NEW YORK - Macy's, Inc. (NYSE:M) has successfully completed the early tender phase of its cash tender offer for certain outstanding debt securities, the company reported on Monday. The tender offer, managed by Macy's Retail Holdings, LLC, targeted a selection of notes with the aim of purchasing up to $220 million in aggregate principal amount.
The tender offer, which commenced on September 4, 2024, reached its early tender deadline on Tuesday, with results indicating that the aggregate purchase price of the notes tendered by this date exceeded the maximum amount set by the company. Consequently, Macy's will not accept any further tenders of notes post the early tender date.
Specifically, the company will purchase 100% of the tendered 6.79% Senior Debentures due 2027, 7.00% Senior Debentures due 2028, 6.70% Senior Exchanged Debentures due 2028, 6.70% Senior Debentures due 2028, and 6.90% Senior Debentures due 2029. Additionally, approximately 59.5% of the 5.875% Senior Notes due 2029 tendered by the early deadline will be accepted. However, none of the 8.75% Senior Exchanged Debentures due 2029, 8.75% Senior Debentures due 2029, and 5.875% Senior Notes due 2030 will be purchased on the early settlement date.
Holders of notes accepted for purchase will receive the total tender offer consideration, which includes an early tender premium, as well as accrued and unpaid interest up to but excluding the early settlement date, scheduled for Thursday. The funds for the purchase will come from Macy's cash on hand and will also cover all related fees and expenses.
The tender offer was overseen by Wells Fargo Securities, BofA Securities, US Bancorp (NYSE:USB), and UBS Investment Bank, with Global Bondholder Services Corporation acting as the tender and information agent. This press release, based on a press release statement, is not an offer to purchase or a solicitation of an offer to sell the notes, nor does it constitute a notice of redemption of the notes.
Macy's, Inc., with its well-known brands Macy's, Bloomingdale's, and Bluemercury, remains a prominent retail entity, offering a blend of in-store and digital shopping experiences to its customers. The company's forward-looking statements are subject to various risks and uncertainties, which could cause actual outcomes to differ materially.
In other recent news, Macy's Inc. (NYSE:M) has made significant strides in its operations. The company has launched a contemporary menswear brand, Mode of One, following two years of development influenced by customer feedback and current fashion trends. Macy's also initiated a tender offer to repurchase up to $220 million of its outstanding notes, supported by Wells Fargo Securities, BofA Securities, US Bancorp, and UBS Investment Bank. Furthermore, the company announced a regular quarterly dividend of 17.37 cents per share, continuing its tradition of providing returns to investors.
On the financial front, Macy's reported mixed results for the second quarter of 2024. Despite a 1% comp sales gain at top-performing stores and a strong gross margin expansion, the company witnessed a 3.8% decline in net sales and a 3.3% decline in overall comps. However, its luxury segments, Bloomingdale's and Bluemercury, reported better-than-expected sales.
As part of its strategic moves, Macy's plans to close approximately 55 stores this year, shifting focus towards more profitable locations. The company's full-year net sales are expected to range between $22.1 billion and $22.4 billion, with adjusted diluted EPS for the third quarter projected to range from a loss of $0.04 to earnings of $0.01. In line with its growth strategy, Macy's intends to open 100 more stores in the shoe and handbag categories. These recent developments reflect Macy's commitment to navigate current retail challenges and strive for sustainable, profitable growth.
InvestingPro Insights
As Macy's, Inc. (NYSE:M) navigates its debt restructuring with a successful early tender offer, the financial health and outlook of the company come into focus. According to recent data from InvestingPro, Macy's stands as a significant player in the Broadline Retail industry, a detail that aligns with its reputation and market presence. Despite recent challenges, analysts predict the company will be profitable this year, with net income expected to grow, reflecting a potentially positive trajectory for the company's financial performance.
InvestingPro Data sheds light on key financial metrics for Macy's. The company boasts a market capitalization of $4.17 billion, showcasing its substantial size in the retail sector. The Price/Earnings (P/E) ratio stands at 22.65, suggesting that investors are willing to pay a higher price for earnings, possibly due to expected growth or the company's stable dividend history, which has seen payments maintained for 22 consecutive years. Additionally, the Dividend Yield as of late 2024 is notable at 4.62%, which may appeal to income-focused investors.
However, it's worth noting that the stock price has experienced considerable volatility, with a significant decline over the last six months, as indicated by a 27.73% drop in the 6-month price total return. This volatility is a critical aspect for potential investors to consider, especially those looking for stable returns. For more detailed analysis and additional InvestingPro Tips, investors can explore the full range of insights available at https://www.investing.com/pro/M, which includes a total of 9 tips for a comprehensive investment strategy.
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