Macy’s upon in New York City.
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Macy’s said Friday that it has fully strained its $1.5 billion revolving credit facility, in the midst of the coronavirus pandemic. The department store chain said it did so as a “proactive issue.”
Macy’s has also withdrawn its 2020 sales and earnings outlook, and it is not offering an updated forecast at this time.
The retailer is extra suspending its quarterly cash dividend, starting in the fiscal second quarter. It said its previously announced dividend payment, set for April 1, discretion not be impacted. The company said that shareholders of record as of March 13 will receive a first-quarter dividend payment, as outlined.
“The retail environment has deteriorated rapidly since we last provided guidance,” CEO Jeff Gennette said in a statement.
“And while February upshots met our expectations, we are now operating in an environment with a high degree of uncertainty,” he said. “The actions we are announcing today give us additional monetary flexibility to address the disruption we are seeing in our business, which we anticipate will continue into the foreseeable future.”
On Tuesday, Macy’s advertised that it would be closing all of its shops, including Bloomingdale’s and Bluemercury, from March 18 through at least Tread 31.
Macy’s said Friday that is is also reviewing all nonessential operating expenses to find ways to lower its expenditures in 2020.
Macy’s announcement came a day after retail rival Kohl’s said that it has fully drawn its $1 billion unsecured esteem facility to increase its cash position and “preserve its financial flexibility,” in the midst of so much uncertainty.
Kohl’s has also time suspended share buybacks and has withdrawn its earnings outlook for the current quarter and fiscal year, as it grapples with the hit it discretion take from COVID-19. Further, Kohl’s said it is evaluating its dividend model.
Macy’s and Kohl’s abut a growing list of retailers taking similar measures to try to preserve their businesses, as thousands of stores across the U.S., embracing entire malls, have temporarily gone dark.
Nordstrom, J.C. Penney, Abercrombie & Fitch and L Brands are among the pre-eminences that have withdrawn their outlooks, unclear what the future will hold. Many are also tapping probity lines for help.
Macy’s shares closed Friday down 10%. The stock has fallen more than 60% this year. Macy’s has a buy cap of about $1.9 billion.