Macy's (M) 2 Mar 232022 Q4 Earnings call transcript

Greetings and welcome to the Macy’s, Inc. Fourth Quarter 2022 Earnings Conference. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Pamela Quintiliano, Vice President of Investor Relations. Pamela, you may now begin.

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

the we participants ask Given in limit please Q&A time to questions constraints, their one that the single-part question.

posted our our morning, a has been this website, release, of slide section earlier on from press Investors Along with the macysinc.com. presentation

from subject Act that remarks, and note this analysis comparisons Keep mentioned differ Litigation given performance forward-looking the the to information otherwise supplementary our Comparisons assumptions These to today. forward-looking to assist the filings your speak Private from and includes morning statements are expectations impacts these the uncertainties discussion to our in data versus appropriate XXXX. best all of to addition In benchmark to mind materially subject prepared The Commission. be that in Securities pandemic. are that will factors noted, Securities risks with Safe that, Harbor contained the Exchange results is of XXXX of and to our XXXX. cause of presentation actual in will to provisions where the you are Also Macy’s. unless and Reform from the detailed statements could uncertainties provided

be financial results providing In non-GAAP operations, will certain discussing the of we our measures.

website. as as earnings and the release can of Investors on find regarding our in You others our used financial information non-GAAP our well additional these presentation measures section

X call after will webcast will website on archived and be on X the is conclusion as Finally, available website. our being this call A year. today’s it for our be of a replay hours approximately reminder,

to over With call I will turn the Jeff. that,

and good thank and today. Pam us for morning you joining Thanks,

we the time, In changed, and we we accordingly. At our consumer adjusted start same like XXXX, recognizing execute the and operations sheet brand, while continue achieved our that still We quarter, home, balance were billion. down in colleagues. of I’d important and category dresses, and So receipts trending Beauty, outperformed goals. our casual active giving challenged. ones clothing, to and to luggage sales are as fourth every In soft even fortified by $X.X offered to net tailored our behavior customers. rapidly freshness gift long-term

product mirrored pre-pandemic longer periods selling were and and remaining but X% for markdowns expected to our updated than when holiday and were in provided than End-of-year demand shallower down Peak early spring January. XXXX inventories deeper. XXXX. we lulls was patterns, winter guidance and XX% declined Post-holiday stronger early contemplated were to

and we demand category weakness Looking see and of amount channel, began We late and category signs adjusted back composition quarter. the to a on timing, in by of receipts XXXX, brand. shift first the consumer in

quarter AUR As chain we results. fourth XX.X%. mounted closer promotions built open-to-buy unprofitable our quarter strength. chase of We gross did industry-wide bought actions We of macro into markdowns rate a improvement bought benefited and sales. pressures and margin and to measured not consecutive with constraints, inventory better-than-expected were on and ninth areas These reserves easing had held of supply and meet,

income discrete was a margin to was tax including XX% state of adjusted benefit diluted resolution $X.XX, and a rate favorable litigation. EBITDA adjusted EPS $X.XX the Our related

material and drivers. million navigate debt and $XXX had XXXX. end while uncertainties the than in year, Our to the until financial cash, $X.X maturities health to no At growth continuing of stability XXXX invest billion enabled debt us of less we

card from view we members portfolio. of Turning department high robust tiers, as to have and penetration off-price luxury, conflicting loyalty there modern XXXX, full consumer a our aided operating data regarding a income credit is the of U.S. by store to

XXXX. has will are revolving prices we credit Jobs wage continue than higher. On levels. Inflation pressure disposable is spend strong are better are services but and relative savings under for the levels the and But towards goods income surface, across the and surpassed elevated historic and consumer shifting goods. and rising. Adrian wages growth shape tiers in of expect to will and provide be our allocation XXXX specifics discretionary essential income on believe to services is outlook,

opportunity. reprioritize as spend, Even consumers there is

year loved hybrid are continued there flexibility work meetings We expect to the the last With foundation XXXX, adjusted a of personal and and the be sustainable X expansion on of for crisis years, to the was and for occasion-based XXXX longer not on And travel. term diminished attend EBITDA vacation XXXX gift low and sales a and margin continue. events in-person management. was with stabilization. model, more in growth. demand ones, desire go Reflecting believe laid has a we giving double-digit

pivot merchandising. let’s to approach progress. made So, strong our Macy’s, have incentivize discuss the reevaluated to materially we changed model, cost upfront At and an Since our negotiation a reduced how merchants. we markdown allowances we pandemic,

healthier are reserves to begin Increased us signals us react based intra-quarter markdown work more brand to Macy’s, closely sales partners way. and in brands Inc. receipts open-to-buy enabling versus dollars. read grow bonuses functional allowing So and and to mutually shift responsibilities with on customer strategic to to a

our XX store on XXXX, platform, more and Style, year new their attracting in macys.com, been than demand in Toys"R"Us sales also customers marketplace brand Your and the customers X.X categories the year an XXX style. celebrate omnichannel Introduced personal within a over for have every encouraging merchandising Macy’s new with ending and million customers. introduce brands Beyond to that Own Macy’s, stores signaling toys new doubling for launched

added to refined level further continue such location channel opportunity enterprise. competitive and analytics science there across capabilities more and as drive and maximize We even and productive is and pricing and the enhanced data sell-throughs. embed pricing markdowns profitability we XXXX, to In

year weeks. reporting progress Every Mission purpose long-term forward our our one all introduced the designed look platform advance on Macy’s coming for brand also social We to We One, relevancy in stakeholders. to

completed And turnover education our a in actions since advantage reduce employees. we and colleagues. introduced wage increase helped invested roughly resource, per force reductions XXXX, seasonal minimum X% hour by taking and These our X,XXX approximately with Education nationwide overall benefits. partnership in $XX our excluding Guild of We number colleagues free

XXXX priorities have our and a entered record of in position investing executing periods sales of be operational even and strategic track with financial This of we proven strength and testing, scaling in a for We will margin expansion. uncertainty. year,

our offers including two, three, luxury; and as number off-mall in and In the These then, long-term our marketplace; CAGR to have macro in brand growth our we stores; vectors Market described and existing invested and vectors: single-digit data sales broadly science addition even on one, primary Bloomie’s of have focus when we Macy’s initiatives, Since reimagination; we four, will private Macy’s were analytics, five past. goal by and five, low personalized contemplated fourth we pricing XXXX. personalization which as quarter pressures communication, growth intensified. introduced steadily have annual the

low for are currently both beginning low this annual growth We a an single-digit in license off sales decline net and targeting in single-digit assumption comparable XXXX, plus owned sales metrics year.

based impact dramatic assume is on a timing not consumer several and in rollouts does of target Our improvement and health. anticipated the

XXXX proof we shortly. that points their and an confidence SG&A strategic discuss morning, us making are in We which This will and give in growth assumptions, will investments vectors, future profitable of provide viability. overview these investments our are fuel reflected including Adrian the to CapEx five

Officer her and Chief the When roughly strengthen Macy’s So, years Brands let’s of we infrastructure became to her start Brands. with reimagine, promoted built our Private grow Since and priorities. Merchandising to ago, capabilities X then, role Private was one top portfolio. the have

roles merchandising executing have and sourcing We a The broad our created is support. a brand team private dedicated and team and for differentiated, new defendable with cross-functional vision portfolio. design, durable now

in Our consumer approach is rooted insights.

Brands brands We private differentiator Macy’s our business, compelling gross XX which currently days customer a digital is brands brand hours for XX,XXX of drive data our sales. strategy, community engagement benefit of has surveys, combined be our fit margin. XX% online on is focused informed loyalty, sourcing, of conducted key Macy’s and Our in-store and Private identity, The of fit design, portfolio, label and roughly shopper the of five value. have and of relevant go-forward has national which loans. XX represented our team to in complement original strategic over research XXXX pillars: and matrix role size This hundreds

will Over evaluate brands. all X them rigorously the of years, we and and replace next reimagine will refresh,

been to our portfolio point. favorable We mid-XXXX. results our quarter inclusivity, in customers last life will stage, initial new Early commitment INC As every and have part year. preference fourth sales XX% to with reflect update an of across started of price style up with

XX,XXX to on-mall second by one-fifth X currently smaller our turning square vector, play supporting the or have and feet So, our stores growth of integral Market in our our average an These Bloomie’s. locations. These about stores. format size Macy’s to omnichannel We ecosystem. role X roughly XX,XXX off-mall

for at fourth Looking by open X% the Macy’s and owned X over Of-mall been by Market the respectively. a sales and have Bloomie’s increased licensed year, quarter plus XX% X comparable that significantly ease are higher. checkout colleagues conversion points store, availability XX of of the and mall experience scores XX is and locations neatness the and on layout above of customer process to

Thus position, plan we XXXX, opening accelerate present of Market Bloomie’s off-price or Placer.ai and existing cannibalization brands With and look we in and opportunities X.Xx on When concepts anticipated lower markets, we locations incrementally a are in off-mall visits include beginning to and to by In provide X like strong take than than successful will XXXX. unique liquidity opening continue on-mall. online. X most customer grocery, differentiated than our prepared data, higher openings as advantage rates acquisition centers more outperform, far, centers if option. that they According to to have are new Macy’s high-traffic products where themselves. in new our are is we off-mall

Macy’s and We plan dramatically are and Since X XX plan year. closed Macy’s our and today and locations, XXXX. currently are when then, locations February different right we we evaluating announced closure the our of this approximately store close another off-mall customer XXX of have number fiscal ecosystem in to on than mix

exited that base our closures roughly existing is XX% experience, shuttered while Today, significant store four-wall profitable on delaying a are flow cash others have underperformers, our basis. and dine improved positive. centers the mall We of most of

online growth Our vector is marketplace. our third

Macy’s supporting a that are recruiting, last Cross onboarding Over September, the customer sellers. Since last focused base year, total launch shoppers. our its had we on have marketplace of built team and over XX% we identifying, found

Additionally, new gives high younger of velocity more risk; sell-throughs; brands our choice to categories scale; five, that new a customer inventory ship have per six, certain enables and historically channels four, larger two, customers captures in a a allows higher incremental us marketplace, units have average opportunity and into videogames sales limited categories brands quickly where and order as move and three, offers value number such order; us one, drives wanted and for without not electronics; we adjacent at to do customer. attracts

plans to have Macy’s Bloomingdale’s brands We on and back in this to year on half. launch marketplace marketplace add X,XXX the

annual Bluemercury licensed our comparable growth Luxury anniversary, both XX% celebrated highest history. more Bloomingdale’s plus the In of is to for vector. and X% achieved and sales XXXth teams. At Congratulations accounted in owned year-over-year. Bloomingdale’s, volume which fourth spent its members XXXX, sales over loyalist just their

Our $X,XXX the defined annually of who more spent X% as least customer loyalty at list top spend loyalists year-over-year.

been data categories areas. we analytics and used of at has this under store been allocate assortments we base, including mid-XXXX. and mix our Over center plan brands refreshing we our have our leadership has the accelerating positive locations. past Response top level, since and several program remodeling on a And on core across partners an been new from years, elevated XXXX. in customers and to Bluemercury and have

as Over loyalty sales, be Outstanding base of roughly service, proprietary fee. XX% grew national exclusive nominal represents and customer twice spent by which customer, and our the continue cutting-edge to over year, our much past active and top brands priorities. as events XX%

our luxury At with to on presence continues brands. strengthen great Macy’s, our focus beauty

brands actively X where departments past omnichannel new luxury been existing beauty has to on focus our we adjacencies to beauty La brands the the experience Ford piece some Over years. add floor These next and several with plan X services. have renovate right-size YSL Jo like Mer, been Dior, updating key Malone, upgrading Armani, will brands, and remodels, years, Creed, Chanel, beauty year and roughly our and over XX Tom A per we Beauty. full are

events Made Love are upcoming our Show. with Flower We as at working year’s memorable experience partners luxury also create to Dior brand With this our such

to build The loyalty, offers and at customer have lifetime personalized value margins. By This with can level, targeting communication. fifth run year, is customer growth we tests further protect we vector owned the roughly our tens experiences. grow and on plus focus licensed Macy’s The consistent of members, customers, cross-channel including Star of comparable millions sales. of our test Rewards who and individualized Macy’s represent XX% promotions

with tailored intimate. refine continue make early we experience and more pleased to learnings the and offers will to are communication We and

exciting an Macy’s. time at here It’s to be

XXXX exited of department to what successful a understanding a relevant, flexible have with We firm modern and means disciplined more store. it be

committed are freshness We to across categories.

us allows pivot to products, promotions model and Our messaging.

We and and buy open not chase sales. will liquidity to buy conservatively, preserve unprofitable

amount, data positioning compete in evaluate and signals of to We the will are customer continue inventories composition of regardless and to confident to environment. and us the macro and indicators to we win respond mix

with So going our it turn am outlook. that, fourth over more forward for on Adrian quarter to I and to detail

positioning. and we driving built was and a year forward that the strengthening further XXXX our store proof uncertainty are us and Jeff good modern business disciplines morning volatility Thanks, everyone. and provided department of our have into

across to spectrum. and us to model categories, customers diversified Our brands our shifting demands value of the allows respond

ahead, confident investments will profitable growth. that look the long-term in are our are vectors As we we five today drive we making

to We testing ability on will these and an initiatives their perspective to we ensure a iterating return educated balance critical with to our high business. scale that contribute

take for XXXX our value five a creation to levers moments beyond. on will results expectations fourth the I additional providing and quarter walk details few our of through before Now,

billion we XXXX. a an decreased prior for licensed X.X% net omnichannel year down to First, owned Comparable plus on of $X.X sales, X.X% sales generated fourth the of sales versus the basis and decline X.X%. quarter,

second the lever, to creation Moving margin. gross value

full decline, higher last XXX XXX year XXX our points inventory was sell-throughs. fourth markdowns to to inventory Of margin promotions robust from margin, due by XXXX. higher in driven both year-over-year led down response to to of of the merchandise and rate composition primarily contemplated relative points level environment, and when when promotions right were points at reflected retail our quarter XX.X%, gross level the markdowns and of down lower year’s our industry outlook. the promotion the Our provided basis price NXX was versus basis This and prior to constraints low which competitive and commitment and we basis year the

markdowns While last better expectations. elevated they and year, promotions than were were versus our

Despite owned increased prior above fourth shortage throughout ticket driven X% However, in by increases inventory due year trends retail. merchandise consistent seen in Inc. category was rose degradation, quarter, step with plan AUR the margin to Macy’s, mix. and

basis and over increased decline X%. in year Delivery to XXXX, last AUR points digital on gross margin was surcharges. in owned penetration. to year, a expense XX X-point delivery was Compared primarily below the degradation increase peak For penetration lower a due digital X point

productivity. XX% The allocation XXXX. improved In sales on inventory inventory Inventory to drive forecast and XXXX, demand, ultimately, focus and more flexible better sell-throughs XX% turnover initiatives, supply sales. year across data inventory third lever We XXXX. made will timing chain. we to flow higher more X% to receipt the in advanced including and and to productivity creation and value more automation significant improved analytics down progress declined X% compared is leveraging last and Inventory year-over-year to was

to a to needed hiring costs on sales pay, the productivity our low EBITDA Retaining Expense billion. was to XXX last of lever. margin. and and million is sustainable continued target basis to remain was year. decreased to or driven expense incentives basis our controllable a with percent XX%, SG&A higher disciplines. and in year-over-year imperative CAGR net by operate primarily increase investments $XX as the adjusted increasing points deliver discipline The $X.X SG&A competitive sales caliber at across rate X.X% align fourth single-digit XXX low the than SG&A XXXX, creation by We improved value best managing benefits. talent double-digit colleagues Compared our points. focused is and

million minutes. to of year, rate discuss make $XXX our we result Media However, continue investments further for Macy’s in $XX revenue in XXXX our to quarter we have the of and delever. will a will XX% made net few and people, as had the SG&A, in expect this the up SG&A to I Within Network XXXX. million a

card $X expectations. Credit million but down above year, from were our million, $XXX last revenues

primarily card a bad prior percent from in or revenues basis and sales, As the portfolio higher higher debt the year, net of points credit levels. XX benefiting than better-than-expected X.X% were balances

in Jeff mentioned, trends, expect we rates and portfolio, to our consumer Within to pressure see debt bad slower repayment continue XXXX. the we usage higher As be levels. credit under increasing

watching While the stream. to credit not closely at the XXXX get and profit levels, we of metrics is perspective these credit are card component which the the on consumer largest revenues, impact on particularly revenue potential share,

Protection the Financial the may $X.XX proposed expectations, tax Fourth $X.XX EPS Due rates XXXX to reflect for potential uncertainty have interest are exceeded and proposed the program. card estimate in income we does reviewing Adjusted better-than-expected from fees in outlook due diluted tax that not on are any state rule implications the addition, relating In largely changes effective quarter to impact. our the around XXXX and the to rate evaluating due our settlement. $X.XX the EPS excluding proposed to benefits Consumer XXXX. Bureau’s credit rule, interest late even favorable versus a lower a was and income for higher

value capital fifth lever allocation. is creation the Lastly,

We lower billion cash year-over-year operating $X.X continue quarter. in the fourth returning year. balance an capital in balanced was to capital billion generated to business refund due $X.X with decline a CARES receipt last to a Act on take healthy $XXX flow focus million shareholders. investing of allocation maintaining and we sheet, XXXX, earnings year’s In ongoing last to of The compared and our to primarily approach the

capabilities, related we enhanced and supply upwards invested two-thirds chain and analytics omnichannel modernization. and data $X.X expenditures, During the to technology, year, capital roughly billion digital in

inflow an of from Free of XXXX. real million cash $XXX was inclusive in estate flow proceeds

in discipline adjusted debt adjusted to health with our and strong leverage target. X.Xx, an contributed sheet with balance to has ratio EBITDA of Our line focus around leverage

no of maturities over debt billion debt paid August inclusive XXXX. COVID since during XXXX, long-term June of have $X.X the until we $X.X billion XXXX, have in secured note down We and issued material

benefit environment. from fixed having rate we Additionally, interest a rate debt rising in

balance profitable sheet invest long-term us capacity Our growth. initiatives gives in drive the that to

of $X We XXXX. capital expect approximately spend billion in

chain XXXX, X analytics, we through and $X Over data omni-channel capital years capabilities, expect growth the up focused technology next our and digital expenditures spend vectors. to supply total investments, and on to in including billion modernization

increase returning continue in and recently dividend repurchases resulting dividend, to share pleased through annual $X.XXX dividends cash a expect to of We have shareholders our share. are per and to a in X% quarterly excess announced

continue apply thoughtful remaining excess to our cash billion will approach with authorization. repurchase a to We $X.X share

guidance Next, XXXX I’ll time spend discussing some and expectations.

XXXX processes of Our the our the scenarios consumer goods we to how surrounding environment. The our low tools end and we regarding discretionary macro shift both and non-essentials outlook of give and and severity offset from heightened pause the reflects high various headwinds, between uncertainty To essentials believe services and guidance allocation on and to us of and environments. duration reflects and the will will continue that, can We by categories. respond. away navigate dynamic ability believe spend

to and freshness financial is This the to health. operational looking supported flexibility by have customers and for. demand We are respond changing the

Before discussing our outlook, I have two housekeeping items.

First, guidance is XXXX otherwise fiscal This our noted. in a unless XX-week year. is reflected

net SG&A, item. line credit Second, reported has transparency. quarter been XXXX, as and part card an item has revenues reported card net in to our are credit within net other Media of monetization revenue beginning income revenue planning offset revenue line our in revenue provide own Networks as of while we been statement Historically, its combine the first to revenue as increased monetization Macy’s

as revenues of include conjunction begin net and sales sales. presenting this other will SG&A Total and than percent total we rather change, adjusted revenues In revenue. will net EBITDA a with

to back of available this prior on information XXXX and are website. change, our years guidance Additional our presentation details our the of full presentation at reconciliation earnings on a

of XXXX year-over-year to a for that sales For challenged the XXXX. are view expectations relative our our more in sales full on Comparable single-digit Macy’s, will as be the $XX.X about to billion, roughly reflecting down that. year, be to billion Inc. of $XX.X revenue follows: a Net as credit card XX% to for consumer low digital representing XX%; of basis net approximately other to be year-over-year; with to X.X% a sales licensed accounting plus X% sales owned revenues net X% approximately XX-week be to of decline, XX% percent

gross revenue card XX.X%. assumes credit debt credit card XXXX, a trends, bad increased Our to reflecting outlook recent margin rate portfolio XX.X% to of compared

signs Our result should management promotions approach year-over-year. in and disciplined to markdowns lower inventory and pricing

to machine increases benefits automate ticket refine and to continue pricing expand the XXXX inventory will pricing learning of strategic these vendor anticipate that lapping repeating. direct We inventory. not capabilities owned do promotions we to offsetting in location-level from Partially is

SG&A these growth. on revenue to in our increased with about has percent first, reflecting colleagues productivity see total On since long-term of XXXX. be experience. Store expected in focus XX%, a we three infrastructure is ongoing consistent profitable payroll, investments as over our XX% and ways: customer investments

model selling productivity a in-store innovative shopping Our improved and providing while convenience journey. has experiential

volatile recruit achieved and talent. best Second, rate adjusted we we recent EBITDA a must retain The pay with to is on performance, despite the where competitively colleagues our environment. display a full XX.X% strength of macro margin annual

the to third, continuing skill require and have needed. we capabilities we sets historically new are different And than build have

added of control We our we’ve strength to capabilities resulting have to over operational added growth critical growth, XXX dedicated are support colleagues. the success initiatives. and thoughtfully The our helped new and in have teams support

approximately single-digit despite achieving well roughly X% inflation index. against account for increase the of low XX% which expenses, we consumer non-payroll For in our managed in SG&A, price growth XXXX,

We disciplined beyond. will with to continue and XXXX be management expense in our

After and $X.XX. million a interest to revenue are headwinds a of reflecting roughly XX% XX.X% $X.XX $XX adjusted million, annual share percent XX.X% interest we We of EBITDA $XX to taxes, interest as or earnings of as XX.X% expect percent net per sale rising rates. asset gains expense to sales total estimating of $XXX from of and Adjusted anticipated to million. of

share any not does EPS adjusted Our impact assume repurchases. potential for guidance

the we first we expect softer the in of second half be half half. about XXXX, As first versus sales year-over-year to think performance

as of to consumer from was the making first increase, stimulus As well This of evident occasions return we first strongest a the and half quarter growth travel, sales the reminder, XXXX, the as in XXXX sales quarter still a of year-over-year particularly our the XX.X% when year. posted events. benefiting net was in it

In rate quarter, year. increasing These half, we margin. services categories, declines, impacted to Father’s the we a and accelerated weakening spend around the which in built Day, pressures led the inflationary pandemic-related are and industry-wide pressures sales and the which In promotions heightened second see to anniversarying gross fall through excess essential began slowdown second composition starting to an savings a consumer of shift markdowns beginning goods in and and in misalignments, subsequently inventories of XXXX. and

For sales expect $X to is $X.XX. the XXXX, first to we be billion quarter Adjusted $X.XX of net of billion. to $X.X expected EPS

our to the discussed, quarterly consumer into that savings more not January goods the do their holiday we and stronger peak net outlook In just experienced and services. spend the comparison in in sales assumes continue season further sales sales depletes and addition across their the I even becomes selective

XXXX, basis. our XX expected End be than is a no down also mid-single are for digits on the gain quarter inventories $X recognize. asset includes percentage and basis million of quarter more to we to last sale year down expect to of points rate margin outlook first be Gross expected to a

great progress business. transforming made have We our

navigating years We achieved uncertainty. and while of past financial the stability have operational global X

long-term for believe we than profitable to value shareholder leading ever, poised are growth, additional more we creation. Now

turn I’ll that, call back the over With Jeff. to

Adrian. Thanks,

team win. is capabilities, in and to by supported the infrastructure So discipline as engaged beyond, incentivized we place, highly to we look that and have a XXXX

while our to which approach forward prudent sharing us taking the in provides with allocation protect coming fuel a XXXX. progress our sales quarters. five provides prioritizing We growth trends growth to on health, capital to look our This flexibility also vectors. the beginning more changing We significant to to achieve to respond in are financial our

are questions. we operator, And now ready for

is Thank Instructions] The Roach Sachs. of ahead. you. from go [Operator Goldman coming Please first Brooke question

you What thank confidence for in bit beginning expecting Jeff, much choppy macro? and positive you’re more the what morning. our the comp you. that you Have for how are also XQ? question. XXXX. the there? for taking guidance in drivers And perhaps elaborate on can the you that particular, a you on Good sales that’s and XXXX a then inflection that you’re additional conservatism? some a seen And can context key so sales inflection growth gives to And against consumer you driving approaching recently Thank Adrian, in deceleration in provide

the question about good supported growth to vectors Brook, So call. spoke on and your by I’ll is our – outlook that growth really the morning, take so part first five we to the

We’re ready that will factor definitely but an update not future. each size individually, to growth the it give in on everybody

early the we years, a for that. but growth them been in we’ve factors, building innings a of of We’re these and couple of have lot confidence in

let just me them. kind tick through So of

first think is the I one the brands reimagination. private

we brands. new of that in. powerful aggressive touching our think of – private very now, content example The wanted is we that is started have private about that. brands at are through INC schedule and burns, quarter. all half through this business brands Right brought to adding brands good XX% most We we back So our brand, it’s and the saw Missy XXXX. in fourth quarter, you brands the is we existing can X replacement – a the with and existing launch in brands new INC about going a – XX% in when refreshed of and start you of ‘XX, we grow. is up we the looked And about to years lots But of know ago biggest new picked that fourth talent

does focused or our we’re overall storage is And the one of full off-mall a potential what our unlocking omni-channel to really The just business. off-mall expansion. off-price really second that on base fleet, knowing

we look you opened, ones it have So fourth raft the up the a had it’s helping of It’s quarter the business open picked And side, those we’ve the been is customers. the side, you Macy’s a on ZIP on Macy’s new I the X% that quarter, the at the in more fourth Bloomingdale’s think side, and codes. in that headline those digital at attracting and side that look the here XX%. year eight business, have up Bloomingdale picked than on when two

so We to September we we’re look by the ended of schedule marketplace, looking And new that We year ones this for XX new the launching is there. in year, so digital If a one going and are launched scalable of hoping end brands at we for be also model. XXX are we categories, XXXX. ‘XX. with – in the the aggressive

We to launching the looking talked brands ‘XX and X,XXX marketplace this in luxury half back importantly, the add of We’re more Bloomingdale’s year. we’re in about brands.

as and Beauty, of well a Bluemercury great color. of record fragrance so a had lot But brands and in mentioned, we as in skincare And the luxury number we where with with added XXXX more and a Macy’s coming. and and have Macy’s lot a Bluemercury strength We’ve Bloomingdale’s Beauty as year Bloomingdale offerings.

So targeted benefits bolster very we’re the customers the the value communications, giving last relevancy and and you offers remodels customers. I reducing value really is to communication – really to when online specific to personalized in which and many both experiences has about certain goes that in-store investing that. so mean of talk

lots of tests. And so we are running

the on results, and that we something We’re but meaningful on of we’ve got week of XXXX. particular see of going we’re by always expecting are until this customers. each one very encouraged millions not to the benefit reaching early tens We – end

XXXX So, to all these which growth, really intended are we’re beyond. targeting to long-term and sales profitable achieve initiatives in drive

of we question. you of I’ll Adrian your turn our we calls, earnings to second part So into updates it for the all but more will give get over as I’ll –

question your Good and morning, Brook you excuse thank me. – for

of down The decisions, XXXX, XX% first step strength. XXXX about to into and do from in down also our an last display XXXX, to our would execution year, that enter been thing standpoint pressure. think with operational data-driven we in a you heightened on the But inventories say is recognize really health, position disciplined our X% I we we that remains has financial which XXXX under confidence. When consumer

how XXXX. of about the that think more me provide trajectory kind on context thought through guide the bit we improved of for a XXXX, So as we see let which walk sales will just path for about we it, kind

first the XXXX, if you first So year-over-year quarter on strongest was quarter, in quarterly compare. our the reflect

first to was We’re point really resurgence up were there. occasion, but a in this that inventory a return There tight bit at XX.X% effectively little beginning travel, that loosen time. was and last to we still year was government terms in there in was when time constraints of out quarter. clear a in still And work, we’re point stimulus the

healthy, As services. inflationary we relatively pressures to the got as goods begin consumer still to and into the was consumers to reallocate quarter, from began intensify second

the retail the begin supply inventory promotional we landscape to chains up So to flow as the of that kind pivot loosened context, into and pick intensify. began in really saw

quarters. very as quarters, Now fourth and think you’re third the think created about third the that as of the lot of really inventory a pressures, macro fourth we aware the and the challenges surpluses about inflation continued excess we

targeting about a recovery our So what think last confidence And by expect as XXXX we’ve the growth we that XXXX. growth we growth that achieve first remains an year, have that can the quarter as discussed, where as growth to in basis. vectors is will the an have in situation But think from as that XXXX that expect And year. assume under from remain second we saying more the sales we about that over compare last the you trajectory we well to intensifying we annual a this pressure. in quarter we’re course consumer of period have given the of to we

bit So sense of that of the gives you a little composition. a

is would thing about I XXXX. think quarter only was positioning a in the we what the of in strength do we’re we’re lot us and as learned fourth actually for about excited real That to ourselves XXXX. Now gifting quarter, we the a about fourth add

in fourth gives addition confidence will certainly we the to which that week, benefit the in from XXrd quarter. us So

you. coming Thank The of from Please next question is TD ahead. go Oliver Chen Cowen.

thank Hi, very you much.

helpful brand fairly getting lot. you of renovation the as you And intersect store? younger think traffic into for expect Thanks cautious the the lastly, lot of your continue a what’s embedding what a the product you top for gave What’s and of brands, to You control as and are we traffic? about younger mind the captivating private in Do as be assortment customer demand? switch And model consumer. the to the on you forward, volatile? customer a comments consumer and

trends about and now. think seeing product So about what let’s on Oliver similar we’re your When questions right it. talk to we you see three assortment,

you categories strong. have So occasion-based still are basically that

have And up, what’s get luggage you going we that that, the back do categories like to at start half into to those have When those still at in on expect the but half. back to year, you as so the us, abate into look now start quite businesses of for when look get pandemic you actually right at you pace when do strong. the continue. We been pick will we models, as them categories, the up challenged look to the

our where thing we’ve I big goes you the is control this. when what at that pivot ready inventory be the to look able we’re on with and to done disciplines think customer

are for well look at on at taper early built really those respond the able is, us watching is cases, look to that going. trend do what’s will that open is are be call that to this buy We’re starting The gives curves, flexibility to doing what we or going which really powder Bloomingdale’s, liquidity dry our us carefully, very where to into and customer in in warning our we well many to the off. about things we

that we how done have receipts. we allocating So control we’re inventories, We our and well. disciplined very about are

been With respect good. relatively to has traffic, traffic

is at traffic all to consumer we’re online is And under pressure. in-store maximizing We But that still both we The looking healthy. continue. expect that to consumer ensure are conversions the across that and we’re that getting.

the expect all quoted self-purchase we through way the going we that beginning saw, And January – in that particularly to what and we with continue of XXXX. that’s so

then now question guidance customer, that to that. there our So clearly, the younger are anticipates right the And very categories about younger customer. with much your winning we’re

to at where then have market categories we when there apparel. We strength expect there. look is we And continue, share those

to Gen kind the includes life about of the really stages, which private comment customer. going to is all respond the brand So reimagination Z and alpha the

how forward well opportunities And offerings, future this of looking so marketplace. and as in sharing with can them as take those customer to we care particularly other younger the

is in much younger brands that new very consumer adding, at we’re is our adding the have new when them way. look that that format we’re for in that you the categories are the our this the what and marketplace we’re mind opportunity doing at and address well, the that categories So look to we opportunity And seeing future. own to bring into them

based right evaluating on marketplace. from early getting on we’re learnings that successes We’re now

in younger is sights. So consumer clearly the our

is Grom from go ahead. Please Gordon question Chuck of next The you. Thank coming Haskett.

And I Hey, seeing good income of guide, some confidence. the morning. margin morning end. demonstrates of real Great lot a the spend here this you’re end which think execution, guys. different across Curious gross cohorts, is at what surprise high low then, Adrian, on the your a and obviously

you in things in wondering that you can on just So that you confidence localization if control into and that can dive terms can other level you a year? XX.X% of factors to that give particularly that, pricing hit this XX.X%

Chuck, Jeff. it’s Hey,

margins. talk it start I’ll with question about to income your Adrian gross throw So and about I’ll to then tiers,

going I’d to ‘XX. say be income is what So tiers that in all are pressured

Macy’s. tiers the As similar income of second seen actually very quarter, we’ve trends we’ve since seen across

good we is and lean the So price news really, categories quarters, points have two inventory that that broad the a guess I on this to the open a the into, discipline, buy. last of we range get for

an of in net our massively allowances. is reduced suppliers went I model what cost the think big reliance really the we XXXX to on thing beginning most the markdown did and we to with when upfront kind remember of of

The sales. the enterprise markdowns enterprise opportunity. our other That our versus particularly really did of conservative open-to-buy layer an receipt for be time made at going where of ‘XX we was opportunity view to based a same their these the incentives it a that that the you’re merchants sales functional on to thing in and see we reserves top more on to more cautious going. what gave consumer is view in and us And then the

is respond – been to that we’ve to that. able So

it you comment from you when we’re pressured. about think I look seeing like nameplates is brands, our luxury, is when luxury. I look what at would our consumer that and at the to to off-price

at program the was that So at is quarter. top spend the look X% luxury profitable and just And which you the to up business, continues which loyalist that strength. that, of of very big is chunk a was overall the the Bloomingdale’s, When top of in have up the business list, fourth X%.

spending of share about They you and really in specialness. – that and to So list have capture we scarcity where luxury are we top when expect wallet, that they more they the where of think opportunity particularly are are consumer.

in as and Macy’s, buy where what the of Bluemercury, in customers is So we’re while beauty a Bloomingdale’s at at these purchases. their us doing our we’re area we’re can doing are so because they helping they place doing see categories discerning what really

model we all to we income a see see where where respond is strengths, So to to we’ve ready got that types.

Chuck, good to you. morning

well I it from very as that our margin inventory gross expansion that’s the of So us one relates XXXX, things think you’ve to been for as consistent productivity. as to heard commitment outlook margin our our is commitment to

have we’re focused the partially of But let complexion XXXX, little more to you just things price kind effective at increases. lower me three we’re that you so overall, promotions look lower by offset as to of a looking And a bit give markdowns, ticket on. of

The inventories. first is healthy

So inventory down our which inventory healthy. are was think when XXXX actually of X% as being as to composition year our well levels inventory about you XXXX, a scarcity, quite

the front So the right the signals reserve get the and freshness to open sales we buy respond to to that’s season. to flexibility maintain have we able through be to customer, able the of demand composition that to strength be our throughout about and we’re something to of and in that the pretty in put sell items excited

sell-throughs. The can so have we second events on offers our reducing priced promotional and communications up focused compelling thing that broad-based more while is regular promotions really and our personalized more levering

tested our communications customers, already year. personalized thus millions with have offered of We this far

that, be New the we That Year. the into seeing. chasing also We we are us principle combination in will with with fourth unprofitable get as a sales. results really pleased committed not quarter, that we And are to and the served well that in continue are to

of categories. mix The really the third is

think we the of customer she how of or terms in her about and operationally disciplined very pivot spending. the where is been have We

going feel that able going full-price is so allow going that. to our newness to continue to that margin. which to And more help do freshness, we to be fashion have we and sell-through, to us is are But gross

when tailored that’s retailers. scale men’s dresses, offered and opportunities you at not So, think and like about value

are that We around of year. the positioned really very throughout mix margin just kind enhance gross for to sell-through well our the full-price

excited So, those about. things are are that we the

feel to margin fundamentally, good XXXX. things there. around have look very continuing costs traction just the progress and gross levers to are that we momentum the freight about We all material have and on But and bring into have already like disciplined We made opportunities been at and the raw we there. that

Matthew The you. next Thank question of is coming Boss go from Please JPMorgan. ahead.

Great. Thanks.

the margin multiyear? gross up? And you is of Adrian, then at the store appear this low-single maybe about closures think to And And given see the back moving you that line share the So, sustainable market top when sales terms base picking can lateral high-XXs year white be beyond growth? opportunity do it digit forward, Jeff, two-part see you for where opportunity? question. expansion expense profile space in do model you leverage

Matt. Hey

the is in Macy’s. how many space or customers question white I signaling So, interest categories related think to

were I think learning electronics quarter. games, are that the on during And marketplace that when categories popular about the marketplace. categories from you a think you lot we fourth most video about think

have the lot that a learning have or brands we some added. that businesses and added are we categories about apparel We of

lease we is been of entire had at has When there you and big look to a jewelry Pandora that what our what So, that that. is have floor of energized some increases we great from level big example opportunity our immediately with previously. opportunities do, at productivity able

going expanding that. We be to are

in the we our that narrow play of and expand assortment So, all in what’s we on important to areas things are opportunity looking not. – are are where categories at most the our we we and

it type. at customer looking by are We

on it of are an look earlier market. Oliver’s best get be that, and in. what’s us may for about but profitably to the So, when that Alpha, what question sense. to may on to bring not traffic categories – way owned we From the Gen deal makes you not it marketplace, Z that ROI And those want to model, they great at a

at expect the So, to portfolio. look us full

look have you and you same about do We $XX going out about Macy’s price, that. big more in tent, categories Bloomingdale’s when the think below a going our out off-price the at than opening $XX, is if range think you across is we business double

looking or that at would to are that. able respond – convenient. customers customers, owned depending would brands, also looking and because When don’t those it in to to the really are have and consider brick-and-mortar, space us marketplace new context we to of VDF, market white they are income be full be the to we where to tiers So, at able and particularly are, where do share for tools our gains on we be on those customers hybrid arsenal them data between go that. we look and now at but find our don’t And

are we off-mall of we what So, though we Macy’s XX at excited the terms to how we ZIP going needs. XX be their there they customers That’s penetrate so that’s places, are in markets are satisfying markets, are codes is in Bloomies. there may about of looking and are many don’t and where top why by even because Market

that, and that. starts the humming. do expect So, fortify flywheel we to us When continue digital to omnichannel business, the

white space new going are to are we opportunities. where customer and how that’s we So, looking at go with

Matt, good you. morning to

on marketplace, as in focused that you high-XXs scale margin media an to profit So, will we to profile. of SG&A. we additional continue about gross were our Macy’s gross network, on continue The rate. question also very terms mind to our pools remain very to keep important your thing those is strengthen simply certainly raised But scale in margin question answer margin,

think I to of So, on it’s mention us bit let a time spend me for little that understand. to because important

very The committed actually cost reset base, and that. Polaris our first is, to thing were we did we in through XXXX,

And that on the sales thing was is But over workforce, to about without comparable have that you XX,XXX XX% XXXX couple the have in in important in the So, if to colleagues growth cannot you today, that’s that XXXX mind we of that’s about of our the at course the in to have committed last talent. we we relatively the less think less you in quality fuel keep XXXX look on colleagues versus XXXX and have display priorities years. execution of about we success the investing with this when had levels.

investments to display dimensionalize and on me speak non-payroll our really just year. on the let our that side. So, was last But successes payroll

what to terms is the is foremost in as is $XX nationwide done as have thing example, make are stores, we and productivity, around supply On talent, actually to And have that experience. for investments we relative the of the we continuing of payroll minimum have we customer XXXX. in-store chain and first the May, side, see thing pay, our above XX% but in important in

competitive is second piece really pay. The around

have we XXXX to and level beyond. the We to really retain at growth execute the need and attract top that about talent to, in to think

really And have last so that our The deliver really piece growth execution excited kind quite familiar it’s the traction and this of years the vectors, have is and about win. right a about team about talked we around with capabilities, are the you very to that getting. we over but we really to the bit the having need been

well. Network. capability made that another a Personalization Marketplace exist is us really dimension, as we our investments ago, years not there. new brands, several have had Macy’s as growth science ago. data pricing Private is seeing we see opportunity and we launched served officially about, are six and has didn’t we talked months You capability, have analytics a and now Media

from to non-payroll way do retain that for and we capabilities able individuals win talented We the managed individuals. industry been building a consider So, attract and new the requires we have those is expense the consumer indices that we data, bit of in When a during look digits at the price seem were X%, little low-single range index period. some about we but higher, the be us. is to have

and on we side. sales That been about and forward. discipline that’s EBITDA have very disciplined remain we digit a on that move committed being low-double net to So, as said, total we double-digit, revenue, profile

coming ahead. Morgan of Straton Stanley. Alex is question next The you. Please Thank from go

two Thanks question. for Great. pieces. my Really taking

adjusted this you First digit EBITDA I is outcome that of a was are hitting there. your margin And low-double already think that nice target. so term, kind longer

then just the maybe the luxury questions are right So, And up takes some I puts that still just the wanted target, there? long-term or following secondly, is on what piece and earlier, and zoom to competitors are I are incrementally the positive like you the the Bluemercury part of some of and out, luxury in bigger strategy. a on as space Bloomies And it struggling. sounds know

are you has maybe that you could differently if in then? So, about help compared did to, any us how thinking you. than understand Thank or market opportunity say, you broadly changed pre-COVID, it the

so luxury to to are talk double-digit with that thinking me profile throw let Alex, start about of future. and EBITDA we I about the and in Adrian then kind the Hey it will how

on this terms bullish in we is So, are luxury. opportunities. of luxury gain for after share us And a going the

customer a They healthy. You the have resources. have that remains

specialness. scarcity mentioned, I and spending As are they there really is where

that. the customer experience important. And colleague, is What so is is we what discerning that our developed. quite what it is, in is how is experience purchases, there online, think omnichannel full it very their a on the about like many cases, are quite customers do relationship stores, So, they in

particularly are definitely about Bluemercury. So, additional in when at you think we share look and to committed – market Bloomingdale’s you

have – Bloomingdale’s, established individual with And a strong adding and how Bloomingdale’s when be stores this at anniversary the are luxury a time on consideration and for curated you can can labels overall productive spent not only And real – retail that have comps. be option. XXXth So, in those of want is to love. customers really and exclusive of when relationships but manifests huge about we mutually at content website, a these multi-brand to just customer’s upscale expansion our aspirational, finished lot that new you brands. on so think on content look that We our content, really luxury approachable effects developing

that. So, we on are very focused

using data We analytics. and are

of are we content. offering leaning into that the have ensure right to breadth the We

in be are market we clearly walk offerings to so on stand the on you that areas contemporary of the that would Bloomingdale, you for. you we advanced as couple a we offerings well really website, going know continued what go yield a to believe to XXXX, so focused has gains. the when pointed and into to I as is it share luxury as that – As and

job look – think you Bluemercury, new a on year. great of the a about when And when team their that and doing outstanding horizon you had at though. management think an work I that lot on is

you there, think about When doing, you proprietary strength active got the a we so it’s And XXXX. big look what when they brands the they a in XX% customers are have chunk that at increase of in in business.

So, client services the on ranges. in experience, the a definitely price we reinvigorating beauty the refreshing us as spy of to and are of authority focused assortment really that element because those cement

terms well having our similar We and when the And been to in are platform, their a in a as Macy’s, of expanding year you the adding when area. with program. carousel cachet mentioned, of in for about are strong Bloomingdale’s is And a high-potential as think discovery is doing what rotation it’s I we footprint are while neighborhoods. as we brands which markets beauty

renovating beauty well our actively are website. refreshing as departments we as our So,

stores and by great brands with we expanding X roughly a that year and offers renovating our sizing that we are down it adding. We really then doing are to stores are XX existing

are. what them about mentioned those I in So, the call

to that married destination, done brand a in but coming, luxury the – to what is you very true Bluemercury. retailer is is for in with just those do luxury brand we York, can couple collaboration us with important a going like Show with New we of Bloomingdale’s Love with of assets of fragrance which a be a made really think massive a come this are that and weeks, the Flower Macy’s, I showing a and that are as have

continue that you I the to just think we of give what expand at are So, looking spirit scale. – will to

Alex. on sustained I morning Good your very question. be will

growth we scale at different are the we excited low-single clear maturity. are And and on have there long-term is of as sustainable built But shared, look, thing levels growth. we are and XXXX. digit first XXXX foremost, as plus as that that important vectors revenue. owned a around So, really well on in about foundation that’s actually focused certainly Jeff number and most And sales of total licensed

EBITDA we low-double complete and will pilot Starting to the testing in continue committed From beyond. begin to percent the will first in we of going on digit a forward. XXXX, a our terms in We of a XXXX lot revenue in quarter, growth total of to and we standpoint, that. excited but are about that profile view revenue report but we basis, are

will the us We vectors are get margin to expansion committed the vectors growth and that there.

coming The you. Group. Telsey Dana from Advisory Thank next Telsey Please ahead. is go of question

everyone. Good Hi. morning

going just shrink? margin, forward Thank you How As are more believe XXX points, very down And and especially which there was journey? how through capture? are the basis and far on the how And cadence be around which to science on are then lastly, science I how to in as impact are that merchandise effective, you we what about think seeing data you that about the journey, you move you. year? Is thinking that the planning? seems you is data along

Terrific.

we to coming good margin, year. So, with the merchandise feel into regards

and So, composition much where level where inventory we helps to we our full-price us of as flexibility just our having our and not merchandise is is on quite bit the well. sell-through the position, can inventory, a fresh get margin dependent inventory but tend of multi-category win

we respond has you be year, into and well. pivoted over and us customer we back, can that served well. will to away casual able comes base the occasion imagine, As But when the last from

to us quite demand buy really well. going serve around the in to think local the respond to I markets disciplines is to open signals

about good very feel we that. So,

innings reality mid late We are journey in given done. funds. The would seems on is, say, data learning, what the I are is not the, to we like it

more We margin more profile data and our find through opportunities to continue science. to expand

lean but level to insights that more So, see are the we at XXXX, make it’s in more will a the sure margin really to even through learnings finding much into opportunity. fascinating granular saw beta to opportunity we we the take coming definitely are that the

So, will there to us, that is about progress. as we and very continued more upside for be clear we

Jeff have shrink As will think that speak briefly. I levels, to our we about

shortage industry-wide definitely had shift the hearing channel so an other We shift factors, from worse than to are Dana, since posts, uptick was Hi going anticipated. trend. last an as that stores. back think you And digital I it’s from is Two year. you one – the have

And country do future. and with So the how officials working are stores that have warehouses you we forgers have can more our in you orders, pockets porous digital we do so your the protect your than heightened better particular aggressively that and teams on in local assets fulfilling are of of most obviously, in was fact in anticipated. you your then our

question ahead. is Please from Thank you. go Citigroup. next Lejuez Paul of The coming

Hey. but Thanks. earlier, am you Tracy guys enough place Thanks. enough the if in you it’s you it if bit way to actually you quarter? separately, then wondering quick your just talked how shrink. incentivize to And time in a XQ the I I am Kogan And time, margins put a in you if was I if just behaviors. much for see It’s sure about little I changing had or changing just had have pressured this that not buyers. ask follow-up filling on wanted wondering Paul. on last question

Let’s about talk shrink first.

ICR, we into built at that about when our reported we as we is there So, talked reserve. it

RFID trends the virtually we that have recognizing we do. on so And everything

So, our we counts are daily doing on content.

of So, we really on our buildings. course know what’s in going the

so we we And that reserve of into January. and built end we the our that went our that in posts our build revised when guidance or shortage into our whereas higher, expectations

the conversation beginning relates been XXXX. our place it incentives, about really of to your that’s since As in

bonuses, cash when our cost also on reviews. incent annual the then in basically get to we how went their net model, not what but looked So, we we our at they based only colleagues

was action. place over is a now that not So, years. for recent and been not a It’s in X temporary

– I changed behavior, kind it that continuing, it the has And buying has if assume you having it’s of want. effect it’s

adjustments it, constantly our are we starts the are about the on plans season second When plan a customers. is – because of you new on think all-in, making we on Yes. based

be able time particular and what do receipts customers that a to planning somebody stronger you into are how do might where in have that with you react back is to markdowns, level, with and it’s pull that. at than what you a and real to So, business interest much signaling with you

are fuel markdowns business. and You want the to them to sure to you that be make according giving able receipts

somebody do original from plan, that to down able be an And is slowing that. want you to

If incent sure you going have got to And is relationships want that that’s you going. really particular where the they got bad and incented plan, have are incenting are behavior those original customer that you is the that what behavior. those make to is on owning do buyers

So, approaching changed I way think respond real it have the customer-centric that and more in being much using to we absolutely assets are our that to has the time. teams that

ahead. Thank go next Bob is Please you. from question of coming Partners. Drbul The Guggenheim

Hi. Good morning.

your happening and pricing good questions if any some vendors with number initiatives wondering you the of AURs have higher be that you do just AURs, need couple to can a down, maybe would comment at or higher. what’s and to do prices when you Just I of that, see helpful. on worked feel take the taken And prices will have reason that around Thanks. look about some believe just come consumer, – wondering, a that am of I to you place. these of just am

Hey Bob.

So, have let pricing then talk what a about me are little kind we that. support bit to doing of with AUR reinforce and Adrian

what ticket I that we about expecting And is largely of we an XXXX, at you think X% increases. increase in when are overall was AUR. looked had

level is the to to not increase it going are you going near in was ‘XX. XXXX what there that an prices, ticket be see in think I but is in

us AUR. when of and moving so terms look just having your of is for you change in the overall lower markdowns degradation that clearance less big through And AUR at is the in

are promotions versus with a be. in that getting at targeted it’s have tied demand better as as customers, And we but real used time inventory allocation. right-sized to to to broad-based to We perfect, is are sales really never going they

better with and to much trends Adrian that. the science, you at are some potential we it of getting pricing which give terms will are better going is over understanding to getting I feedback where on turn We customer really in

additional The this location-level we by store, look our initially pricing would like into ago to We on to of things and to margin. be the by where channel, couple good years is are inventory a pricing benefits. level, Bob. composition that sell-through. into now at mine about is optimal is price to spills thesis a point allocation then is just and we are by The full spills market, continue reality able giving. gift by science pivoted Jeff health to that I highly that allocation, into of morning for so discipline appropriate the really we that. Absolutely location level reinforce it price that the And that scaled the the style, described, linked we discipline it’s understand maximize it what keeps is at to was the which really is able fairly to talked

platform. think We dynamic us next on we are need to which thinking really allows communication, what’s and And a tremendous time, have I quite added after of to moment to the how customer-centric broad-based but notion opportunity. personalized allows begin really a also, is in us lever industry a the the happening bit go that offers this understand which we through in and respond dimension reduced a promotional of that’s pricing, depending to

what we about excited tests. have very are seen in our We

is And continue with come I get more more say continue margin sophisticated. capabilities to overall, more even to come, that to expand pricing continue would So science health. the grow, there but to will and to

Jefferies. Thank question you. ahead. Ashley next Helgans is from The of coming go Please

Thanks Most guys. the been of for answered. questions question. our Hi taking have

about wanted to one on ask digital mid-XXs obviously a stores strong A year those versus year low you had this XXXX. achieving by stores, digital Just to year. ago, penetration talked really

– and target, know both be providing could this Macy’s like you it it Bloomies. are if you to year. XX% I will provide wondering was XX% you scaling update marketplace for on looks or have Just that any around

margin how to how maybe impact focused Thank Adrian, then target are that just digital you. digital goals? And still does you So, scaling long-term your on level? that

a look in business definitely it up we talk ‘XX. digital XXXX, where obviously our traffic up drop versus Let’s in at from and you was up over X% with when grew about, conversion significantly so but XXXX, XXXX. off XX% were And XX%,

was XXXX, of the through at going level. the range. went now In penetration abated in at see to through And In do it XX% hit ‘XX. comment, right XX% So, the to it it was kind digital years. it XX% It XX% to stabilizing into XXXX, XX% we it your went – the pandemic, XX%. and

the now occurred mentioned digital for and reset a in us experience, in what with do marketplace. that But ones not with ‘XX. future. of has we functionality penetration but digital the big is that also believe new for getting really you we will pandemic, And only So, post baseline have grow do and better we can one

a quite about So, for that. but lot are the we excited learnings in on that, for work us we us early ahead have of

our website. a done We have on lot

our the mobile no we presence flywheel how of part all marketplace, mentioned because app. our stone our We needs. that is addresses I lot opportunities and have in leaving done terms omnichannel in basically the but of a unturned digital there are of customer

a a digitally really you example, it’s for expense that’s in integrate lot have you about Jeff but around. stores channel, mind the percent The though an as omnichannel the we think total something be – do digital even And matter, leverage. very the of in going a get line, lot a digit that on of SG&A there to gross way EBITDA As are about our we the When growth forward. expense we that digital you seamless we margin revenue described, connected dimension, how important that’s matter, ecosystem. may think of keep of conviction parcel the When low-double us, customer on as about for that the do the destination looking a think it’s is really for. profile, what focused margin

impact are bottom profile margin items, different penetration for very we the penetration, line as that So, obviously think about composition our of us. the store we is line ultimately, what digital of that, focused on the versus delivers the but

benefit other The digital have expansion about as is the we think capabilities added. we of that

to the platform, the versus platform marketplace and products the So, selling of flexibility additional profit own profile. the about health you direct when you our for platform opportunity vendor about us that’s optimize an think think margin on versus

So, we called profit. dead net tend at to look a metric

we profitable opportunity for more be So, may items imagine, marketplace are can as you an that’s think marketplace as there and margin owned additional profitability, that expansion. about on so our

But goals after. So, standpoint, expansion of those with things of we going that vectors are many kinds we protect our are from digital operational levels penetration. a many, margin to the various digital have

over Thank to Mr. At would like you. this floor time, turn I for comments. to the back closing Gennette

Inc. So, call. quarter and in forward interest thank our a Macy’s, we growth vectors day. Everybody, you have five look brands, earnings everybody for to updating on on first your you our great

today’s gentlemen, This Ladies your you event. thank and participation. for concludes

at or enjoy log the may the and webcast your this of rest disconnect day. You time your off lines