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Macy’s, Inc. Reports First Quarter Earnings of 55 Cents Per Diluted Share, an Increase of 28% Over Last Year, on Comparable



  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

Business Wire

CINCINNATI -- May 15, 2013

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          $            % to
                                          Net sales                  Net sales
                                                                      
Net sales                    $ 6,387                    $ 6,143
                                                                      
Cost of sales (Note            3,911      61.2   %        3,757      61.2   %
2)
                                                                      
Gross margin                   2,476      38.8   %        2,386      38.8   %
                                                                      
Selling, general and
administrative                 (2,041 )   (32.0  %)       (1,995 )   (32.4  %)
expenses
                                                                      
Operating income               435        6.8    %        391        6.4    %
                                                                      
Interest expense –             (97    )                   (112   )
net
                                                                      
Income before income           338                        279
taxes
                                                                      
Federal, state and
local income tax               (121   )                   (98    )
expense (Note 3)
                                                                      
Net income                   $ 217                      $ 181     
                                                                      
Basic earnings per           $ .56                      $ .43     
share
                                                                      
Diluted earnings per         $ .55                      $ .43     
share
                                                                      
Average common
shares:
Basic                          388.2                      417.1
Diluted                        394.5                      424.3
                                                                      
End of period common           383.7                      414.6
shares outstanding
                                                                      
Depreciation and             $ 251                      $ 256
amortization expense
                                                                      

 
 
MACY’S, INC.
     
Consolidated Statements of Income (Unaudited)
       
Notes:
       
      Because of the seasonal nature of the retail business, the results of
(1)   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.
       
      Merchandise inventories are valued at the lower of cost or market using
      the last-in, first-out (LIFO) retail inventory method. Application of
(2)   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.
       
      Federal, state and local income taxes differ from the federal income tax
(3)   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                388            361            400
current assets
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              2,134          2,610          2,225
liabilities
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                   $ 21,040     $   20,991      $  21,277
Shareholders’ Equity
                                                                         

                                                               
                                                                 
MACY’S, INC.

 

Consolidated Statements of Cash Flows (Unaudited)

 

(millions)
                                                                 
                                             13 Weeks Ended     13 Weeks Ended
                                             May 4, 2013        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              (2      )          (5      )
premium on acquired debt
Changes in assets and liabilities:
Decrease in receivables                          78                 95
Increase in merchandise inventories              (323    )          (348    )
(Increase) decrease in prepaid                   (31     )          61
expenses and other current assets
Decrease in other assets not                     1                  21
separately identified
Increase in merchandise accounts                 754                720
payable
Decrease in accounts payable and
accrued liabilities not separately               (454    )          (450    )
identified
Decrease in current income taxes                 (325    )          (267    )
Increase (decrease) in deferred                  68                 (24     )
income taxes
Increase in other liabilities not                47                 4        
separately identified
Net cash provided by operating                   298                265      
activities
                                                                 
Cash flows from investing
activities:
Purchase of property and equipment               (65     )          (168    )
Capitalized software                             (50     )          (46     )
Disposition of property and                      4                  23
equipment
Other, net                                       4                  (11     )
Net cash used by investing                       (107    )          (202    )
activities
                                                                 
Cash flows from financing
activities:
Debt repaid                                      (5      )          (795    )
Dividends paid                                   (78     )          (83     )
Increase (decrease) in outstanding               44                 (16     )
checks
Acquisition of treasury stock                    (336    )          (246    )
Issuance of common stock                         100                141      
Net cash used by financing                       (275    )          (999    )
activities
                                                                 
Net decrease in cash and cash                    (84     )          (936    )
equivalents
Cash and cash equivalents at                     1,836              2,827    
beginning of period
                                                                 
Cash and cash equivalents at end of          $   1,752          $   1,891    
period
                                                                             

Contact:

Macy’s, Inc.
Media
Jim Sluzewski, 513-579-7764
or
Investor
Matt Stautberg, 513-579-7780
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