Macy's (M) 22 Feb 222021 Q4 Earnings call transcript

Good morning, and welcome to Macy's, Inc. Fourth Quarter 2021 Earnings Conference Call. Today, our long conference is being recorded. I would now like to turn the call over to Mike McGuire, Head of Investor Relations. Please go ahead.

operator. you, Thank and fourth everyone, joining to us Good and thanks full our quarter year discuss morning, for XXXX results. the Adrian With and on call Gennette, Jeff me our CEO; and Mitchell, CFO. our are Chairman have Adrian and they'll share. prepared Jeff that remarks provide questions. After which, for we'll time

constraints number of time you ask participants, X. the questions your limit to and the we that Given please

website, a a macysinc.com. section press release, our reminder, Along minutes. with Investors today's As the have call slide posted XX of on is our scheduled for presentation we

more financial the in our these and all filings expectations mark actual we Securities to the the results Investor and subject with cause from materially mentioned risks discussing information of contained In remarks, so certain our website, These be statements mind the presentation be noted X:XX our note versus fireside to we'll results, A are in our prepared webcast addition providing XXXX. operations, from to Litigation Wednesday, Commission. to we in release that that discussion differ event will the will could comparisons forward-looking benchmarks Reform at calendars. XXXX given Securities chat assumptions March the speak our Retail includes this In and of that results the be are our Global Private X Exchange non-GAAP will be factors feel XXXX Adrian participating figures to statements that appropriately. Time, unless this to and please Relations as We assist in Keep measures. that the that Consumer Safe will today. on morning otherwise Harbor of pandemic's and detailed on uncertainties is on uncertainties additional and UBS Macy's. forward-looking subject Conference. facts a your impact This provisions of your noted, at analysis Also Eastern morning Act performance a.m. the press of

our earnings on non-GAAP as additional presentation as and our the release today's on this it being call archived will on With for the the measures X You and hours will can after call is on website. be webcast And in A that, of I'll as available these of call, information well our regarding X Jeff. our website. be conclusion over approximately find reminder, website a section financial our replay others used year. to Investors turn

morning, everyone. us. Thanks, for Thank good Mike, and joining you

company more proud kick off financially and say past that healthier were and results year. before to the We in pandemic. agile is Macy's, As than quarter XXXX, the a we I'm we strong stronger, Inc. today delivered

the much progress are to continue on better momentum. and build success. transformation make We And positioned our company good long-term for we of

the stayed has began our We groundwork strategy. on lay business since we Polaris we that when to focused changed XXXX delivered. plan, and Our dramatically for have

We led digitally more execution. our customer-centric and in and are now planning

morning, digital exceeded has our We of with to the for I margins results, details the shareholder Digital and stable and particular have share will This for growth are our Board's discuss our recent and wrap priority value. specific up more expectations quarter. customer accelerating company, outcome for enhancing and outlook we I'll the how highlights, we structure the meeting enable future. store and the are there, the Adrian initiatives sales From seamless integrated through financial also offerings. performance beyond. our on financial sustainable Then of review XXXX of review will operating a an across in Adrian shopping experience been demonstrated I'll strong details XXXX expectations us. walk our of which will value every and a

strong over increased was up XX%. performance sales the year with Let X.X% company as and quarter November the AUR holiday quarter January. sales December well XX.X% licensed in fourth expectations exceeded as performance fourth softer owned full reflects our for plus the for was the up that Total for sales This Comparable highlights. start versus me XXXX. and

year, licensed XXXX. the X% comparable sales increased to compared owned For plus

XXXX, million For $XXX the more year, in we adjusted generated XX%. EBITDA of growth than

Our full have achieved year a not since margin adjusted EBITDA XX.X%, XXXX. rate was we

and This result, to adjusted we while reduced meeting our XX% challenges a As we our completed that dividends, capital our program goals for that allocation healthy, navigate quarter. strong and sheet financial ample current lie diluted XXXX. predictable EPS year, are cash, a the meaningful $X.XX Board pleased We $X a of to during million modest full stronger versus yet on repurchases. balance am announce With $XXX past authorized repurchase program. and is through has achieved billion And up enables position. returns our new deliver us invested the capital to share I ahead returns shareholder in share debt

These we transformation X the as you in took have retail result we accomplishments led are efforts the arose, placed organization reinstating the it a the XXXX. have our years. about actions X% business. of focus of I over Additionally, on frequently the strategy new external Polaris after stronger and strategy, a announced evolved our to digitally that during has spoken our increase have opportunities environment has This dividend past changed led and to

have to with offer few of our now they worked a digital and choose shop. one, it fully Number what XXXX, to and Today, team and digital however engaging power accomplished. whenever a the customers siloed we as an organization. our integrated. meet platform convenient Here are In modernized highlights we've just experience is

store while more sustainable establishing #X categories digital an points versus the omnichannel X increase Number and and C in percentage of the are and increasingly footprint B quality is XX% our scaled growth. our appropriate D in largely malls. to drive penetration, markets and the A was we Today, the XXXX. profitable fourth the focused a stores quarter malls, of two, consumer closure in strategy omnichannel, accelerating on of with on more XXXX, in website have in nation We operating focused the platform, highest

a XXXX Given last this, markets to up we on in order we delayed we stores. as in off-mall have we many the said call, maintain physical while remaining of presence scale our most in earmarked our format closures

multichannel pivot In in was being Buy In acquisition operations spread us remain to best greater we're place narrow. a addition spectrum supporting our clearer, Pickup for customers was positioned are cash-positive digital that inspire our in helps based our trends. Store, to response investments we to Keeping our more And value customers' allowing changing Online, stores understand receiving. reposition through flipped hubs, the on we reflects are and Pickup discovery behavior and four, the Same-day fulfillment stores shopping, agility multi-category these making open fleet in balanced, Number Today, also also to in customer Number the luxury. capabilities Delivery. attrition levels to health high fund inventory they Curbside and all we three, the of that customer Today, curated over low XXXX, which buying productivity. that and complicated disciplined value assortment for merchandise occasion-based across had several on with and new promotions of pricing dynamic. years. less markdowns simpler behavior our between and and we purchasing XXXX, were over-indexed better and style customer to to the to of levels offer apparel, in from our with overly our and customers, today, inventory our approach driving levels is categories, XXXX, was brands disciplined the next products off-price

the digital we integrated a result of enabling our the While data rate more chain pay that acquisition embed segregated of everything efficiency. also us that that benefiting Number modern attrition. on from that is the we XXXX, and have do. and seen had invested to profitability to data productivity strategic operational to to team have previously results network supply inventories in lacked a and recovery supply we agile, our and and is from of store and rate this utilization. and analytics chain our led delivery speed far initiatives just And increase we advanced outweighed throughout relied that as efficiency inventory technology investments, of Today, a of we customer driven data science off finally, entire throughout in lifetime automated. best to enterprise and better reimagine We've profitable new to data-driven of increasingly realize demand, built into have new an customer created accelerated our a five, of network us our helping organization successfully operations, business. work XXXX goal analytics relationships, To building increased a distribution

enter XXXX, us relevant pricing. tailwinds have efforts year. Macy's, in a profitable the our see and seen were ahead headwinds already around That both for short, to today are together we outlook In customers. more improvements encourages We than XXXX: more to more personalization we different in that a as our said, more agile, Inc. and offer and we we measured

Now I'd across into like past stores. performance one achieve customers, this initiatives you year merchandising, level our the work digital we've take done to deeper and to

First, customers.

X customer more million our each Macy's combined on They brand XX with and, customers in paying shopped X% spent ago. up AURs, Our is more years focus off. with XXXX, visit. from bought higher

with new fourth with months over XXXX, through past million digital. reengaged. are XX coming in customers customers XX% XX% XX% dormant now of quarter, new increase customers were the new X.X these QX adding compared Nearly are to We in the an who

This million. marker reversal increased the of year, new increasing customer trend important full of an relevance us acquisition XXXX XX.X the and to a for XX% the For and is strong indication customers over brand.

continue pursuing We our this momentum. build on strategies to will

merchandising watches, approach décor, the jewelry, on challenges, chain us handbags, successfully and home. consumers, supply had We Let's Through well reach bets we jewelry, luxury turn which affluent from assortment outerwear, men's helps performance our navigated in home placed with in and and to strong toys, performed strong and which our strength shoes quarter. season. merchandising. see contemporary, fine team's ensuring fragrances, holiday creativity, throughout agility fragrances like sleepwear the to quarter Bloomingdale's, continue categories data-driven men's we all and for fine a the

Madden, stores and customer. This as shopping attract our Cotton offerings On, fall well our XXX specifically added private this a Now appeal categories brands, diverse the to that season, selection focused on Levi's brands, we Oak. to the Macy's enhancing new Michael and younger, we brands These the shopper. Steve Kors more under-XX of products further core of customers, experience curated In new also and to And addition as include In to

to year. a contemporary that strategy aligned customer strategy that digital towards we the results At in-store sitelet. Bloomingdale's, the We through are the spring customers under-XX pleased attract This our had customer the to in with and record we've geared under-XX response the our brands seen out well date. rolled

and modern Aqua me Today, our and and XXXX. more search in digital our brand Sales Aided saw improved margin in experience, at various in engaging, sales and growth homepages, digital a by redesigned shift conversion business to remained of X.X%, XXXX. brings to Macys.com of curated sitelets private both outperformed thanks compared function. we the initiatives. This personalized in app our healthy XX% and strong, platform Our profitable luxury for brands levels XXXX. our to the digital increase continued preferences, consumer is

grew benefits. teams XXXX single During back-end the Today, digital increasing third nameplate and traffic quarter with dedicated app while an peer gain largest the Bloomingdale's with the sales across in and Bloomingdale's had customer-facing during operate to quarter, XX% more each site of XXXX, Compared within quarterly downloads a efficiently XXXX. Macy's our over retains structure set XX%. fourth increase merchandising our digital Macy's separate in downloads XX%

of part evolved omnichannel sustainable The interplay integrated of remain focused critical on assets The and we with and stores a is stores, omnichannel our physical Lastly, shopping growth. has digital sales habits. between customer critical, our role ecosystem.

representing XX%. these of During the quarter, XX% growth half at above and of markets, had by XXXX sales, omnichannel least XX% our levels, of our grew

grew versus the omnichannel XXXX. of For year, in we our XX% sales markets

XXXX. Now that see to macroeconomic in the environment we

remain First, and will healthy the to rise. improves market continue tailwinds. We believe job the as consumer wages demand

packages quarter and headwinds, international expect XXXX. We was expect weighed With XXXX year, remains tourism we fourth levels. beyond before the demand social return This inflationary to the industry from tailwind, us agility cost both confident people navigate for to a as sentiment. consumer XX% stimulus challenges with events. down variants. expect and in consumers of on health we But particularly a strengthening to put chain to us are the supply and talent, promotional our and and COVID uncertainty financial potential we disruptions, that behavior, stronger in environment competition of operational position dynamic for particularly increase, Omicron past pressures, tourism office International XXXX. lapping

Let me results. to now for our on color it pass Adrian additional QX

momentum XXXX momentum Thank you, morning, maintaining Polaris Jeff, excited over coming gained focused year. We're that in on through and about course the good and the everyone. the are we of

of remains and the a allocation priority of capital. driving through performance strong strategic top Our shareholder value combination

business bolder our Our and X much ambition context, walk against our increased margin, I this quarter fourth now value capital is and productivity, creation healthier strategy. a given inventory Macy's, will gross for in our of a sales, summary allocation. With performance confidence Inc. conviction Polaris and even through management our expense metrics:

First, from licensed from stimulus sales degree, generated net the lesser contributed government mentioned quarter, XXXX. sales January appeared absence shift billion industry-wide during the by nature. weaker on Family X.X% The in on of the up an we expected. and increased was January basis We than or call. $X.X were owned of to we sales point $XXX factor. last approximately a sales the despite the Comparable million emergence sales. in and Yet basis with Holiday plus of our fourth overall to stronger quarter softness anticipated. X.X% headwind consumer XXX in the temporary be Friends tempered XXXX payouts variant, the a sentiment than had also of the To the month Omicron

XXXX, basis Leaner, productive holiday delivery was on fourth by points for in XX.X%, the down XXX XX which were of basis margin. and margin Notably, margin the more to XX drivers. Merchandise Now were fourth lower points points. surcharges, Gross increased quarter the the essentially XXXX. gross inventories approximately XXXX. markdowns from margin primary basis quarter of from quarter non-existent reduced

XXX of XXXX, accounted for basis full-price and down a reduction basis higher delivery points Delivery but the net Our than surcharges, pricing XXXX. higher for Macy's is brand. increased and improved X.X% XXX of points fourth full-price quarter expense Versus of priority top the quarter sales, full-price initiatives sell-throughs expense XXXX, drive the for fourth also AUR from us. Including holiday XX% sell-throughs AURs. helped

on, we is the been on in to the we reducing have results, XXXX. in-store improvements we're out split initiative an on of that deployed with pleased roll our additional in achieved order Improving efficiency locations before these and the test XX holiday fulfillment increasing we stores one throughput that and Based labor November. Here, working is focus per shipments fulfillment. this hour initiative to plan we

productivity. inventory to shift let's Now

data teams gains Our been a into of driven have decision-making. the our science this by in source scaling which margin achievements, gross working are our area and and of evolution

healthy. flat. the period, XX% made the During holiday which than for we compare period no growth you And matter year, while on versus up critical only inventory against. year were remained of levels more were sales was the performance gains full XXXX, inventory almost full XX%. impressive And was Inventory XX% down versus XXXX, sales

a improved XX% inventory As compared turn to XXXX. result, by

driven This or and all expense increased of the of by sales continued and revenue SG&A $X.X permanent Media Media quarter full exceeded down expenses Macy's basis XXX net of partially fourth the were net Macy's were billion revenues another saw also offset of quarter expectations, strong labor than benefit gained in from to savings We down year was percent the $XXX million generated as XXXX. Network, Polaris leverage that as offset $XX XX% million by points discipline. cost expenses costs. the SG&A of management quarter, generating our in expenses. by we which grew, more Network versus XXXX. a improved X.X% the sales SG&A expense

pay quarter million, million we accelerated open wage to $XX were XXXX. the the also revenues in another from quarter, premium filling of minimum the our During per card XXX-or-so positions, adoption up of made and Credit hour headway fourth $XX stores. provided significant $XXX in weekend colleagues

XX bad during levels card debt benefit revenues to XXXX versus card credit of quarter. to percent a credit up Better-than-expected revenues net basis continue X%. points As the were sales,

XXXX $X.XX line of up EBITDA Now $X.XX, in After in and margin fourth ended profitability. We XXXX. taxes, is diluted margin gains allocation. XX for in EPS interest final position. the accounting the despite cash capital or The strong results generated value points bottom a XXXX. was creation from Adjusted less of year adjusted for metric $XX asset were the these that XX.X% basis million sale achieved than in higher quarter

full capital XXXX, including digital our technology-based million We billion Our includes of generated expenditures Act of of initiatives support technology in largely and million. data were free CARES science architecture. focused year those receipt that initiatives, which simplification of of the the cash $X.X $XXX our on our business, majority of the refund in $XXX tax the January

This, pre-pandemic materially X.Xx, and us allowed of of Our leverage same ratio our below than with billion $X.X free better initial coupled debt pay our the remain committed to performance, to capital solid cash levels. to shareholders. time, we X.Xx returning of strong target early. resulted a flow well in off At year-end

As exhausted $XXX total, than million $XXX repurchase we XX.X the more we Jeff million authorization, X.X outstanding. million referenced, million out during of or the In of repurchasing remaining X.X% authorization, shares. the of full shares quarter, share repurchased shares

XXXX Now, it return I let and to our will to long-term Jeff, back discuss guidance. me outlook turn and over then

Thanks, Adrian.

core were our seamless the near, two, our one, and focused as objectives: brand and the for ensuring experience most for off-price than integrated assets. shareholders a our continues We In and of our shopping review, of across we to Inc. review base. enhance Inc. legal we that on our and quarter, from Furthermore, Board conducted combination be we convenient most shareholders Macy's, to options Macy's, value we that and of no assistance deliver extensive in business to footprint our a with valuation Directors strategy to were provide multiple included the determine to customer a more on AlixPartners on all investors. a and and of extensive platform with work Throughout business diverse at review the touch and was the Macy's As digital this of the luxury e-commerce There This discussed the to Board medium This term; multigenerational and for deliver potential omnichannel separation to Inc. or operations management the financial separation analyze of as nameplates merits our management our Macy's, separation X long of on brick-and-mortar was our of regular considered, digital profitable the a the national the call our to our review found last team review, with path scenario the points. profiles and best omnichannel economics This regard undertook Board and digital advisers that greater imposed true AlixPartners the a customer individually. our constraints basis. value well physical every additional review perform for forward our analyzed. a of Bloomingdale's unit comprehensive the we businesses. found financial appealing of and and digital growth We levels. drivers, advisers. businesses our both revenue or and after with digital store overall will

the costs separated through due another for evaluated of damage gross be significant important would for third-party and potential to leveraging we possible of Bloomingdale's markdown We debt decision-making operating the Inc. transfer to potential track and considered view both to consideration performance a as the And businesses, benefits a well digital potential any from in there available benefits Macy's, including for of the loss and scale businesses investment, as to margin a financial separation our was of exit the costs, for value and our capital whether financial partner. Bloomingdale's would the liability. Also, store costs digital need business, Key business. significant separation ongoing a offering of special the equity path Board's were also a that considering issuing

of to the our stronger be boosted several stores. for the future The confidence and digital. risk and initiatives accelerated our every and with We also undertaking advisers that our reaffirmed digital considered, test and customers net, together a several also we integrated Macy's unlock points scenario and pressure and value clarity high. has across business too next alternative execution Their in greater customers Inc. for findings brands, was review, These investors. on strategy. over we price strategy we determined Macy's, a In years assessing found fully the in that as asked broad business Polaris our the range could that initiatives with Bloomingdale's this to our a begin

the We works. new a have number of capabilities in

value marketplace incremental is announced last the deliver our sales billion $XX we target. quarter to expected digital First, above

to our expand owned and our we strong third-party In our Direct addition our to respond and the assortment and marketplace, Through can our marketplace to to categories, online of will SKU diverse teams expand enhance the dramatically allow customers. digital brands experience. this Vendor quickly partners more platforms, needs and changing and

active and These continue we our launching are bloomingdales.com enhancing investments user and off. offerings. across our increases we're addition, digital and with apps, new And paying platform seeing In macys.com. conversion we are pleased the

Beyond identified digital, other several we've areas. focus

merchandise First, our categories.

when announce have X and beauty, expand the to key There's In best-in-class our We toys. categories creating of of and immersive strong we during jewelry. I'm our and for Both to with percentage all the in these XXXX and shoes, tailored launched new broaden XX brands. our year, "R" Pandora brand, "R" categories Bluemercury fine watches. to fine store in XXXX. that with this new working to brand. attracts business those opened over Us identified growth Pandora new Pandora Bloomingdale's customers Toys upon XX categories. also customers continue excited already been partnership aggressive will completely point men's the XXXX, are Toys additional "R" our build shop toy furniture, cross-shopped pleased clothing, of assortment we within our women's half stores And with already where categories has to stores. include assortment. sales new instrumental Of Toys for customers. Macy's and and an partnership second Example new the younger customers will customers, We dresses now we more locations and and of XX% like strong foundation. The in stores saw Us, our attracting experience doubled categories growth incremental we a we in in to our these in are Us from XX% in business Macy's toy customers Today, jewelry locations other the were increase November, in jewelry

Giada quarter, Laurentiis. key was the quarter. Bloomingdale's Bloomingdale's success the holiday partnership During The its de a performance to with saw collection gifting in Carousel in fourth

We latest to month, are unveil Netflix's excited with announce Bloomingdale's that will its Carousel collection next Bridgerton.

focus marketing area is Another loyalty. and

Star growing capabilities, day. Rewards is Our loyalty increase and Through enhanced visits personalization can additional that engagement every we purchases. membership drives positive perception, brand

significantly We determine time, We digital a have are mix is Macy's experienced in best on as a ago. our versus of our testing our Today, our spend. spend digital XX% years our XX% XX% advanced engine marketing. message we and focus, improvement return frequency, has development. AI-driven towards media total for this advertising Over on X digital targeting offer shifted of in early personalization Consistent innings channel, the with communication to help and view company the customers. growth for

Macy's are by physical our more Bloomie’s We and and off-mall markets new and market new bringing Next, stock with also that our and strategy. we are Macy's part In staff Market exceeded Market products. inventory. up store by by our of customer We format who brands stores productive X and Sales Market stores. our omni curated customers in in in under-XX to and XXXX, footprint these run as we will scaling additional stores. with Bloomie’s opened see in our and seeing upside XXXX expectations, by are is stores response. repositioning found open engaging Macy's encouraging big small-format This

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Now, outlook beyond. XXXX Adrian for our for on to I'll it pass and

allocation value that through execution capital. the by We enhanced be successful driven strong shareholder Jeff. of with Thanks, of our performance, believe Polaris strategy, efficient will combined the

the We cash will make we disciplined risk-adjusted decisions deploying generate. when

so, capital unforeseen need balance our priority Given consumer investments first flows of the weather allocation long-term sentiment foster preserve strength. By doing ability that is maintaining the sheet profitable sales growth we returns. fund and to ebbs and and risks, deliver to the healthy

low We light X-year to of spoke a to updated direct repurchases. through adjusted the expect In XX.X%. to in mind, of XXXX, cash achieving and do these predictable to that and will double-digit yet With EBITDA earlier, me share through continue challenges. in Jeff within return a headwinds the meaningful our walk deliver to we macro our margin and shareholders excess you to remain returns let we modest outlook. believe environment XX.X% of that committed that tailwinds range to annually, and will types Nevertheless, offer some be will investments shareholders and fund dividend

annual For low rate sales, we're growth single-digit targeting for compound net sales. a

We long-term ways. be growth sales to expect X our driven in

by First, our our improving platform; third, the of stores. replatforming and core categories investments and the the as of scaling expansion of technologies; omnichannel in depth of our digital capabilities as our marketplace, the and second, supported mall-based our well including off-mall digital breadth trends, merchandise expanding

recovery referenced of is levels we to the international for some As pre-pandemic tourism time. earlier, anticipated not

is within several the So next should there upside years. that potential occur

been we're industry, this be closely of same digital shipments the customers' we're our marketplace. margin, gross algorithms, as to digital aided targeting margins, a the initiatives to placement monitoring in These future developed merchandise past In costs, rate the use experience. within inventories mid-XXs regards profitability has as mitigate by and For lean recognize as growth optimizing year. we'll even a we do looking to and allocation. of at maintain the net through To additional environment the At to of our split delivery low solid and include data this, enhancing penetration while high inventory increases from the XXs initiatives pricing well fulfillment expense percent which historic sales. as assortment science several we've delivery reducing the improving promotional to delivery lows time,

In this item-level addition, we for initiatives quarter. SKUs online profitability began at aimed rolling out past increasing

SG&A. on move to let's Now

to colleagues' the SG&A our SG&A leverage. XXXX's fill. benefited number last savings remain our Polaris SG&A of model leverage sales XXXX, a to digital arise our permanent The in achieved time, from that other significant expect opportunities benefit stores. X a elevated and with a $XXX staffing inflation Macy's Network our in in same levels, more open digital increased support as educational expect when over SG&A At realized is initiatives targeted through pools, and a of over We expectations, Within to Based a from to scaling we be as we percent also XXXX well-being of on will positions reinvested financial, peaking the targeting be SG&A, X sales are years and benefiting years additional the next initiatives. cost improve to such marketplace. that from XXXX. profit wage could In efficient we to and portion the Media will million this continue savings

over levels portfolio revenues card migrate a few to our term, reflects to historic that credit the revenues. next In as credit sales slightly will be expectation the average debt we're bad This Next, percent and X%. targeting of returns. years near within the net pre-pandemic our pressure card below credit thus, of

to the and expect facilitate medium rebound X% rise, XXXX. from of card proprietary by debt card bad sales to credit revenues which penetration the about the will term, of in credit pressure we net However, increased offset sales help

expenditures capital We're $X long-term over our next years. of billion targeting allocation to X turn capital plans. let's the approximately Now

towards personalization Our to At data time, in applications be science targeting approximately our fulfillment capabilities XXXX, meaningfully digital real estate. and expenditures. continue our enhancements, also $X same our expect retail our to spend of we're primarily efforts. further In monetize upstream billion will capital stores we operations, allocated technology and platform architecture, the across

that has than have robust sale more over reduced in a We last program the X years. monetization $X billion asset proceeds

adjusted of an to well-laddered ratio X.Xx to of healthy to footprint X on which bank additional EBITDAR with Macy's, to positioning is includes grounded our estate capital investment-grade targeting years level cash are leverage access priorities, include: capital our shareholder billion and targeting all a This customers generate over best strong focused funding under capacity market EBITDA physical structure and billion while to which up the maintaining and will to allocation for of convenient to Those capacity asset continue scenarios; financial enhance debt cash our our incremental next of $X.X for between is After leverage support $XXX the targets. maturities, maximize our value. with provide first, priorities sale plan and second, assets economic strategic maintaining seamless development and given or and million real continue debt we're experience. debt to $X.X an Our on proceeds, to credit capital accounting flexibility generation metrics flow below. our free commitment our of and repositioning cash Inc. values with capital that a omnichannel expenditures adjusted

shareholders we're in capabilities form our attractive meaningful including will repurchases, of the further the led investment a enterprise, strengthen more strategic we capital Next, that in well to our value-creating share that to lastly, healthy investments and modest annually return program planning committed as increases And other across investing capital yet as alternatives. dividend initiatives digitally absent through investments.

time, fiscal As of outlook, detail our mentioned, increase for more want the of the of discretionary transitional the high the be the year guidance same as beyond on a as consumer erode I first the new to quarter. XXXX begins as will normalize. move believe expect market today to and XXXX At just inflation announced We our part a we provide levels we we well dividend first and X-year to authorization recovery income.

we Our are continuing may for pricing to to the on XXXX more and committed we our the and demonstrated focus margin cost SG&A discipline merchandise expectations challenging in discipline. delivery associated mitigation drive through market. our risks challenges, be margin, XXXX reflect our Despite a continued our strong initiatives expense what strategic performance positioning these in

Now let of me XXXX. year provide full the details our

modest flat For to than Macy's, XXXX. most with continued net strong saw up of performance Inc., be more AUR X% levels during expect we sales at to we

For results. of licensed That's X.X%. compound Digital be X.X% comp to from are plus expect net expected sales. between X-year a of owned we sales approximately our growth sales, XX% rate growth XXXX annual and

gross last due largely We penetration digital to range to X.X% be of down card to is From sales approximately the Credit XX.X%, perspective, of expected. in and of pressures. expect a XX.X% expected XX.X%. a margin rate expected is XX.X% increased from slightly revenue SG&A and inflationary between rate year, cost

that and is not approximately is expected million and and share earnings are year. to be is be $X.XX $XXX $XX between any to and be EBITDA Asset share to might XX.X% million million. between between throughout interest margin of Net estimated sale diluted Adjusted $XX XX.X%. Adjusted does expense $X.XX occur the the the expected year. buyback for gains include impact per expected

sales on the Now few year. trend comments within a

recovery second in strong from benefited growth by payouts still the favorable of sales net year We results as we to our in in more first were early quarter quarterly of first in significantly subsequent last year-over-year pandemic. makes sales the the annual quarters. and cadence. XXXX. of growth were we year-over-year stimulus our that percent This more penetration sales quarter, of this Impacts that and the expect our year first to XXXX the the affected the in the the acceleration than quarterly this results the our Recall are significantly more a at closely and that align targeting quarter pre-pandemic recovery third net net of in point quarters

and excluding sale XX% EBITDA, We in also the season. generated XX% is fourth asset gains, the expect our to annual Of fall of be in between quarter. expected adjusted this, XX% nearly

outside expect With quarter the net factors first and the first sales in Additionally, quarter. mind, remainder quarter, be fourth to of are $X.X billion $X.X of the between asset sale the we in those modeled in gains billion.

earnings $X.XX approximately buybacks. includes in anticipated summary, an our with any share, adjusted per include and For the posted share outlook presentation impact from are benefit million to gains sale and we several results compared that $X.XX will first expect generated the building not the again on of from quarter More asset pleased on we between to XXXX. forward be in website. in look included This and $X.XX does we are details upon our XXXX years. In $XX

to and for capacity I'll with resilient business, We some profitably turn to highly have proven remarks. a one enhance value. closing back further With over Jeff grow that, that we have it shareholder

transformed a Inc. Today, organization. is Adrian. Macy's, Thanks,

and integrated in operate successfully footprint positioned are well stores a market. fulfillment businesses, We today's to centers. with of compete nationwide and profitably We

us new grow team confident want additional forward value, passion execute our customers to my strategy in market initiatives for to strong continuing and company, accelerated Macy's, We their integrated and are dedication entire Inc. we shared unlock in results. gratitude serving and express to Polaris and the our delivering as customers one our the acquire to path I share. today, allowing

our I have And that, begin into excited let's company, to plans put Q&A. our action deliver We of and ahead, and an but a with for lot brighter future bolder and work customers. am these the even our shareholders

take from We'll first Matthew comes Instructions] of JPMorgan. question, Boss our which [Operator

another on quarter. Congrats nice

So year low long-term your single-digit Jeff, positive matches at Polaris this growth plan. CAGR revenue exits a

near stores model? in about that And your speak digital if we the the think business, outlook? So how this you international we you format to are driving and in term, first beyond momentum about think opportunity line as travel, could then time you're smaller seeing thinking marketplace quarter

thanks question. Matt, for your

a on first as the expect Adrian So we said just quarter stack. his X-year comments, in

business. going quarter like relative now to we're really quarterly It's to to going to So and think penetration see how -- of be at look last kind I of XXXX-XXXX all be our our should what we what comparing the best the business at year look we're of each And is XXXX. year. to a cadencing

than to are second -- the other the expect be the is. just at question, first mentioned. I how of quarter going that's part overall individual the your about X comment, growth quarters 'XX less To talk pieces to that would to you than look So and Adrian's do we let's

international on travel. First,

some of international affluent see the was our an lower best levels that because say big So increased total of Bloomingdale's Omicron. basically to business you coming interesting you basically pre-pandemic. X. our It this at back December. return We was is those customer XX% codes. experience an about chunk more at that did heard to quarter it saw you XXXX. look one and there. with us look about at you've A business when X% been back and X% means international that But the the had go of it to Zip got has digital back in Bloomingdale's the it certainly Macy's, more month with of when then, We

-- come, know tailwind. years looking we expect come, So to think seeing not a don't you anticipating XXXX, that about to that's future in at certainly going will but when and we're that. yet XX% we're be it for that We

Mosaic of we've storefront in in small for them we the D.C. to and And both have formula Washington, Dallas, for important talked choose location, right within that and the then one everything et really did think right seen that's value markets. location, brick-and-mortar, by really digital in down sight then that format terms they and in stores, getting Atlanta of Worth business Bloomingdale's you're getting us the spaces encouraging been Mall. between starting location, say is between is lines, mall and in pan ecosystem that looking where only not And a exterior what is Bloomie’s about is done cetera. what's you've that about with we the the right, location, customers being got that what this we've X that is opened question one. of we've those if formula comes it I'd offering and and But content, great have Fort there in right brand. full to that great opened We off-mall flexible results. shop Your the placement very retail what in but of where to we've And out at signing,

careful and kind between those buckets. X what we picking that expansion really in there. we're So off-mall very nameplates at of look are We in

site a and the We ecosystem. you're been Bloomie’s sure densification, XXXX, customers strategy those what that got stores very going to there. going we've looking past and well the got the retreat. closed have mall. into to Macy's. a neighborhood that both omni where got as And feeds which where as replacement new when markets see see see where us, that want a We've go it's has open pass off have store, And you in might the you'll have we versus to we're where you for to challenged that customers to a in plan and we're develop in at ready and see next make this we store we've then to We

question strategies. about now, we're our start that the new very with. about able Mirakl smaller teams excited partner And we're our So right tech now is the going right tech got now, working get. syncing we're on with we're talent that's to gearing up marketplace. And We've the with is, our so that. merchant that to categories up team which working our say up, And is I'd team what about last hiring right

this to mentioned lot year. we starts call, as marketplace add last on of a So our and value, that in incremental August expect of

move of Hutchinson Lorraine from question now our to next will of America. on Bank We

should much And wanted then of you're pacing for in talking How just included the about? share transformation $X I buyback we minute. focus think to this CapEx a how that billion about the program? for on is fleet that

Thanks Lorraine. very question, your much for

we want continuing now, prove make CapEx, have to thing with that regards the a capital store to that we around sure to into. So ourselves new our do is smaller we're rollout. This one of portion

around really terms the omnichannel of personalization marketplace. and Jeff digital rights. As have update formula focused the capital our we'll of billion fulfillment really of Those those feel entire on we're operation, a science question is across about terms our second our kinds highly $X is we in share We're upstream of actually continue plans. really But Where location, to infrastructure location, about the the around of we the earlier, continue dollars are are think location. things capabilities. focused your good scaling data these to And And stores, things our stores. performance and lot the like buybacks. the things feel our we of bit downstream, We spending capital that on as in our mentioned that then those spend. we're a

we best open-ended. We much very And the our cash, of in we and have shareholders. on really of billion what's that think that the $X about as interest view deployment we're excess as authorized, focused

healthy But authorization. sheet. program. priority very $X next including very return a certainly in meaningful initiatives, investing And but the maintaining we'll about us our investments, absent our first Polaris strategic and open-ended be The shareholders opportunistic talked buyback And a that us, balance to is is is about before, in attractive to the as accelerate capital more for the billion dividend of high-return we'll form really so much share we've priority timing opportunities will strategies. allow

from next move our to Omar of Evercore. on Saad question We'll

trends sector-specific It you did the was the it's doesn't follow-up guiding of looking to e-com issues for it then you It issues all quick like follow-up fashion on apparel it? it is peak? seen call business, separating on tempering all, the guidance? was at quick of sound all inflation a possibility kind kind sales macro Or the dampening or that and Any XXXX. quickly And it. seems a are at study the Jeff, sales. macro really on -- guys of outlook the like close have company-specific

we the the review with the e-commerce kind take me let of did shareholder So value. kind that study on really first business and of question

long to of comprehensive as customer, that a was just to main So respect customer we the it big points. the objectives a the medium value really this. going touch second just to all want shareholder the tell very of close call said, your And and in would I term. and it was was omnichannel in reiterate, had deliver it unconstrained, Was you one, kind I one behavior a X really review. question. to at we how we the And

every I working We time around We to for at really kind a Inc. that value single to that separation many, AlixPartners, just both greater with you digital strong of advisers. levels of very scenario and this And Board through Macy's frame. went that have one and and many know, than basically came on key assets. as the decision. our X would we been October integrated brand deliver in just things were the in And physical We've on brought months. hook

was just our The described, first as is, flow. one free Adrian cash

in and capital-constrained We the of be are invest digital in able business. to elements business our That's the one. not to

come one separation just separating stores. costs the and with that second high The is digital

say, with brands business. well okay, did be of on just really, customer, our And What As clear-eyed three, that. number to costs opportunities would and of as, separated being the happen what just the are opportunity to the risk Polaris Because should last our what we executional should in shed? extensiveness this having the of the we one strategy be pick ongoing an us then operations that. and What the would what up, would working? it give is review, to about from

are, So that. as initiatives accelerating within we number of a we mentioned,

already one, digital we're what marketplace. in that doing the the works, is one and obviously, which with is First was

So $XX to billion in in marketplace. come digital, more

and New categories. expanded

and would away being and the there. love tied that of asked for loyalty comment with of can really me Big flexibility let got our that our our came we've programs kind existing. business move XX% us personalization. into to fourth promotion love broad-based about to are all -- data-driven that, And conversation about a off-mall that we of of just personalizing lot but go ones one But message opportunity the to gives small weigh that things a So I way just expand lot to go that. in suffice journey. that it we're a from on opportunities And through earlier there this about. or the because the now then really to format so up is Matt the him for of I'd Adrian out customer this opportunity

just talk So it. about

Thank were that described position Jeff this just that key financially it's the strategy you, important that today, X was stronger is much acknowledge We're Jeff. even different just And in to is that important a durable. we from work a really fact thing One ago. competitive our business. than just years we're much

in planning we're target billion we're invest sheet. how next we cash a that that in same that years, have period. $X think And $X to spend We over more by balance efficient we're free over in evidenced billion time healthier addition capital expecting the of flow the to of X also the

the earlier. not and is it can was, are that with we net as future. the initiatives we got capital research alluded advisers So our into accelerated Jeff through highlighted of the that we're the now constrained, pursue to Jeff initiatives And

that of categories trends. right they strong expected. and dormant were what's fully Yes. really fully the through second now levels XXXX. the right interesting the is way they question What we're to that Omar, the about I'd And haven't very macro in the pandemic. say that all just kind your rebounded now They're be to

was both you are all to but encouraged pandemic great That going like the strong They're would categories ticket well like Macy's that through and chain what or be brands that's to big a continue be in Bloomingdale's But clothing, home fine Fine continue. Big are -- ticket soft when by to about the in or shoes categories -- was brands, were will right and through strong never me, jewelry There excuse a comp. pandemic, those all dresses the fragrances not continued improve. us strength was watches; supply the issue strong women's the good just and So giving the there pace. as as be was way -- a at issue. and I'm that brands and strengths starting sleepwear. think was demand for tailor that was quite really dormant continue. store, now, would which strong;

down, So up. was apparel always we're areas, to And still The athleisure categories and picking watch but they're good. they're the better. continuing casual are dress getting

we to Emerging everybody are going be So strong business. didn't for new denim right coming a we're for then we our forward. been momentum has That definitely XXXX. that's up. categories in cycle categories which business us. expect knows really now. doubled us, And things going toys, We the Obviously, like a have in strong

expect again it We in to double 'XX.

the going level. you that's tell that of the movement on would at kind of I So FOB what's

think demand we that thing as what inflation. against. really continues the the stimulus I at supply And we're and lap on package chain, what that the watching continues looking up we're with is on carefully

our So factored guidance. that's into all

of now next move on will Kimberly our Stanley. question to Greenberger from Morgan We

a guidance? when you midpoint not sales looks guidance, SG&A can the just out greatest quarters And detailed you sales in varying obviously, want like looks sure really help outlook we're then there. wondering, billion if down? And to got super of for the with you here year-over-year like looking beat extend or lean your and at either outlook, management, about quarter. It appreciation you your quarter? of $X.X be up your down I total And I guidance that, were, second really about overarching us questions you've guidance the year-over-year should on midpoint we SG&A, can strategy share, the SG&A or had couple Adrian, fourth and your XXXX, in the helpful. inventory of short variability philosophy the that would like start think to here guidance all you Maybe Adrian, of imply How for could guidance then come QX the XXXX it's of look just the with of very the If I'm about for XXXX. I'm if exhibiting any levels the it coming at growth. question. the third think does example. my revenue to revenue just morning. My Jeff, great how or to for are in Good your SG&A at beyond. of about were and and

I XXXX? at year, about this inventory XXXX, level point look fourth back a higher. would As do feel you look close this you some compared running to piece the comfortable quarter Or least gap? that of of XX% at there inventory with to was at to Is --

Thank you, Kimberly.

achieved a would and just we So And at think the say about also already is our and that talking we let as we believe about our bit that Macy's. they're outlook. little start that targets, we're me building long-term reflect what achievable that they momentum we've

key question, a built as XXXX part are I'll which and strategies feel into P&L, and record that that more the executing conviction is confidence look building we and also the a SG&A, the a the XXXX, lot highlight we're a to what's we've bit relates your more it of around at as around and Now we Q. move and in track

around quarter we we was sales inventory And years. exceeded every created margins into XXXX. of look, And a XXXX, beyond as a as SG&A. expectations we expanded leverage XXXX, productivity bottom to grew this expect by learned as that. And in XXXX new our we expect out the we and disciplines. do pricing So leverage SG&A lot quarter. SG&A capabilities move we We year. we But see about in top merchandise about And in lot peeking an elevation think this driven and line every

back regards last you the first if we to business So to lot of of the adjusted healthy able results generate a year, think as of as of shareholders. in level and we're lot having a to low margin, free flow in which time, about pandemic. the investments in in at support double-digit with that dealing where returning same at still to to point, strong committed our a levels, were really order quarters, well quarter much With value your our EBITDA we're to very cash the being the

And so quarters QX we do outer expect that through our first quarter will be stronger to relative QX. of our

a approach of very terms additional Now measured approach how took we in we quarters. those

As of we earlier, could Jeff for in social revert, mentioned with consumption upside a potential around events regards tightening discretionary that for areas if and to really number headwinds have to side the be the as bit well a out tourism. the potential mentioned factors international with impact to Jeff as headwind in back employment tailwinds gains that spending on balanced certainly recognized potential start like to inflation, greater apparel work earlier which consumers, with going demand

measured a very So much view.

thing and by also to is point And driven was strong were to packages. third so sales by we stimulus quarter QX recovery key QX have consider the the that second about through last the driven and heavily the that your year, and

as our as very the receipts, we're through pre-pandemic beyond. a where level key is productivity in is as both our a makes really level. with throughout item very well giving our categories. expect an healthy would seen as better of but year we the modest think year. to able in better we the entire gains of our consistent not part forecast by this The science to those comparisons demand we with only data have is, those market, seen of then sales inventory I much quarters to pandemic. by that necessary the cadence that quarterly reiterate all our to the view being in And to than levels channel science be also more using demand and what our data quarterly that, where year-over-year about science our demand, look data understanding the But XXXX inventory we terms And cadence to lot more as inventory, to and us in including forward, we inventory and we've the ability in lastly, down is The forward way healthy we've migrated XXXX. a as a categories confidence marketplace So into more maintain productivity expanding categories, level of owned moving new align

take Paul next from Lejuez question we'll And Citigroup. our of

Curious, as about thinking how years year. about next to the this ticket? from how between CAGR pricing how sales into over thinking on are versus just through factor Curious the the And you how build the will you that? think several AUR gains transactions about 'XX, breakdown you're

think you about the So much as that When on on see is focused XXXX to X.X%. you to growth we're stack terms low up several what of CAGR in a next about we're for sales looking XXXX, we line. very look the our X.X% years, back top single-digit at

think within driving our is well. core in as customers business just we of Macy's the that, are extending Now for the are that known the shopping that having things new we're of categories when about and a more that frequently their you've combination spend, core are number but not categories importance to long expanding that active one time, that also

will to customer active that's than we kind more XXXX. those importantly, certainly into that, years. going we So upcoming AURs drivers growth increasing, the we the the in modest a of levels the be our expect, much purchases, that saw in getting them But to expand as are support low do forward, of move key single-digit but dimension of categories, new customer file what frequency getting keeping

from next now will to Chen Cowen. We of move Oliver on question

quarter. congrats Jeff and Adrian, a great on

going be bottom sounds on of near That also key gross the what's digital the there. as with you interplay some well With business priorities the love to term, and replatforming. major mentioned as margin? think opportunity. as you the Would like your thoughts margins And longer about a line

we well? in metaverse differentiation rethinking the augmented virtually, the as you're to how the as as approaching look you're well and mall reality how marketplace. And driving As beyond

You want to go with our go repositioning? Let through me marketplace.

Sure.

a at we're trusted either have looking we of to merchants through inventory say would content categories where customers you marketplace, ready look we the we're resource Macy's at digitally tell announce the approaching lot in, you that. that we're how that existing with not as for owned to a And VDF. let when that the that in But Yes. categories. offering have breadth of through of still the currently kind we're just are obviously, we stages Oliver, not have, or categories me tangential accept I

the introductions kind of of launch the kind kind over XXXX. that of road looking you we're that's will is in next we when years, what expect about like think we're So will of how at of look but August looking guiding map categories number of at what the tangential how this,

our penetration of are the as relates time. really gross it margin, expect pricing as productivity the things. around by as as we're retail higher key expense. Oliver, managing delivery initiatives margins levels to And inventory have over increased is how the initiatives we our that as our to offsetting we're digital well in that to improvement with to X well driven regards One pursuing

last our number reducing into have So we and the to around split that's year, distance delivering initiatives year inventory the a of are customers. getting lot out relative our a entering number into coming of orders of that reducing traction this shipments, of

traction we're the So provided years seeing outlook the that's pretty about that future the reasons one elevated there. of gross algorithm. into excited an of And in margin we're we

is with apps. As an done this work replatforming, mobile extension that differentiated we've to the to think of regard with really about experiences regards our we

launched level want omnichannel conversion a replatforming able customers our strategy. in As in our expectation the bit our as very better about seamlessly healthy experience navigate part our assets since of a sites We our manage the and to store our resulted refreshing be we've it earlier, we to And of mobile connected higher similar. convenient very of our is customers help experience conversion, October. around in talked of AOV, website a just through to and manner for a our broader

will So that believe it's accretive easy a to you and navigate the those And kinds about the be which way us lot new around XXXX, of in things heard we really experiences that investments is differentiated the experience, continuing features, talk website. brand. to

with And you about as and about and demand? how we Okay. What pricing And increases in a appetite think cost environment. quick pricing as vendors inputs customers' do broadly for elasticity? the follow-up as might you sharing more be inflation on that think well the

what Yes. is item you're on depending it the and actual category item, and what question, a fashion. story it's it's brands what great a Oliver, is, whether or is not whether different opening not price, in the key a it and in you're or

it all on get prices chain on. we just of of I'd the this, points big-ticket very dealing What and and could price the ticket pass that increases in in production, challenges found big those. increases of we different some supply the we So all higher cost is to led way is into big have really with done them we have Customers We retail tickets. sectionals the 'XX ticket based for -- we And price most basically that say where accepted some rules. saw the beginning the because what like through. of those and you larger the higher items, were

-- As to something sofa you customers the of have $XXX those gone or been mattress with get the year opening the margin, to $XXX it needed same pushed make to cases, into price have back. business, $XXX. X cost by might increases have or kind $XXX, that In might the

We're within the businesses. of adjustments. kind those looking of the made we've the all So architecture at of each

our to those about your mitigate to bulk where areas. we've ticket brand our working an we've or be of got that categories, in learnings, cost for there we building ticket When So -- think them. we're of those don't take able private believe sourcing additional a had and question that partners, into in customer will each higher -- our we about our brand with the

we we science. we our be having tickets. the then on But do working mitigating basic based a fashion, into sometimes working are on fashion and it's pricing more commodity, if carry brands are we tank, short, of could tee, short. if in can ticket. of more the same we're what it's many our basic But with business, higher goods, put embellishment, really make, could often more So do those the be which bulk -- those we're focused how We

markdown down. end at store doing is, coming with doing at a through more localized goods So and the not we at anymore. that we is a then robustly look selling what particular might have in to stores. level. are demand opportunity lower or level they're at that's the level, dynamic with get POS. price, into We another unit We're it a a you that on we And have generate back when it different going SKU the mark national those pricing either to get outdate what that to store certainly fulfilling might were sell-through to what customers those more ownership We're able margin a is, the at

mitigating XX% in tickets. just pricing To much us expect decisions do that we more our have in Paul, earlier increases are in the from all So higher question analytics over we effects of little where some are that up a data science modest and helping of are having that more XXXX. of 'XX. we AUR We Adrian answered the were

across it X% in be in of to all categories 'XX. expect We the more range our

on now our Michael from question will of Binetti to Credit next move Suisse. We

and questions you And you side. seems trend it, the relative of understand all guess for to the today. on my thoughts room to bit what a fourth as so gave some of look for quarter you the us, quarter third sales XXXX was tourism then help Would understand here we little year. just the tourism I us leaves on first levels at us -- there? detail quarter, Thanks kind outperformance for taking and for Maybe can like

fourth over But first is 'XX. to the in just quarter downside of the term almost You I'm how first quarter above quarter a you here about sales, think quarter -- X% your X% just in your retail quarter? of the trying the XXXX. did sales near upside, fourth little below first guys were frame guidance

the Hey, take second Adrian the question. And me Michael, have let I'll one. first take

was a quarter So what with through I'd is X over brand. tourism, XX% different, Bloomingdale's slightly was say that drop. better, the any at quarter only X the And so that was X quarters particularly

we mentioned earlier mix Generally, 'XX consistent. about to saw pretty is that XX% within question, And did see a the of on I change digital. of as that it's was tourism what was be business. went business More to we it was So in it digital, international expected. XX% And the digital. we

advanced very look We looking Bloomingdale's any at what's plans, like affected bureaus hospitality. I'd chain and Obviously, the So in -- number there's doors like, XX this are signs. know going with store. know like disproportionately connected on that by in and tourist travel Clearly, say it very that Macy's carefully on by We with it by what is we're we're what affects the chain what looks that bookings the it. country.

and more to And come carefully. back do believe mentioned, our But built to We're it aggregate. planning going if have We don't any expecting back. 'XX it's in of very were that for 'XX watching were into come to that come XX% beyond. down we very, we're we as back. in So that of

Michael, So thank question. you for your

we As the in position, the it measured of coming that our lot first primarily relates competitive to QX, to because XXXX, of as that throughout our into cadence how just out to thoughtful position, the at guidance of QX quarter, in our about inventory momentum thought in be which to really and spoke were we XXXX terms including looking year. availability. our able we And quarterly just and forecast came inventory very a have for in perform cadence, we we

geopolitical earlier, we've the continued headwinds uncertainty, evolution we As potential Jeff in wage to seen about and with think of potential increases. even with mentioned with that a recently the really had the demand, more balanced bit with tailwinds inflation shifts

to as expect we to relative we So we XXXX. this have modest what comparisons But makes year-over-year have look our more at actually growth than in yet, XXXX. would seen our comparisons

XXXX. things consider we for of the factor first into are those and the also thought we about really that subsequent kinds the quarter So how quarters that

And and March Michael, the the quarter that at add on what that 'XX, really business. that effect to just was it to said, Adrian March our stimulus happened drop first look that, of had when you in

it it between and comparison you a when think about 'XX, that about think that So as way.

We move will Carla now on our Casella of from JPMorgan. to

for And Carla. on Mike quarter. congrats is on This the

curious, the schedule, with conversations should in ask the to updates kind there about wanted of And agencies? just was kind a to Just your rating ahead least on noteworthy I put the other question for kind now we were of in of any debt expect of of regards focus pay of capital that on allocation top at metric, gross pause is the as you priorities? debt-to-EBITDA down, line kind

just Thank point, you for balance your with we're efforts question. we've the taken pleased To very that to the sheet. your delever

As we I And bit the think million actually note down paid last on January. was us mentioned our the to in paid #X about is which due is healthy of $X.X of billion ended a ratio, year you know, under priority basis, performance year. with we've for we that target off a the you as earlier, accelerated in August $XXX in XXXX, notes a And that senior maintain the an sheet. we in of leverage October X.Xx. the When well had X.Xx balance

forward, Xx Xx make going at leverage sure below. that ratio or to or below So focus is our remains

of with balance to our rating with have it So continue and agencies matures our the constructive we'll just and sheet dialogue regards to continue the structure. capital debt pay as to health

next of Haskett. Chuck Grom We will from to on now our Gordon question move

you the in the January I I'm in any being inflationary cohorts I lapped softer. income, patterns spending I question, by curious, and apologize of for end pressures seeing light but guess near-term Credits, stimulus, just curious Tax of just spoke you're And change was to if noticeable of these cetera? some Child et the

at Chuck, by December it between when -- no customer when look look and January difference really slowdown at cohort. November, when you I you looked the

of lot segmentation. weather there And by income of you at country. obviously, differences. in when not or we So aberrations But at if look some type, a look spend the an based parts were all level at look our it of at you it on

will We Group. move Telsey from on next Advisory of our to Telsey Dana question now

morning, and everyone, on the results. congratulations Good

As new you thinking how just that was you just years? are then for XXXX, X about XXXX? great mitigation, number, the about how in delivery thinking over that which customer And think increase target are on X next you a about new expense the customer or following

I'll second Dana. and part, customer, the take have me Adrian take the Let

and came XX.X have is getting we that fourth that So right third customers purchase now and in I taking million that brand customers think on the second XXXX the into real focus a from them. and

that them and customers done. one them because coming all that of in our diverse. personalization working that bulk content be of to and and not the could are of got -- so through sure these you've do of And majority now make via to technique digital, really interest seeding they're have a are We younger more

using second So out our purchase content. making a that see data and sure we get of analytics personalization technology that them and and to

when Obviously, we're coming new big you've initiatives get customers. ours. new focus a of in, to got that's So going

opportunities big customers will through that the of with of us that. One marketplace was come for new in front the

So opportunities of I program when think loyalty our one but biggest in our about of terms personalization. is overall

those new stay for we looking sure making offers great customers So those, us. and in have with coming them to all at

is expense. efficiency business just growth expense, relates really to delivery as it digital greater relates paramount is important enterprise. our delivery to the as Dana, because we this to just the it achieve And strived to so of

bit as points digital over was the did we XXXX, penetration quarter X XX%, increase about in fourth context a percentage XXXX. Now of which to up of

pace to of And so digital penetration, the of mitigate over delivery time. this have given increases increased a we expense pursuing we're that number initiatives

in that really examples. number of receives their kinds with just shipments. when the really couple a One a one And you reducing the give really is of excess about place packages location selling these that split customer packages into is consolidating managing that items order. just actually is me we actually this of fast-movers. Let we And the number minimize of initiatives can put so any slow-moving

around about The be we the really think other located. inventory is where piece how should

using we're way to So the level. item appropriate data better all level of just think and we science about country placing an our as allocation where the strategies, the replenishment is inventory where to actually channel location and inventory the we're demand align by with down across

that at can this And profit. individual as really organization in on understand we're that buying actively it the profitability. we the thing level chain some expense really the help supply decisions complexity rates how respond things items. of also effectively, like doing within terms look managing is the by delivery third well. item looking very impact profitability to and dead at The mitigate we of net And X how return within customers call We of our those

we're our business. So with the as continue sum expense the really happening to using understand increases de-average products really it to is, of look of to ways business, mitigate lot a to digital what's penetration at analytics within delivery our

And final Anderson we'll move our from question of Jefferies. Blake on to

in that environment, promotional if the if you apologies we -- AUR much you know mentioned for expect you on and promotional fiscal X% ask for on picks I missed you you up to how have to of it. baked continue wanted Just may be talked Did X%. XXXX, growth about conservatism But all? environment, the to at

closer what we've do I before. lot got environment we to ever that say leaner I expect buying think So a the that lag I'd the would of to heat promotional has just learned But than value up. And we're everybody all inventories. -- say is

when the book earlier expansion. we So question, look at to amount the expected demand, to of you versus the ratio our margin do be favorable expect stock to Kimberly's very stock-to-sales

we're certainly the So helping and is to for really that. and for the -- offer the really looking also those clarity our cluttered overall in stores some issues of too stores about more for customer, the seen and sell-throughs having content curating be we've the edit much aggressive with of and

we expect. gained years. going the with we able So consistent to level in inventory we're that of do expect basically that base the And we've to the to over lower we're past leverage the be demand going continue bring to couple

at of us maximizing be time. with how science margin to we've our and changes, promotional when help even that the and think for other all pricing will tools be And is that for really ready environment, right when going of I the we're big through ready data initiatives customer learned of So the the our one if increases, everything it demand, we whatever the will the it. for

at It closing any over no I'd or for the this appears conference additional remarks. audio time, we back like turn further to have questions the sir.

your your everybody, great attention for Have a and Thanks, day. in Macy's, interest Inc.

this your concludes for gentlemen, call. and conference you today's Thank participation. Ladies