Consolidated Statements of Operations - 2Q 2008 (Unaudited) (Note 1)
(All amounts in millions except percentages and per share figures)
| |
13 Weeks Ended
|
13 Weeks Ended
|
| |
August 2,
2008
|
August 4,
2007
|
| |
$
|
% to
Net sales
|
$
|
% to
Net sales
|
| |
| Net sales |
$5,718 |
|
$5,892 |
|
| |
| Cost of sales (Note 2) |
3,346 |
58.5% |
3,507 |
59.5% |
| |
| Gross margin |
2,372 |
41.5% |
2,385 |
40.5% |
| |
| Selling, general and administrative expenses |
(2,037) |
(35.6%) |
(2,038) |
(34.6%) |
| |
| Division consolidation costs (Note 3) |
(26) |
(0.5%) |
– |
–% |
| |
| May integration costs (Note 4) |
– |
–% |
(97) |
(1.7%) |
| |
| Asset impairment charges (Note 5) |
(50) |
(0.9%) |
– |
–% |
| |
| Operating income |
259 |
4.5% |
250 |
4.2% |
| |
| Interest expense - net |
(138) |
|
(137) |
|
| |
|
Income before income taxes
|
121 |
|
113 |
|
| |
|
Federal, state and local income tax expense
|
(48) |
|
(39) |
|
| |
| Net Income |
$73 |
|
$74 |
|
| |
| Basic earnings per share |
$.17 |
|
$.16 |
|
| |
| Diluted earnings per share |
$.17 |
|
$.16 |
|
| |
| Average common shares: |
| Basic |
421.1 |
|
451.9 |
|
| Diluted |
422.1 |
|
457.8 |
|
| |
| End of period common shares outstanding |
420.5 |
|
435.6 |
|
| |
| Depreciation and amortization expense |
$315 |
|
$327 |
|
Notes:
(1) Because of the seasonal nature of the retail business, the results of operations for the 13 weeks ended August 2, 2008 and August 4, 2007 (which do not include the Christmas season) are not necessarily indicative of such results for the fiscal year. The May Department Stores Company (“May”) was acquired August 30, 2005.
(2) Merchandise inventories are primarily valued at the lower of cost or market using the last-in, first-out (LIFO) retail inventory method. Application of this method did not impact cost of sales for the 13 weeks ended August 2, 2008 or August 4, 2007.
(3) Represents costs and expenses associated with the division consolidation and localization initiatives, primarily severance and other human resource related costs. For the 13 weeks ended August 2, 2008, division consolidation costs amounted to $.04 per diluted share
(4) Represents costs and expenses associated with the integration and consolidation of May’s operations into Macy’s operations, including additional costs related to closed locations, final system conversion costs and costs related to other operational consolidations. For the 13 weeks ended August 4, 2007, May integration costs amounted to $.13 per diluted share.
(5) Represents impairment charges associated with acquired indefinite lived private brand tradenames. For the 13 weeks ended August 2, 2008, impairment charges amounted to $.08 per diluted share.
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Consolidated Statements of Operations - 2Q 2008 (Unaudited) (Note 1)
(All amounts in millions except percentages and per share figures)
| |
26 Weeks Ended
|
26 Weeks Ended
|
| |
August 2,
2008
|
August 4,
2007
|
| |
$
|
% to
Net sales
|
$
|
% to
Net sales
|
| |
| Net sales |
$11,465 |
|
$11,813 |
|
| |
| Cost of sales (Note 2) |
6,873 |
60.0% |
7,071 |
59.9% |
| |
| Gross margin |
4,592 |
40.0% |
4,742 |
40.1% |
| |
| Selling, general and administrative expenses (Note 3) |
(4,140) |
(36.1%) |
(4,151) |
(35.1%) |
| |
| Division consolidation costs (Note 4) |
(113) |
(1.0%) |
– |
–% |
| |
| May integration costs (Note 5) |
– |
–% |
(133) |
(1.1%) |
| |
| Asset impairment charges (Note 6) |
(50) |
(0.4%) |
– |
–% |
| |
| Operating income |
289 |
2.5% |
458 |
3.9% |
| |
| Interest expense - net |
(274) |
|
(262) |
|
| |
Income from continuing operations
before income taxes
|
15 |
|
196 |
|
| |
|
Federal, state and local income tax expense (Note 7)
|
(1) |
|
(70) |
|
| |
|
Income from continuing operations
|
14 |
|
126 |
|
| |
| Discontinued operations, net of income taxes (Note 8) |
– |
|
(16) |
|
| |
| Net Income |
$14 |
|
$110 |
|
| |
| Basic earnings (loss) per share: |
| Income from continuing operations |
$.03 |
|
$.27 |
|
| Loss from discontinued operations |
– |
|
(.03) |
|
| Net income |
$.03 |
|
$.24 |
|
| |
| Diluted earnings (loss) per share: |
| Income from continuing operations |
$.03 |
|
$.27 |
|
| Loss from discontinued operations |
– |
|
(.03) |
|
| Net income |
$.03 |
|
$.24 |
|
| |
| Average common shares: |
| Basic |
421.0 |
|
460.0 |
|
| Diluted |
422.4 |
|
467.1 |
|
| |
| End of period common shares outstanding |
420.5 |
|
435.6 |
|
| |
| Depreciation and amortization expense |
$630 |
|
$656 |
|
Notes:
(1) Because of the seasonal nature of the retail business, the results of operations for the 26 weeks ended August 2, 2008 and August 4, 2007 (which do not include the Christmas season) are not necessarily indicative of such results for the fiscal year. The May Department Stores Company (“May”) was acquired August 30, 2005, including the Lord & Taylor division and the Bridal Group, consisting of David’s Bridal, After Hours Formalwear and Priscilla of Boston. The sale of the Lord & Taylor division was completed in October 2006, the sale of David’s Bridal and Priscilla of Boston was completed in January 2007 and the sale of After Hours Formalwear was completed in April 2007.
(2) Merchandise inventories are primarily valued at the lower of cost or market using the last-in, first-out (LIFO) retail inventory method. Application of this method did not impact cost of sales for the 26 weeks ended August 2, 2008 or August 4, 2007.
(3) For the 26 weeks ended August 2, 2008, selling, general and administrative expenses include an accrual related to a legal dispute of approximately $23 million or $.03 per diluted share.
(4) Represents costs and expenses associated with the division consolidation and localization initiatives, primarily severance and other human resource related costs. For the 26 weeks ended August 2, 2008, division consolidation costs amounted to $.17 per diluted share.
(5) Represents costs and expenses associated with the integration and consolidation of May’s operations into Macy’s operations, including additional costs related to closed locations, final system conversion costs and costs related to other operational consolidations. For the 26 weeks ended August 4, 2007, May integration costs amounted to $.18 per diluted share.
(6) Represents impairment charges associated with acquired indefinite lived private brand tradenames. For the 26 weeks ended August 2, 2008, impairment charges amounted to $.08 per diluted share.
(7) The income tax expense for the 26 weeks ended August 2, 2008 reflects the settlement of various state tax issues.
(8) Represents the results of operations of After Hours Formalwear. For the 26 weeks ended August 4, 2007, discontinued operations included the loss on disposal of After Hours Formalwear of $7 million on a pre-tax and after-tax basis, or $.01 per diluted share.
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Historical Data:
Consolidated Financial Statements: