis points from the fourth quarter of 2019, partially due to holiday surcharges.
*Inventory down 27% from fourth quarter 2019.
*Aggressively addressed slow-selling merchandise, reduced excess inventory levels and improved visual presentation in stores.
*Exited the year in a healthy inventory position.
*Selling, general and administrative (“SG&A”) expense of $2.0 billion; improved $464 million from fourth quarter 2019.
*SG&A as a percent of sales was 30.2%, generally in line with the fourth quarter of 2019.
*Illustrates efficient execution of expense management.
*Ended the year with a strong liquidity position and continued de-levering of the balance sheet.
*Approximately $1.7 billion in cash as of the end of the year, benefiting from efficiencies gained in working capital and a refocusing of capital spend on highest priority projects.
*Retained approximately $3 billion in untapped capacity in the company’s revolving asset-based credit facility.
*Repaid approximately $530 million of debt in January 2021 at maturity.
more detail at: https://www.macysinc.com/investors/news-events/press-releases/detail/1666/macys-inc-reports-fourth-quarter-and-full-year-2020