PPG Industries Inc
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Materials : Chemicals | Large Cap Blend
Company profile

PPG Industries, Inc. manufactures and distributes a range of coatings and specialty materials. The Company has two segments: Performance Coatings and Industrial Coatings. The Performance Coatings segment includes the refinish, aerospace, protective and marine, architectural businesses. The Industrial Coatings segment includes the automotive original equipment manufacturer (OEM), industrial coatings, packaging coatings, coatings services and specialty coatings and materials businesses. The Company's brands include PPG, GLIDDEN, COMEX, OLYMPIC, DULUX, SIKKENS, PPG PITTSBURGH PAINTS, MULCO, FLOOD, LIQUID NAILS, SICO, RENNER, TAUBMANS, WHITE KNIGHT, BRISTOL, HOMAX, DEKORAL, TRILAK, GORI, and BONDEX, among others. It also provides pavement markings and traffic safety solutions with products, including traffic paint, hot-applied and preformed thermoplastics, raised pavement markers and intelligent transportation systems.

Postmarket

Last Trade
Delayed
$168.78
0.00 (0.00%)
Bid
--
Ask
--
B/A Size
--

Market Hours

Closing Price
$168.78
Day's Change
1.37 (0.82%)
Bid
--
Ask
--
B/A Size
--
Day's High
169.94
Day's Low
165.90
Volume
(Average)
Volume:
2,069,116

10-day average volume:
2,187,350
2,069,116

Macy's, Inc. Reports Fourth Quarter and Full-Year 2020 Results

6:55 am ET February 23, 2021 (BusinessWire) Print

--Polaris strategy positions company for growth in sales, profitability and free cash flow, with a focus on improving the customer omnichannel experience

Macy's, Inc. (NYSE: M) today reported results for the fourth quarter and fiscal 2020.

"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.

Polaris Strategy Update

"The Polaris strategy proved to be a critical enabler of our performance in 2020, allowing us to adapt and innovate with agility during the pandemic. Early actions guided by Polaris helped us broaden fashion categories, including home, beauty and casual apparel, and improve the digital experience. Additionally, the cost controls we committed to in February were key in helping us weather the pandemic. When we needed to make hard choices on our investments, Polaris gave us the clarity to focus first on the areas most critical to growth," concluded Gennette.

The company is updating its Polaris strategy to accelerate growth as a digitally led, omnichannel retailer while improving profitability and returning to cash flow growth.

2021 Guidance

Macy's, Inc. anticipates 2021 as a recovery and rebuilding year as the company sets a foundation for growth. The company's annual guidance contemplates continued pandemic-related challenges in the spring season with momentum building in the back half of 2021.

                     Fiscal 2021
----------------------------------- -----------------
Net sales                           $19.75B - $20.75B
----------------------------------- -----------------
Adjusted diluted earnings per share     $0.40 - $0.90
----------------------------------- -----------------

Conference Call and Webcasts

A webcast of Macy's, Inc.'s call with analysts and investors to report its fourth quarter and fiscal year 2020 sales and earnings will be held today (February 23, 2021) at 8:00 a.m. ET. Macy's, Inc.'s webcast, along with the associated presentation, is accessible to the media and general public via the company's website at www.macysinc.com/investors. Analysts and investors may call in on 1-800-458-4121, passcode 4263363. A replay of the conference call and slides can be accessed on the website or by calling 1-888-203-1112 (same passcode) about two hours after the conclusion of the call. Additional information on Macy's, Inc., including past news releases, is available at www.macysinc.com/pressroom.

Macy's, Inc. is scheduled to present at the Bank of America Merrill Lynch Consumer and Retail Technology Conference at 8:30 a.m. ET on Tuesday, March 9, 2021. Media and investors may access a live audio webcast of the presentation at www.macysinc.com on Tuesday, March 9, 2021. A replay of the webcast will be available on the company's website.

Important Information Regarding Financial Measures

Please see the final pages of this news release for important information regarding the calculation of the company's non-GAAP financial measures.

About Macy's, Inc.

Macy's, Inc. (NYSE: M) is one of the nation's premier omni-channel fashion retailers. The company comprises three retail brands, Macy's, Bloomingdale's and Bluemercury. Macy's, Inc. is headquartered in New York, New York. For more information, please visit www.macysinc.com.

Forward-Looking Statements

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 the effects of the COVID-19 pandemic on Macy's customer demand and supply chain, as well as its consolidated results of operation, financial position and cash flows, Macy's ability to successfully implement its Polaris strategy, including the ability to realize the anticipated benefits within the expected time frame or at all, conditions to, or changes in the timing of proposed real estate and other transactions, prevailing interest rates and non-recurring charges, the effect of potential changes to trade policies, store closings, competitive pressures from specialty stores, general merchandise stores, off-price and discount stores, manufacturers' outlets, the Internet and catalogs and general consumer spending levels, including the impact of the availability and level of consumer debt, possible systems failures and/or security breaches, the potential for the incurrence of charges in connection with the impairment of intangible assets, including goodwill, Macy's reliance on foreign sources of production, including risks related to the disruption of imports by labor disputes, regional or global health pandemics, and regional political and economic conditions, the effect of weather and other factors identified in documents filed by the company with the Securities and Exchange Commission, including under the captions "Forward-Looking Statements" and "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended February 1, 2020 and Quarterly Report on Form 10-Q for the quarterly period ended October 31, 2020. Macy's disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 
                                                                                                                                                                                  MACY'S, INC.
                                                                                                                                                                             Consolidated Statements of Operations (Unaudited)
                                                                                                                                                                    (All amounts in millions except percentages and per share figures)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                                                 13 Weeks Ended                                                                                                                    13 Weeks Ended                                                         
                                                                                                                                      January 30, 2021                                                                                                                                                        February 1, 2020
                                                                               ------------------------------------------------------------------------------------------------------------------------      --------------------                      ------------------------------------------------------------------------------------------------------------------------      --------------------
                                                                    % to                                                  % to                    
                                                              $                                         Net sales                                         $                                         Net sales                 
                                                                               ----------------------------------------  --------------------                      ----------------------------------------  --------------------                      ----------------------------------------  --------------------                      ----------------------------------------  --------------------
                                                                      
Net sales                                                   $                                   6,780             $                                   8,337          
                                                                      
Credit card revenues, net                                                      258                        3.8 %                                         239                        2.9 %
                                                                      
Cost of sales                                                               (4,498 )                                       (66.3 %)                                     (5,266 )                                       (63.2 %)
                                                                      
Selling, general and administrative expenses                                (2,045 )                                       (30.2 %)                                     (2,509 )                                       (30.1 %)
                                                                      
Gains on sale of real estate                                                    40                        0.6 %                                          95                        1.1 %
                                                                      
Restructuring, impairment, store closings and other costs                     (134 )                                        (2.0 %)                                       (337 )                                        (4.0 %)
                                                                               -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
                                                                      
Operating income                                                               401                        5.9 %                                         559                        6.7 %
                                                                      
Benefit plan income, net                                                        17                                  8          
                                                                      
Settlement charges                                                             (19 )                                                 (46 )                           
                                                                      
Interest expense, net                                                          (84 )                                                 (42 )                           
                                                                      
Financing costs                                                                 (1 )                                      --          
                                                                      
Losses on early extinguishment of debt                              --                                (30 )                           
                                                                               -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
                                                                      
Income before income taxes                                                     314                                449          
                                                                      
Federal, state and local income tax expense (Note 2)                          (154 )                                                (109 )                           
                                                                               -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
                                                                      
Net income                                                  $                                     160             $                                     340          
                                                                               ==================== ==================== ====================                                                                                                          ==================== ==================== ====================
                                                                      
Basic earnings per share                                    $                                    0.51             $                                    1.10          
                                                                               ==================== ==================== ====================                                                                                                          ==================== ==================== ====================
                                                                      
Diluted earnings per share                                  $                                    0.50             $                                    1.09          
                                                                               ==================== ==================== ====================                                                                                                          ==================== ==================== ====================
                                                                      
Average common shares:                                                                   
                                                                             311.4                              309.9          
      Basic
                                                                             316.6                              311.5          
      Diluted
                                                                      
End of period common shares outstanding                                      310.5                              309.0          
                                                                      
Supplemental Financial Measures:                                                         
                                                            $                                   2,282                       33.7 %                      $                                   3,071                       36.8 %
      Gross Margin (Note 3)
                                                            $                                     237             $                                     256          
      Depreciation and amortization expense
                                                                                                                                                                               MACY'S, INC.
                                                                                                                                                                          Consolidated Statements of Operations (Unaudited)
                                                                                                                                                                 (All amounts in millions except percentages and per share figures)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                                           52 Weeks Ended                                                                                                                    52 Weeks Ended                                                         
                                                                                                                                January 30, 2021                                                                                                                                                        February 1, 2020
                                                                         ------------------------------------------------------------------------------------------------------------------------      --------------------                      ------------------------------------------------------------------------------------------------------------------------      --------------------
                                                              % to                                                  % to                    
                                                        $                                         Net sales                                         $                                         Net sales                 
                                                                         ----------------------------------------  --------------------                      ----------------------------------------  --------------------                      ----------------------------------------  --------------------                      ----------------------------------------  --------------------
                                                                
Net sales                                             $                                  17,346             $                                  24,560          
                                                                
Credit card revenues, net                                                751                        4.3 %                                         771                        3.1 %
                                                                
Cost of sales                                                        (12,286 )                                       (70.8 %)                                    (15,171 )                                       (61.8 %)
                                                                
Selling, general and administrative expenses                          (6,767 )                                       (39.0 %)                                     (8,998 )                                       (36.6 %)
                                                                
Gains on sale of real estate                                              60                        0.3 %                                         162                        0.6 %
                                                                
Restructuring, impairment, store closings and other                   (3,579 )                                       (20.6 %)                                       (354 )                                        (1.4 %)
costs (Note 1)
                                                                         -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
                                                                
Operating income (loss)                                               (4,475 )                                       (25.8 %)                                        970                        3.9 %
                                                                
Benefit plan income, net                                                  54                                 31          
                                                                
Settlement charges                                                       (84 )                                                 (58 )                           
                                                                
Interest expense, net                                                   (280 )                                                (185 )                           
                                                                
Financing costs                                                           (5 )                                      --          
                                                                
Losses on early retirement of debt                            --                                (30 )                           
                                                                         -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
                                                                
Income (loss) before income taxes                                     (4,790 )                                                 728          
                                                                
Federal, state and local income tax benefit                              846                               (164 )                           
(expense) (Note 2)
                                                                         -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
                                                                
Net income (loss)                                     $                                  (3,944 )                              $                                     564          
                                                                         ==================== ==================== ====================                                                                                                          ==================== ==================== ====================
                                                                
Basic earnings (loss) per share                       $                                  (12.68 )                              $                                    1.82          
                                                                         ==================== ==================== ====================                                                                                                          ==================== ==================== ====================
                                                                
Diluted earnings (loss) per share                     $                                  (12.68 )                              $                                    1.81          
                                                                         ==================== ==================== ====================                                                                                                          ==================== ==================== ====================
                                                                
Average common shares:                                                             
                                                                       311.1                              309.7          
      Basic
                                                                       311.1                              311.4          
      Diluted
                                                                
End of period common shares outstanding                                310.5                              309.0          
                                                                
Supplemental Financial Measures:                                                   
                                                      $                                   5,060                       29.2 %                      $                                   9,389                       38.2 %
      Gross Margin (Note 3)
                                                      $                                     959             $                                     981          
      Depreciation and amortization expense
                                                                                                       MACY'S, INC.
                                                                                                       Consolidated Balance Sheets (Unaudited)
                                                                                                                     (millions)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                           January 30,                                   February 1,                
                                                                                                                    2021                                                                                2020
                                                                                                 ----------------------------------------  --------------------                      ----------------------------------------  --------------------
                                                                        
ASSETS:                                                                                    
                                                                        
                                                                                           
   Current Assets:
                                                                                           
    
                                                                              $                                   1,679     $                                     685  
      Cash and cash equivalents
                                                                                           
       
                                                                                                 276                        409  
      Receivables
                                                                                           
       
                                                                                               3,774                      5,188  
      Merchandise inventories
                                                                                           
       
                                                                                                 455                        528  
      Prepaid expenses and other current assets
                                                                                                 -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
                                                                                           
       
                                                                                               6,184                      6,810  
         Total Current Assets
                                                                                           
    
                                                                                               5,940                      6,633  
   Property and Equipment - net
                                                                                           
    
                                                                                               2,878                      2,668  
   Right of Use Assets
                                                                                           
    
                                                                                                 828                      3,908  
   Goodwill
                                                                                           
    
                                                                                                 437                        439  
   Other Intangible Assets - net
                                                                                           
    
                                                                                               1,439                        714  
   Other Assets
                                                                                                 -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
                                                                                           
    
                                                                              $                                  17,706     $                                  21,172  
      Total Assets
                                                                                                 ==================== ==================== ====================                      ==================== ==================== ====================
                                                                        
LIABILITIES AND SHAREHOLDERS' EQUITY:                           
                                                                        
                                                                                           
   Current Liabilities:
                                                                                           
    
                                                                              $                                     452     $                                     539  
      Short-term debt
                                                                                           
       
                                                                                               1,978                      1,682  
      Merchandise accounts payable
                                                                                           
       
                                                                                               2,927                      3,448  
      Accounts payable and accrued liabilities
                                                                                           
       
                                                                                      --                         81  
      Income taxes
                                                                                                 -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
                                                                                           
       
                                                                                               5,357                      5,750  
         Total Current Liabilities
                                                                                           
    
                                                                                               4,407                      3,621  
   Long-Term Debt
                                                                                           
    
                                                                                               3,185                      2,918  
   Long-Term Lease Liabilities
                                                                                           
    
                                                                                                 908                      1,169  
   Deferred Income Taxes
                                                                                           
    
                                                                                               1,296                      1,337  
   Other Liabilities
                                                                                           
    
                                                                                               2,553                      6,377  
   Shareholders' Equity
                                                                                                 -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
                                                                                           
    
                                                                              $                                  17,706     $                                  21,172  
      Total Liabilities and Shareholders' Equity
                                                                                                 ==================== ==================== ====================                      ==================== ==================== ====================
                                                                                                    MACY'S, INC.
                                                                                          Consolidated Statements of Cash Flows (Unaudited) (Note 4)
                                                                                                                  (millions)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                   52 Weeks Ended                                52 Weeks Ended               
                                                                                                           January 30,                                                                         February 1,
                                                                                                              2021                                                                                2020
                                                                                           ----------------------------------------  --------------------                      ----------------------------------------  --------------------
Cash flows from operating activities:                                                
                                                                        $                                  (3,944 )                      $                                     564  
   Net income (loss)
                                                                                     
   Adjustments to reconcile net income (loss) to net cash provided
   by operating activities:
                                                                                         3,579                        354  
      Restructuring, impairment, store closings and other costs
                                                                                            84                         58  
      Settlement charges
                                                                                           959                        981  
      Depreciation and amortization
                                                                                            47                         31  
      Benefit plans
                                                                                            31                         38  
      Stock-based compensation expense
                                                                                           (60 )                                        (162 )
      Gains on sale of real estate
                                                                                          (327 )                                          (6 )
      Deferred income taxes
                                                                                            18                          4  
      Amortization of financing costs and premium on acquired debt
                                                                                     
      Changes in assets and liabilities:
                                                                                           132                         (9 )
        (Increase) decrease in receivables
                                                                                         1,406                         75  
        Decrease in merchandise inventories
                                                                                            51                         89  
        Decrease in prepaid expenses and other current assets
                                                                                           237                         40  
        Increase in merchandise accounts payable
                                                                                          (759 )                                        (257 )
        Decrease in accounts payable and accrued liabilities
                                                                                          (617 )                                         (60 )
        Decrease in current income taxes
                                                                                          (188 )                                        (132 )
        Change in other assets and liabilities
                                                                                           -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
                                                                                           649                      1,608  
           Net cash provided by operating activities
                                                                                           -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
Cash flows from investing activities:                                                
                                                                                          (338 )                                        (902 )
   Purchase of property and equipment
                                                                                          (128 )                                        (255 )
   Capitalized software
                                                                                           113                        185  
   Disposition of property and equipment
                                                                                            28                        (30 )
   Other, net
                                                                                           -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
                                                                                          (325 )                                      (1,002 )
            Net cash used by investing activities
                                                                                           -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
Cash flows from financing activities:                                                
                                                                                         2,780             --  
   Debt issued
                                                                                           (95 )                                          (3 )
   Debt issuance costs
                                                                                        (2,049 )                                        (597 )
   Debt repaid
                                                                                          (117 )                                        (466 )
   Dividends paid
                                                                                           181                        (62 )
   Increase (decrease) in outstanding checks
                                                                                            (1 )                                          (1 )
   Acquisition of treasury stock
                                                                                --                          6  
   Issuance of common stock
                                                                                           -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
                                                                                           699                     (1,123 )
            Net cash provided (used) by financing activities
                                                                                           -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
Net increase (decrease) in cash, cash equivalents and restricted cash                    1,023                       (517 )
Cash, cash equivalents and restricted cash beginning of period                             731                      1,248  
                                                                                           -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
Cash, cash equivalents and restricted cash end of period                $                                   1,754     $                                     731  
                                                                                           ==================== ==================== ====================                      ==================== ==================== ====================

MACY'S, INC.

Consolidated Financial Statements (Unaudited)

Notes:

   
(1)                  The 52 weeks ended January 30, 2021 include non-cash impairment charges totaling $3.3 billion, which consist of a $3.1 billion goodwill impairment charge and an $0.2 billion impairment charge on long-lived tangible and right of use assets.
   
(2)                  The income tax expense of $154 million and the income tax benefit of $846 million, or 49.0% and 17.7% of pretax income and loss, respectively, for the 13 and 52 weeks ended January 30, 2021 reflect a different effective tax rate as compared to the company's federal income tax statutory rate of 21% primarily due to the carryback of net operating losses as permitted under the CARES Act. For the 52 weeks ended January 30, 2021, the benefit of the available carryback of net operating losses was offset by the impact of the non-tax deductible component of the goodwill impairment charge.
   
(3)                  Gross margin is defined as net sales less cost of sales.
   
(4)                  Restricted cash of $75 million and $46 million have been included with cash and cash equivalents for the 52 weeks ended January 30, 2021 and February 1, 2020, respectively.

MACY'S, INC.

Important Information Regarding Non-GAAP Financial Measures

The company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures provide users of the company's financial information with additional useful information in evaluating operating performance. Management believes that providing supplemental changes in comparable sales on an owned plus licensed basis and changes in comparable sales on an owned plus licensed basis, which includes adjusting for the impact of comparable sales of departments licensed to third parties, assists in evaluating the company's ability to generate sales growth, whether through owned businesses or departments licensed to third parties, and in evaluating the impact of changes in the manner in which certain departments are operated. Earnings (loss) before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure which the company believes provides meaningful information about its operational efficiency by excluding the impact of changes in tax law and structure, debt levels and capital investment. In addition, management believes that excluding certain items from EBITDA, net income (loss) and diluted earnings (loss) per share that are not associated with the company's core operations and that may vary substantially in frequency and magnitude from period-to-period provides useful supplemental measures that assist in evaluating the company's ability to generate earnings and to more readily compare these metrics between past and future periods.

The reconciliation of the forward-looking non-GAAP financial measure of changes in comparable sales on an owned plus licensed basis to GAAP comparable sales (i.e., on an owned basis) is in the same manner as illustrated below, except that the impact of comparable sales of departments licensed to third parties is the only reconciling item. In addition, the company does not provide the most directly comparable forward-looking GAAP measure of diluted earnings per share attributable to Macy's, Inc. shareholders excluding certain items because the timing and amount of excluded items are unreasonably difficult to fully and accurately estimate.

Non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, the company's financial results prepared in accordance with GAAP. Certain of the items that may be excluded or included in non-GAAP financial measures may be significant items that could impact the company's financial position, results of operations or cash flows and should therefore be considered in assessing the company's actual and future financial condition and performance. Additionally, the amounts received by the company on account of sales of departments licensed to third parties are limited to commissions received on such sales. The methods used by the company to calculate its non-GAAP financial measures may differ significantly from methods used by other companies to compute similar measures. As a result, any non-GAAP financial measures presented herein may not be comparable to similar measures provided by other companies.

MACY'S, INC.

Important Information Regarding Non-GAAP Financial Measures (All amounts in millions except percentages and per share figures)

Changes in Comparable Sales

                                                                       13 Weeks Ended                                52 Weeks Ended               
                                                                                                            January 30, 2021                                                                    January 30, 2021
                                                                                               ----------------------------------------  --------------------                      ----------------------------------------  --------------------
                                                                      
Decrease in comparable sales on an owned basis (Note 5)                                      (17.0 %)                                      (27.9 %)
                                                                      
Comparable sales impact of departments licensed to third parties (Note 6)                     (0.1 %)                                        0.0 %
                                                                                               -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
                                                                      
                                                                       13 Weeks Ended                                52 Weeks Ended               
                                                                                                            February 1, 2020                                                                    February 1, 2020
                                                                                               ----------------------------------------  --------------------                      ----------------------------------------  --------------------
                                                                      
Decrease in comparable sales on an owned basis (Note 5)                                       (0.6 %)                                       (0.8 %)
                                                                      
Comparable sales impact of departments licensed to third parties (Note 6)                      0.1 %                                         0.1 %
                                                                                               -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
                                                                      

Notes:

     
                 (5)   Represents the period-to-period percentage change in net sales from stores in operation throughout the year presented and the immediately preceding year and all online sales, excluding commissions from departments licensed to third parties. Stores impacted by a natural disaster or undergoing significant expansion or shrinkage remain in the comparable sales calculation unless the store, or material portion of the store, is closed for a significant period of time. No stores have been excluded as a result of the COVID-19 pandemic. Definitions and calculations of comparable sales may differ among companies in the retail industry.
     
                 (6)   Represents the impact of including the sales of departments licensed to third parties occurring in stores in operation throughout the year presented and the immediately preceding year and all online sales in the calculation of comparable sales. The company licenses third parties to operate certain departments in its stores and online and receives commissions from these third parties based on a percentage of their net sales. In its financial statements prepared in conformity with GAAP, the company includes these commissions (rather than sales of the departments licensed to third parties) in its net sales. The company does not, however, include any amounts in respect of licensed department sales (or any commissions earned on such sales) in its comparable sales in accordance with GAAP (i.e., on an owned basis). The amounts of commissions earned on sales of departments licensed to third parties are not material to its net sales for the periods presented.

MACY'S, INC.

Important Information Regarding Non-GAAP Financial Measures (All amounts in millions except percentages and per share figures)

Earnings (Loss) before Interest, Taxes, Depreciation and Amortization, Net Income (Loss) and Diluted Earnings (Loss) Per Share, Excluding Certain Items

Non-GAAP financial measures, excluding certain items below, are reconciled to the most directly comparable GAAP measure as follows:

EBITDA and adjusted EBITDA are reconciled to GAAP net income (loss). Adjusted net income (loss) is reconciled to GAAP net income (loss). Adjusted diluted earnings (loss) per share is reconciled to GAAP diluted earnings (loss) per share.

EBITDA and Adjusted EBITDA

                                                          13 Weeks Ended                                13 Weeks Ended               
                                                                                               January 30, 2021                                                                    February 1, 2020
                                                                                  ----------------------------------------  --------------------                      ----------------------------------------  --------------------
                                                         
Net income                                                     $                                     160     $                                     340  
                                                         
                                                                                   84                         42  
   Interest expense, net
                                                                            
    
                                                                       --                         30  
   Losses on early retirement of debt
                                                                            
    
                                                                                    1             --  
   Financing costs
                                                                            
    
                                                                                  154                        109  
   Federal, state and local income tax expense
                                                                            
    
                                                                                  237                        256  
   Depreciation and amortization
                                                                                  -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
                                                         
EBITDA                                                                            636                        777  
                                                         
                                                                                  134                        337  
   Restructuring, impairment, store closings and other costs
                                                         
                                                                                   19                         46  
   Settlement charges
                                                                                  -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
                                                         
                                                          52 Weeks Ended                                52 Weeks Ended               
                                                                                               January 30, 2021                                                                    February 1, 2020
                                                                                  ----------------------------------------  --------------------                      ----------------------------------------  --------------------
                                                         
Net income (loss)                                              $                                  (3,944 )                      $                                     564  
                                                         
                                                                                  280                        185  
   Interest expense, net
                                                                            
    
                                                                       --                         30  
   Losses on early retirement of debt
                                                                            
    
                                                                                    5             --  
   Financing costs
                                                                            
    
                                                                                 (846 )                                         164  
   Federal, state and local income tax (benefit) expense
                                                                            
    
                                                                                  959                        981  
   Depreciation and amortization
                                                                                  -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
                                                         
EBITDA                                                                         (3,546 )                                       1,924  
                                                         
                                                                                3,579                        354  
   Restructuring, impairment, store closings and other costs
                                                         
                                                                                   84                         58  
   Settlement charges
                                                                                  -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
                                                         
Adjusted EBITDA                                                $                                     117     $                                   2,336  
                                                                                  ==================== ==================== ====================                      ==================== ==================== ====================
                                                         

MACY'S, INC.

Important Information Regarding Non-GAAP Financial Measures (All amounts in millions except percentages and per share figures)

Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share

                                                                                                                                                                                                                                                                       
                                                                                                    13 Weeks Ended                                                                                                                    13 Weeks Ended                                                         
                                                                                                                                         January 30. 2021                                                                                                                                                        February 1, 2020
                                                                                  ------------------------------------------------------------------------------------------------------------------------      --------------------                      ------------------------------------------------------------------------------------------------------------------------      --------------------
                                                                Net                                         Diluted                                         Net                                         Diluted                  
                                                                                                    Income                                                                             Earnings                                                                             Income                                                                             Earnings
                                                                                                                                                                                       Per Share                                                                                                                                                               Per Share
                                                                                  ----------------------------------------  --------------------                      ----------------------------------------  --------------------                      ----------------------------------------  --------------------                      ----------------------------------------  --------------------
                                                                         
As reported                                                    $                                     160     $                                    0.50     $                                     340     $                                    1.09  
                                                                         
                                                                                  134                       0.42                        337                       1.08  
   Restructuring, impairment, store closings and other costs
                                                                                            
    
                                                                                   19                       0.06                         46                       0.15  
   Settlement charges
                                                                                            
    
                                                                       --             --                         30                       0.10  
   Losses on early retirement of debt
                                                                                            
    
                                                                                    1                       0.01             --             --  
   Financing costs
                                                                                            
    
                                                                                  (61 )                                       (0.19 )                                         (92 )                                       (0.30 )
   Income tax impact of certain items identified above
                                                                                  -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
                                                                         
                                                                                                    52 Weeks Ended                                                                                                                    52 Weeks Ended                                                         
                                                                                                                                         January 30, 2021                                                                                                                                                        February 1, 2020
                                                                                  ------------------------------------------------------------------------------------------------------------------------      --------------------                      ------------------------------------------------------------------------------------------------------------------------      --------------------
                                                                Net                                         Diluted                                         Net                                         Diluted                  
                                                                                                    Income                                                                             Earnings                                                                             Income                                                                             Earnings
                                                                                                    (Loss)                                                                            (Loss) Per                                                                                                                                                               Per Share
                                                                                                                                                                                         Share
                                                                                  ----------------------------------------  --------------------                      ----------------------------------------  --------------------                      ----------------------------------------  --------------------                      ----------------------------------------  --------------------
                                                                         
As reported                                                    $                                  (3,944 )                      $                                  (12.68 )                      $                                     564     $                                    1.81  
                                                                         
                                                                                3,579                      11.50                        354                       1.13  
   Restructuring, impairment, store closings and other costs
                                                                                            
    
                                                                                   84                       0.27                         58                       0.19  
   Settlement charges
                                                                                            
    
                                                                       --             --                         30                       0.10  
   Losses on early retirement of debt
                                                                                            
    
                                                                                    5                       0.02             --             --  
   Financing costs
                                                                                            
    
                                                                                 (412 )                                       (1.32 )                                        (100 )                                       (0.32 )
   Income tax impact of certain items identified above
                                                                                  -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
                                                                         

View source version on businesswire.com: https://www.businesswire.com/news/home/20210223005416/en/

SOURCE: Macy's, Inc.

Media - Blair Rosenberg 
media@macys.com 

Investors - Mike McGuire 
investors@macys.com
comtex tracking

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