Macy's (M) 22 Aug 232023 Q2 Earnings call transcript

Greetings and welcome to the Macy's, Inc.

Second Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this call is being recorded.

the Relations. to turn President Quintiliano, now Investor of will call Pamela over Vice I may begin. you Pamela, now

our Thank Investors you, are press quarter operator. Macy's, COO joining been Chairman us. and Good has CEO; release, Inc. morning, section everyone, me and on website with Adrian posted the a and and on CFO. CEO-Elect; at presentation call Mitchell, Spring, Along macysinc.com. XXXX today Tony Jeff of and our With Gennette, the President, thanks our for second our

the otherwise to otherwise XXXX. provided references information or Unless All noted. Safe benchmark appropriate, today Comparisons outlook to comparisons are to unless of provisions Harbor All noted, discussed to on Securities forward-looking statements are our XXXX. XXXX the to performance. the where expectations, of Private refer versus our June prior are subject Act Litigation Xst provided, guidance call best Reform earnings

statements to in discussion Commission. could factors risks with are A detailed uncertainties and of These from to Securities and assumptions the today. filings that and contained is materially expectations differ and uncertainties subject mentioned forward-looking results our these actual Exchange cause the

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

conclusion as on will be these available regarding financial You additional this our replay A call on of can the website. call. website. find information is approximately the of Today's hours measures, others as our non-GAAP section well used Investors being after webcast two

that, I'm hand With to to over going it Jeff.

the by approach remainder for of on macro second that the begin to call review today's thank discussion our and our and year. to of informing how you followed with results, everyone, joining the us. environment morning, going I'm is Good quarter a a

full provide as under an also update and detail vectors our our additional outlooks. there, expanded Tony on will Adrian and role He COO. the his will third discuss growth second quarter the opportunities merchandising year and will strategy. From quarter then five give on

the results, into the dig wildfires we on to acknowledge devastating I Before want Maui.

few have and by colleagues accounted for our have destruction impacted We the directly all caused been island, a wildfires. by but the on the loss

via commitment our Fund and American financial support roundup Star We're are and campaigns supporting annual Red North engaged and the customer Maui through Cross Guam our stores across those colleagues with Hawaii residents. to Relief our

Turning a to better-than-expected billion, These of XX.X%. EPS achieved and an rate factors gross timing rate XX.X%, results. primarily the card sales, benefited offset quarter second of credit and margin in from of We net gross and shift SG&A. lower-than-anticipated $X.XX recognition sales more of revenues a of Adjusted SG&A margin diluted $X.XX than shortage.

step a with lower-than-anticipated to the inventories down quarter. down exited XX% seasonal XX% a and entering the position. in spring back, the to ended XXXX. demand to On call, second last quarter Taking we in due we to receipts back first half trends quarter inventory fall Ultimately, at clean earnings Macy's year we committed of the our excess with

of and our better deep. sell-throughs nimble, and seasonal and by with our weeks. teams and of our data-driven length to reduce markdowns, clearance not cross-functional Thanks inventory were approach than for to and tools utilizing We clearance ways depth cadence Promotional were the flexible flex disciplined as being working. expected promotions markdowns were the commitments to of embracing activity new several

were last lower. warm sales At inventories experience. shopping about declined weather year's to chase easier of open to and ability and roughly X.X% buy declined XX% and appropriate on and store and which quarter, improves floors to Entering Macy's, online comparable X.X% areas less inventories of seasonally navigate. the fresh Content sales third with is were are strength, the Aged cluttered and an into all below owned-plus-licensed net omnichannel basis. the XX% levels

sportswear, career include clothing. men's categories performing tailored women's and prestige cosmetics, fragrances Top beauty, particularly and

We to improvements soft including and home categories, also housewares. in continued realize the textiles

challenged. sleepwear casual remain Active, and

trends We in than working should XX benefit October term, the and the doors In XXX to Nike in spring. categories. from active and on the rollout and near improve in men's, doors these solutions more online women's to this kids' are reintroduction of

This are to Under our Armour and be ability XXX that attract return strength also Macy's sought-after will and reach in Armour the wholesale partners. and available men's morning, product we announce of in pleased Nike to stores The beginning online, of and Under select to February. speaks

working we're on as potential ahead, partners with as expand new well Looking both further. how to brands

by Bloomingdale's, in store-within-stores Comparable sales stores XXX on Macy's sales for sales down At they were basis X.X% outperformed operate roughly points. basis. full-line comparable X.X% declined Macy's an which net owned in our Backstage, owned-plus-licensed off-price concept, and

shoes our women's upscale dresses were being men's and performing and and contemporary winning on designer handbags, while option focus categories, were remains multi-branded best retail. challenged. apparel, the Bloomingdale's for Beauty,

about out. by leading Bloomingdale's Bloomingdale's we During will our this that full-line sales has outlet X.X% be respond points. shoe outperformed comparable sales consumer, a increased well relevant basis and the quarter, locations color skincare our active brand XXst cosmetic Hoka, we it and introduced will outlet, be which and in Bluemercury, XXX Later month, Customers Delaware. X.X%. Christiana, our net is rose to selling been to At brands. opening to located highly continue

in were it potential shifts largely and While difficult they markdown-driven, exceeded promotional makes our health. expectations, to consumer results decipher second any which quarter

we and of the Macy's, the of of household remainder an at have the roughly income where especially think average year on we cautious about XXXX, we our customers under. identified impacting XX% the $XX,XXX or As customer, plan pressures remain

in back as customer ongoing shift more intentional are and not more becoming several income, disposable Over an converting with and pull services on the on of They their experiences. the the allocation last quarters, easily seen we categories. have to spend our discretionary Macy's aggressively

cannot will what and we We on predict pressures controlling control. when ease are can macro focused

in shifting time. balance However, we fundamentals reacting disciplined preferences real Today, sheet, inventories, and strong fortification to consumer of well. position approach continued reading and believe our us we're to

chased strength. pulled of We what's working, and have remixed level and areas brand receipts, category not into back on

to planned, to ability we look right the value. of year, pivot promotional right and offerings the to in the the thoughtful our the we strategic remainder and and time are confident inventory we right at calendar and As have

We to to streamline and will refine both impact, and leverage term. data find basis opportunities further breadth weekly longer efficiently decision-making tools inventory and a composition, to on depth to positive and continue science our had a execute that compelling near

including At Macy's, a basics, also and for and brands, including back better Kids, mix compelling uniforms. offering Levi's selection Lauren, of of national to are school, have a we relevant Ralph Jordan everyday

destination. as For holiday, further gift-giving a we amplifying strength our are

elevated products. We our quality of have the

during from brands. piece private of are quarter gifting built a beauty for rest the In sales We XX% versus to over have significant top our more strong value and brand year. our of categories fourth of market accounting the mid-XXs Macy's across strategy,

longer-term anticipate the for online. We a start life and categories, holiday experiences. elevated of Disney in-store R This products we retail through partnership strong have and and will toys engaging differentiated be a collaboration will to Toys Us brought is anniversary with a offering XXXth strategic across Disney that

the luxury At have we this of touch, These client Bloomingdale's, bath And events, best is holiday, experiences, patterns holiday with to curated and focused brand, our strengthen partnering activations create pop-ups, will are Bluemercury, our and unique many stores body our customers. to and an our around and fragrance shopping products. interests brands offering which season, been designed high have introduce proprietary we we in at launch expanded on our animation relationships. and and newest inspiration for of

for detail guidance. the in discuss for we but outlook, to shortly, excited our EPS guidance important note card the credit will asset are is prior all customer. Adrian adjusted We and reiterating in full our year back that to sales we year elevated are will revenue half headwinds full ways serve despite our diluted relative it

the want on Its milestones. to XX Commentary been go. At product I four turning teams or we Tony, to over positive reviews of On Macy's, approximately introduced several demographic brand, our our to target XX-year-old woman stars with, has XX% it XXth. receiving newest above. congratulate the very Before recently private on is

in discovering we And is we at Washington, headquarters energized world, cost the them existing major have the brings the brands New places Marketplace infrastructure step in from by benefit our trajectory, Bluemercury, of July. Macy's, of further this new growth Bloomingdale's, moved them allows and to offer. DC Customers important responding team The well centers City. soft-launched At categories the to in York of been to which and and efficiencies beauty from its one Inc.

modern underlying key success Looking experience five ahead, our growth as relevancy store. that and fundamentals, department vectors, we believe customer improving a components elevated and to are

going that, his to to our discuss merchandising. approach and vectors is Tony growth five With

working together that morning, believed fresh of leading. good life to and the I teams the perspectives, thoughtful I balance most Jeff, innovative our everyone. to Macy's, I their always and see you, newer for recognizing tenured coming and organization. colleagues by Inc. begin across and that want work are they dedication have and brings Thank

arrival Chief most look Growth Consumer We're as us announced Officer. Digital at of Max Commerce to Max and experience Practices. a have XX Max co-leading NextGen McKinsey, we years over week, of the contributions. senior our forward join Last recently partner, Customer their Magni, has and excited to and his

overarching customer we the operational the several vectors. keeping health the factors efficiencies last at advancement transformation improved of enabler the growth have has of been the years, everything of and with financial do. These are company. Over our key of our Adrian and a of the five the Jeff and center This intertwined strategy

growth vector Macy's is first Our reimagination. brand private

recently biggest As are to we by been On consumer brands. sales XXth, our has research. the we private XXth direct expectations, On believe Results has encouraging, mentioned, one with of potential Jeff launched become and which informed exceeding

has has updated development the Our strategy. private thoughtful built three work on been team planned The pillars. been of brand rollout key in both our and reimagination

execute second, with and intention stewardship; equation. provide First, design brand value and third, meaningful with a attention;

marketing our life capture prospective to and authentically considered create customers. together have that to teams resonate and the and with stages to hearts to of sourcing and merchandising, needs. current reflect have customers' brands the worked They products From wants

our the differentiated we products, which matrix should expect by of With further benefit brand and margin. reinvigoration loyalty proprietary customer complementing national gross drive to a sales ultimately with portfolio,

refreshing plan XXXX, existing introduce to portfolio four On Through we and replacing XXth. all or brands our new in including be ones, will

broader be of updated year, this popular second part brand refreshed as we'll for once its introducing segment. I.N.C. the quarter, outperformed again In our next of last September, private As I.N.C.'s momentum brand In we phase women's the refresh. strategy, sales apparel continued, successfully

store second Our small is growth format. vector

which and pleased two in had Chicagoland Indiana. Last two comparable Macy's in our stores area year Bloomies are owned-plus-licensed our we September, XX Macy's open And the with a more. opened over been have opened eight growth. outside and performance that just Macy's weekend, small-format of We sales locations, Bloomies. include ninth small-format positive we'll

also will we be and is Las a San in Northeast. November, brick-and-mortar is location adding Vegas for be which other with location first its to store the to portfolio, in a plans will smaller a the will be open located Bloomingdale's market Seattle, the One in small-format brand. new is our third The November. will in open Diego. which in in format In Boston,

integrate from marketplace, seamlessly of third have experience Our approximately we're now year-end, vector offer on and categories At growth launch. X,XXX by with the grew curated fiscal inventory XXX last we Marketplace quarter. that and We digital our the which risk. Macy's, from the customer up is merchandise approaching value over one-year XXX% first brands brands the offers gross platform, anniversary no and

significant we Marketplace, average higher Macy's At order. to units order per higher value, see and cross-shopping, continue

the with earlier, pleased mentioned recently Bloomingdale's results. Jeff Marketplace we As early are introduced and

luxury, which vector fourth luxury our At continue Bluemercury, our we our Macy's Bloomingdale's, relationship Our with shopping and is optimize Bloomingdale's, elevate customers beauty. spans to and growth experience.

loves our experience, and Bloomingdale's On we base the XX-month and Bloomingdale's loyalty the in spend. doors count both trailing larger brands products. top-of-the-list know customer We concentration have luxury of shopping the and remodeled customer this grew basis, with

handbags, higher Thus on beauty, there locations goods jewelry. far, five remodeled for more. we shoes, is Improvements have including have focused luxury penetration, opportunity areas and fine believe fragrances, with and

is rose to work trends offer of the stay and the a new nameplate, our consistently to primarily Bluemercury, evolve to At luxury is growth. Bluemercury's to XX%, the Active and on beauty by testament XX-month trailing realized ahead mix product smallest count basis strong skincare, the consecutive quarter team more sales XXth customers. exclusive driven we a the customer doing performance brand of customer. experience a comparable and

and offering newness, emphasis expanding we're market luxury freshness beauty, an Macy's brands, in with core At on our in-store service. our

omnichannel for fragrance As shopping remodels, prepare into will and introduce the beauty our six lean holiday, leading will across the bringing our we to we additional positioning XX total locations. experiences

interaction. and to vector lifetime value by loyalty across of growth amplifies fifth is and Our improving communications. relevance personalized offers It every our strategies increase customer business

and digital of are multi-channel implementing the tests. teams technology Our multi-step in and early stages

new to more us and conversations We will customers allow even recently the behaviorally-driven increase touchpoints, consistently to of speak personalized marketing. our amount across launched several tools that

sales look that five vectors beginning our you am update I growth forward progress. year our on confident continuing drive to incremental next growth should to and I

call Before turning over our few overarching Adrian, a I on to thoughts merchandise want the to strategy. provide

Over spending Macy's the discussing private the been time team last I've brands right the of and and curation. market of with several months, the balance importance

together we my are at We ideas combine Currently, and to their are major working targeting experiences two Bloomingdale's. opportunities.

going after second, categories have brands, the opportunity right share in and maximizing First, our market underpenetrated excite where and sales that categories, and signaled products customers customers; demand.

Armour two potential as wholesale top exploring further brands. establish we're a of current and are and additions Under how market we can upcoming examples. ourselves great for addition, In The compelling partner Nike

even the transforming, committed brands off-price conditions to and environment national on-mall in we and remain to customers' that's digitally, We up-and-coming macro satisfying private desire to are and to our shop, challenges, or unpredictable. off-model, established focused Despite a an from luxury, business on brands.

framework, sets to demand. and that ability address uncertain which success for the in execute, up multi-channel, changing multi-category environment. us our platform advantage an have in even team's multi-generational, I confidence strategy Within this is our to and

turn it With let me that, to over Adrian.

Thanks, closely. And in everyone. good supply start finance you want to hard ongoing estate and and for my chain, my work. grateful with partner real morning technology, more this I by Tony, to thanking am teams stores, I dedication their morning, and and to colleagues

efficient three opportunity we of that the fundamental more model. more a build call, areas our In faster, to and identified I operating shared flexible last

capabilities; First, improving merchandise supply modernizing second, optimizing third, flow, omnichannel physical and our technology our the experience; end-to-end footprint, assortment further enhancing and chain and while shopping inventory store localized planning, infrastructure.

few sharing engage more on simplify have Over how that to and future. on last I more continued this look to in effort inspire our consistent with experiences I our processes, align while to providing the months, shopping our the teams customers. forward

Now, through let's for our value levers. the quarter second creation performance talk five

versus slightly basis sales sales. of the X.X% prior above Net omnichannel Comparable First, of an on outlook. sales declined our owned-plus-licensed end decreased billion $X.XX the X.X%. high year,

rose mix. increases and AUR by ticket driven category X.X%, Owned

to increases, $XX Network year, of Macy's X.X% year we at expect ticket markdowns revenue was For category were of the million the AUR mix. and continued of remainder improvement revenue Media on Other $XXX lower sales. flat last net million.

Network of caution Media light broader Macy's is industry in confidence near-term long-term trends. Our tempered by in

net of credit revenues or XXX quarter, increased points We year-over-year declined million balances. card within card experienced and $XX rate across million stages the aged $XXX During basis the to represented sales. delinquencies of portfolio credit X.X% an of all

which outlook. call had increase first led bad to speed earnings our us industry increase negatively and the our results we of the delinquencies for and since in impacted This rise credit the as to than normalizing expected debt credit quarter broader While at the portfolio's was part quarter an planned. faster second environment, card occurred

for revenues the recognition debt bad of assumption. updated annual quarter card include credit reminder, a the pro-rata As the

of outlook debt bad discuss moments. in the portfolio the our within credit few We updated just annual assumptions card a inclusive will

second margin. is The lever creation value gross

year, XX Our below was Merchandise gross XXX points last margin basis year. basis XX.X%, margin points but lower our above rate than was prior outlook.

During receipts. processes quarter, leveraged of to excess and maximize the margins we and seasonal data-driven spring tools sell-throughs our

than by savings from shifts lower timing which, prior recognition, freight We were unfavorable inbound forecasted promotions, partially also by levels, in year's offset and shortage while surgically a last clearance of implemented our and efforts. outlook. above markdowns Merchandise better cost shift margin impacted mix charges our in the category

with and certain our change better informed This understand the the of did assumption, it low a to counted second in June to annual categories approach year. remainder outlook count the inventory the for helped penetration. receipt planning RFID materially for trends our provide added count relation In shortage in did and actuals categories The us quarter. physical shortage we but not

of of result, we a the portion third recognition the a and out shifting quarter As and into quarters. fourth the our accrual shortage second adjusted

carrier direct and from costs decreased fuel primarily year, expense contract prior due as as vendor basis lower lower delivery renegotiations XX well points rates to Lastly, the volume. from improved

was Now, let's inventory to and expected year-over-year management sales for of creation a fiscal roughly XX-month third tenet flat further key product year. Inventory is our on experience. appropriate last turn the having year. which XX% current based the for omnichannel receipt productivity. should customer to lever, turnover improve levels, and committed XXXX, the inventory to was down quarter to compelling a low inventory demand. represent We're Trailing value XX% End at point down

expenses year. fourth expectations, year, percent last SG&A higher the or than lever. our total prior XXX X.X%, is XX.X%, year-over-year declining were creation million, as of than discipline $XX sales. Expense better basis decline of a was in billion revenue $X.XX value reflecting SG&A the points from

in diluted prior revenues $X.XX credit were $X.XX which EPS this EPS. gross to a SG&A to Second $X.XX, outlook. impacted Better-than-expected the Combined, margin, adjusted card versus quarter respectively, by midpoint sales, XXXX. was $X negatively and impact relative roughly was and our and EPS of offset shortage, $X.XX by

Lastly, allocation. capital the lever value creation, fifth

accounts And real the offset generated due $XXX inclusive an change inventories flow, expenditures. in of from year-to-date, During lower Free primarily $XX half, of We of million million and year. $XXX cash merchandise The operating estate, had merchandise versus $XXX proceeds payable. million was we cash first million. lower capital we outflow last was dividends. flow million by paid partially earnings, to of $XXX

and healthy continuing flexibility growth of to in They consumer balance deployment, invest our sheet remain the respond and core capital provide and a changing while business in vectors. to top Regarding priorities. to uncertainty, trends, times competitive liquidity us

set, level cautious To have outlook. consumer. we quarter third and year full the on the view continue discuss a let's to Now,

October, student rate new prior levels, expiration the are to job new the calls, addition consumer. creation higher in and forgiveness pressures on of beginning earnings interest on lower In loan headwinds the discussed all

While how to is will of on especially these unknown annual respond providing last we increased it had contemplated consumers an many our them, so call, factors outlook months when still pressures. earnings after

As the on the discretionary such, is their consumer cautious we categories sell. spend our on maintain to believe and view capacity to prudent we it

backdrop, remains on Quarter-to-date fresh line our current, and values third demand. reflects expectations our composition that the quarter, year-over-year activity. with compelling Even we at clean, clearance promotions with improved an in inventories control. and that seasonless in this are there appropriately fashion results is reduced much believe sales are with Entering and

provided the walk through thinking how on full updated let's Now, our about expectations. back that the we I've half, are framework year

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Our $XXX cost our outlook include million call. continues discussed of earnings on to approximately savings last

XXXX, sales basis XX-week to of year. to Comparable a assume to sales billion. about on fiscal be $XX.X we down net to For now down owned-plus-licensed X.X% billion X% $XX.X last

the third sales, in in credit expectation a net expectation. The roughly As in and increased resulted compares prior a annual bad for million XX% revenues our $XX reduction to portfolio Other XX% fourth credit card debt with quarters. our to that. be to of reminder, about ease the has of card X.X% of for roughly revenue accounting relative forecast

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and customers. as value remain retaining assuming near acquiring communicate active the personalized benefits on we our future also any We base we our But in customer not to customers are term. focused new

fees potential still regulatory keep as pending. updated you Additionally, are changes learn regarding more. We'll late we

line our expectations rate remaining is of XX.X% Returning prior a XX.X%. anticipating better than to to which slightly gross the XX% items, are of to we XX.X%, margin

product use gross in variety remains asset areas shortage, technology, protection legislative are to including focused margin, to Our external reporting, on continues assumption parties strategies, headwind, a from advocate moving entrances of we to of impacts for which mitigation and a stores, unchanged. materially and away be for change. advanced high-risk target collaborating optimizing the testing staffing tools; high-theft our and with Shortage

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sale now fourth all quarter. expected be in approximately gains the nearly anticipated with to remaining gains Asset million, the $XX are

the change real rates, challenging more market While monetization to there become asset in no light higher strategies. estate has is of our interest

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sheet Fortunately, we so. the balance do have to

approximately We X.X%, is a total to $X.XX X.X% be diluted expect EPS of achieve adjusted EBITDA expectation revenue of million. $XXX X% maintaining adjusted or of annual our and Interest of now net expected we diluted reflects to an roughly million as roughly sales. which of to XXX updated shares to After percent shares. $X.XX, X.X% interest percent a expense annual to are as taxes,

There the positively When compared first low and margin, to our shares and relative end end and prior to are gross prior inclusive $X.XX lower and of an is to $X.XX. an incremental our interest $X.XX. share $X.XX gross $X.XX primary benefits. summarize, mix, And to SG&A, SG&A discussed count margin, incremental of call, high is outlook. quarter end together, expense what an our on contributing and outlook. the incremental the contributing are contributing our outlook volume EPS of high to expectation, looking to are parts we annual current the low our lots moving To of at

reflect in to $X.XX benefit our represents business to and our relative core solid outlook. prior execution factors $X.XX These a

prior a are impact. $X.XX $X.XX represents the of flip drag gains essentially negative canceling to other revenues Combined, side, to outlook, $X.XX, while sale this credit reduced lower each on also On $X.XX $X.XX asset card $X.XX our out. the are end low end to a high and

assume share not diluted does adjusted EPS Our guidance repurchases. potential

For gross margin the to third XXX of we basis better net third $X.XX points to than rate quarter, sales billion, least at billion quarter $X.XX expect of be XXXX. the

a and last warm soft and receipts categories, slower-moving in excess seasonal promotions and pandemic-related markdowns Macy's home. had year, including weather to apparel reminder, As elevated clear goods casual

EPS updated to End year up of inclusive down private last $X.XX, Adjusted and of single-digits card on INC recognition further credit our $X.XX down and brands. XXth shift as the quarter we support the be of Nike percentage outlook diluted a and inventories shortage. timing basis revenues low-to-mid to in to begin to introduce On

Looking provide sales low-single beginning contributions underlying of to ahead, we year growth achieving the impacting macro offset our next remain will that early committed digit pressures ongoing five growth believe and to our and an fundamentals vectors consumer. improved

low-double that credit external If are in card achieve digit 'XX asset ability becomes regulatory to sale have revenues, are we gains recent more additional However, difficult to more EBITDA changes trends the margin do shortage, and in and passed, late combat. factors challenging. continue, fee

changes been the prioritize as growth, the have year underlying to our progresses. working We're rest assumptions business. headwinds, we'll offset there Now, to be and the clear, regarding actively no to of opportunities share more and

the Jeff closing some for I'll remarks. back to over now turn call

and It lenses your collaborate and that opportunity watch innovative Tony. Thank unique profitable you growth. reflect Inc. am sustainable has long-term backgrounds, been and lead Macy's, on you you, confident ways will to exciting Adrian of two I to that

Q&A. for up it open now will we operator, Now,

coming Cowen. floor of Instructions] ahead. TD question Chen for Oliver is open go Please from Today's now questions. [Operator first The you. Thank is

we was and Adrian, that? you driver assume bad it's I What market expense. debt the it opportunity, assume have follow-up, margins how encouragingly AURs And card Thank better. been encouragingly Tony, morning. term, good guidance credit you. at was being were We as as primarily were the Jeff, XQ up. you Hi, there? XQs a -- look addressable And revenue behind Street, could longer are the that? small-format delinquency, traffic. the below What were to about offset dimensionalizing also the think XQ

right. All

be good to It's to with Oliver, great you. you. morning So,

expectation. that achieved we the rate of despite shift second we shortage, recognized margin in timing gross quarter our So look, with ahead the the

that. So, we were actually with quite pleased

Now, that lot a as to more we of We anticipated. than product we the leaned talked while year strategic a it quarter our promotional than clear promotional about, the We've into was and last worked less we in had personalized last was promotions. seasonal into allowed talked look, second lot really pricing maximize But the data-driven as as to season. the and and couple the exited spring been margins had that leveraging using we science, place our of for years our us been actually processes we've we've prior. about sell-throughs of

Now, we're actually product seasonal spoken ahead clear able the lot as several previous did of we schedule. in a we've about through seasons, to weeks that of

So, we're continuing the year. into to take back half the of these behaviors

The inventory add great in on I'd is other position. just be thing a would that, Oliver, our

are good category. the to a quarter, our been ratios XX%, respond by exiting that will customer So, interest. But third down have we stock-to-sales able to retain lot of liquidity

on at The expectation. the the fall fashion we as as that's as into our performing. started how back-to-school new go And well really looking read, has have we quarter all confidence We're quarter strategies. at third and fourth

excited just regards our the about question, If we're of impact I growing your stores, stores. Oliver, very small-format small-format answer could with to last

the the up of As stores. small-format the we are this but scale did remain opening know, stages opportunity, Vegas, our where think in Seattle the a up terms you that early in a be the quality Las in of customers, market, San of week, we stores financial and to And we're we'll several we announce did customer a as But to we Bloomingdale's. experience performance stores. about we'll format experience be continue store Last signals up we these up Chicagoland. our small open in within for opening Chicagoland, continuing this number Boston, fall. locations opening see Diego of positive Macy's

actively we're country at that the locations across accelerate appropriate growth time. us to potential So, enable the will evaluating

more on So to topic. this come

Thanks. regards. Best

you. Thank

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

Thanks. Great.

And seeing differences today, Tony, back margin given to you any believe the return Adrian, macro range notable you're changes just that change of topline for laid And that maybe target months elaborate So, embedding mentioned, strategic by year? growth a outcomes ago? to next to relative that about half best could for you've a income key potential the EBITDA initiatives three low revenue think year? for Any to the double-digit cohort of you're the in on how next Macy's best then out? external just in then year that that relative you the you positions

Thanks question, the Matt. for

Let the me opportunities begin growth. with for

of making right in our right of strengthening as it's malls for that on include in small-format that the more a senior well with It's as, locations closely leadership opportunity marketing, in are modernization of Adrian in right of customer, of a help also the private that. offers are the specific we're They And our going the stores the number that And the locations that of that few a at few brand and with, the reintroduction marketing, remain sure a are that but entire our designed that designed the multi-brand, in most the portfolio. off-price quality believe today The working months. last very to I've existing importance as to the our Under example our also Bloomingdale's level announcement has basis, new productive important that the portfolio Macy's, right described, last and executive personalized It the leaders brand, feel for Macy's that's but is underscores we us business. grown with Nike multi-category. five Macy's to to and around making the growth Armour the company luxury, or is reminder, mentioned, opportunity allow be for bringing vectors I brands And Inc. merchandise, as remember, replace Macy's the and these includes brand which I are opportunities we piece that the Just and of business to of as been enter densify, luxury brands. remains Adrian to a single and sure Bluemercury, every strongly markets. years portfolio. not portfolio market good is a gives Bloomingdale's our us amplify other expand is a bullish us power obviously, category business. Jeff across Bluemercury nameplate. we about. part beauty team of And and puzzle beauty on may The all the that stores as

to improving the feel we looking exclusivity of opportunity I experience, the as the of and doing the necessary the in find brand those our omnichannel to the well Macy's your level create fully that think requires digitally, physically experience. are making and question, growth us about And highly vectors. making sure we variety, as our people is strongly from focused But final deeper things that for, brand easier say customer they're we private more would dig and is seamless team comes on assortment. growth that the piece all for improve and assortments sure redundancy answering a that into the brands So, I eliminate

morning. good Matt,

going you through Just a few raised. that points

being goods. The choiceful they a first income how have They're is, discretionary we customer tiers. about discerning versus across about all quite think experiences

can experience we earlier we continue that environment. that on to within for in about the customers. thoughtful focusing do macro And things our We our The continue opening to in so, the positive spoke environment, deliver is, as about control be a the cautious, believe remain pressure continues to to we macro reality there we be remarks.

beginning will we next we is remain profitable EBITDA sheet, Tony the growth disciplines would as spoke business, next To to we your what core to is growth around within priority our management which we our track. and emphasize And that things is we cautious. we're see and think growth our thing So, on operating that about from third confident dimension the seen top kinds growth. balance profitable us around is low-single remain margins the and that in execution is year, that. to, vectors year, expense continue our fundamentals about continue digit management, that inventory five on controlling quality of that first of The you've our remain

relates Now, remains to EBITDA, as it aspiration it low-double our digit term. longer

factors list. are the our several difficult revenues, shortage, asset term. all worsening in in of again, earlier things Now, to call, offset, near we and horizon And on the as card we type at we of that top look the the spoke the credit about as near in the gains see and are term,

the of years. been to open bad row levels. still credit industry-wide year you for as increased has opportunity. an for us, elevated aged to revenues, fees, have card an in lead impacts we limiting all in for fruition. experienced Shortage, we'll as there's balances higher our second we've legislative levels will debt look, late think is comes Shortage, which that So, delinquency question at potential multiple the about just quantify something about to levels, if And that record at ruling be ruling know, across as card. a the know, It been you which impact on credit has

challenged strategies then regards continue mitigation estate, with will assets. really higher place real likely time will mitigation our And we higher be to confidence strategies real that, interest address ability but the Now, on take with cap to to obviously, our have is and rates, do now higher patient monetize right to industry rates. to rates, but in these put effectuate. those We estate, we hurdle in

at all different may future. growth Tony you to initiatives challenging. in But the ability and term EBITDA we on when the expense referenced, our achieve look confluence more we So, our management year digit and the through be the low-double initiatives of these more we'll progress that near near the in share focus as factors,

color Great luck. best and of

Thank you.

next coming Sachs. of go Thank you. is The question ahead. Brooke Goldman from Roach Please

and are thinking you've hoping for backdrop worsen into help you in have what what promotional should consumer about taking SG&A the How potential and could and incremental margins the merchandise improvement that morning levers of year. already question. you the are opportunities rate margin our the expense half identified? Good beyond backdrops, I was the you additional for you understand Adrian, dynamic us back thank in

Brooke, very Thanks and much good for the question, you. raising Absolutely. morning to

and As we management. the key, strong really from think are and pretty on that you've about the inventory that's customer gross healthy disciplines us around experience execution margin, seen

thoughtful to is about limit as time. about allows the on to but those, on executing have which seen volume call the us us you've done shop we The shortage. out we've margin one the about consistently bit of would over year inventory, the I customers continue a very from as to us for this execute with think little the from freshness to be side allows We'll content of different we've pretty of gross well that year our gross balance sell-through, of price thing as full support something competition. to Now, margin us for the inventory perspective inventory the relevant the a of management talked versus inventory lot our markdowns, composition the

So, -- this confidence gave which the year, we inventory shortage shortage actually had greater count, a and for midyear year. into midyear visibility us trends

some did shortage QX. we recognize in So,

it some is recognize in in recognize which done shortage different QX, will and what from which in prior quarter. fourth the is We to we've years, QX all

margin about all how So, promotions growth do business absorb We're potential we that fall also through sure thoughtful but the we the very of to are are we season. Jeff the respond we about balance the excited going any and in to have making thinking through to rate We're need Tony we're that to to about may spoke of of move opportunities in terms that cautious initiatives the about composition the inventory. excited the the year. to, and capacity

in about continue both quarter. the a on Xst expected that cost on seeing those materialize fourth the earlier the in As to and $XXX in working SG&A We're savings see come We've very those continue discipline, number year, margin and be the about it spoke portion some SG&A, But expense, that's we we our the us on being larger biggest of it continue focus relates been something time. in through, it and quite spoke year. to to in with call. million good We on for gross of a feel to the the about benefits, is back expense months. to of we expense for you'll portion focused the that June

Great. much. Thank you so

Brooke. you, Thank

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

end. was on and Chuck. Hi. curious, credit store I that performance would consumer, you and is just either in more, Sommer to the terms you're health of a outlet then wanted seeing even consumer suggest delinquencies. and of I wanted when data. also get little seeing accurate? by to at at banner dig into or This the the what by consumer of you. of more card high Greg Bloomies dig It you're card also color this for on looking Thank the is the the then higher what has credit I of health the into the outperformance deteriorated the Backstage health just

the a data, So, about and with broadly. we'll bit why card don't consumer more I the talk credit start bit then a little

I say So with the seeing indication thing regards the credit card that that is that one actually the to the the consumer. would think of credit I we're pressures our card can. an data, to managing revenues best card of credit extent some the -- we on revenues And is we're

speed and of aged delinquencies occurred actually credit on QX, that those environment. July. But primarily actually is and that see the the of did balances in know, out expectation we or you balances June accelerated planned a delinquencies we as based -- all after have what normalizing higher age So, across

So, adjustments there. we've made of number a

controlling control. we're Now, cannot things of we that things we can that what's is interesting control lot mitigate working to are about the this actively The we're that a is and things that we that there headwinds that see.

our gets the much we macro also customers, example, higher maintaining credit in we're you're the But We're consumer, at and active on card. retaining and their things their cannot reduce risk capacity. into are working customers places we prop target new Citibank, for that to So, the I acquiring card can have surgically we're what are where that's for we customers, describing partner, there with spend that -- health environment. to think around of Macy's segments focusing We're the very on on which exposure. the control, spend

to using one The income. find which metric quite for we debt/service approach. personal the cautious is as really debt leverage lion's proxy and ratio, the pay their we the environment indicator the of a real think consumer and we share income, the our impact is macro is is the disposable supporting interesting of having consumer's a So, health credit the where of ability on

This next credit which loans, about this the loans; we auto focus come card or going mortgage. student month is two; to So, is is into about know balances. in

they realities and with into believe these because have is as this half to pressure, move next we that deal continue new through coming back year of So, just to get the under customer that year. are we the

Chuck, about I'd is what your off-price. question add

that -- when just Bloomingdale's between know So, business off-price been we've on our going Macy's. quoting what's and with always

outperformed have was Macy's based points by balance about really with heard our most potent XXX -- has versus brand. a think discovery when part off-price. in been cases, an off-price the about It You an basis Bloomingdale's Bloomingdale's of option XXX-point off-price to mall at just outlet almost you the our That that at being, difference. is

XX% And different price are the affected, there and is so, $XX,XXX building the what customers the brand They're we less. making the have about is between of customers. their stat We how And full spend Macy's saw seen Macy's stickier It's of talk quarter. that that Certainly, with in under no relationships pressure, with and really frequently. cannibalization building has up the us. going your been over time off-price side. just on more to income it kind They're is then shopping that's second or the about we'll more of question Macy's is levels the that brand. certainly

So, they've been under pressure.

the looking controlling with our particularly got can of in what headwinds all the are do what we've that And reserve think some student ensuring we categories coming, to control chase loan into that got and really that I loan, forgiveness. and to we're right we've ratio demand. there of expiration is stock-to-sales receipt

and our good So our right good we consumer. we quarter now with strategy, where inventories are about fourth feel feel about this

Great. Thank you.

Blake of The you. go Please from question is ahead. Anderson Thank Jefferies. next coming

little comp in year. kind could conservative. higher the a just in the pressures of but if know you're I good monthly school? give guide confidence bit about comp morning. And talk or rest being you -- the maybe was about then of back level, the consumer, color for trends a talked talk reiterating your on some you're Hi, I the more in wondering the on seeing little to guide you've

promotional your And guide in promotions, more for then and commentary bit give year. comp environment, how about terms of the little question for can previous holiday? wondering for talk on a you was, decision then second holiday Just your to planning inventory on the the the if expectations reiterate you're the

Hi, Blake. Okay.

the let's about quarter. talk second first off, So, just

coming based So, we're spring we to into liability monthly about quarter overhang, first not seasonal disclosing on quarter the on the But the performance. we of did sort that had any be inventory talked our we promotional, call, we expect third as the liquidated second successfully quarter. and

since So, the clearance-driven we than what at and now don't want looking in is third ourselves ahead we trend that to that more right of get -- experiencing quarter. are in planning are

healthy having our as Third quarter state important mix started four between pricing balance great stock-to-sales science in as into it and green strong the having really is growth the really shoots our walking of the fundamentals that inventory as with season sheet, fall on really factors with in getting our of well with. be all a discipline at a of performance, on is in items, the then having we're that, our and kind traction as most fall place being expectation, ratio, reiterate, back-to-school new And those fashion. kind to stock just

as So, in confidence the fourth have we about talk quarter, our strategies. we

three other value draft for are we fourth trending our gifting, great it is of great When that quarters. gross newness business quarter. a of you and the businesses, value the of look that So, high the the than amount should penetration so expectation quality, margin have some the like -- built of businesses, in beauty at that. gifting higher and fourth quarter off the is We into

So, We're sharp values. we're be on going our be to going to competitive.

XX we seen brands. the of through shop way calendar couple through where in shopping We've thought that. the Friday, years, ready where all days. them over that shopping earlier past promotional to of we've the taking so the each Cyber they're is we of our all customer As last all customer, Black for Monday, -- expect built and the the lull We're

that's gifting Toys just the respond of quarter, Nike, penetration team faster importantly, R be in system and and the think to in trending fourth also to is time Us Disney you specifically, in liquidity and it's add look the always inventory agile the ever. collaboration. the when this at Very that than the I addition of the strategies businesses, to to it's the able responding real

is at into of -- that's going what guide back into -- where status our we and the we of what So when of it. the what are is built think about year half we're the

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

morning, everyone. good Hi,

the debt did about And it be bad was the did about as expense what's of what quarter, different and XXXX, how think versus current cards, How at similar have you then exit? credit you I know, what and you -- looked could it's in mentioned be you trajectory? this just categories quarter? see should you to third Thank the Anything you second As cadence there the should the And looking school. then Tony, quarter Nike and note? you. brands, on we just assortments that other that want enhance to back Armour. nice Jeff, about we tourism to to? brand Are other Under on that and think

question card, Good regards morning, Tony the around start Dana. have your and I'll Jeff quarter speak and the to -- cadence. then to credit with I'll

card recent our at credit XXXX look, levels bad revenues as looked debt our we've back conversations. as So, and far in

from recognize control puts our controllables perspective, But with the terms evolutions been takes. of have there our to understanding of navigate good that to Citibank. continuing a and have agreement the continuing we and So, We earlier. I in of the shared, consumer really so debt/service also is and much around what ratio. be Again, much as consider controllables, I mentioned the so a beyond as to around the bit this health is of little it's we

average income about as auto think interest that consumer creates those number think loans, environment think particularly brand, As experiencing student household I cards, you the average referenced All household their the of about income Macy's headwinds responsibilities real earlier and you loans, is about referenced servicing credit of bit in mortgage. US, their a the our liabilities. customers, in the rate they a I higher little a challenges. in

the just year, look than giving personalized a normalized offers leaning mitigate project bit we by can. our as expected. into but increase customers, we're ways to well at we and they normalize, to really usage to aspects, as offsets credit the card, working best to But the faster Now, debt new we more bad to as on diligently customers, very coming proprietary little into continue levels loyalty acquiring find did

going I'm new on the cadence Dana, take categories. it the I'll hand and new and to to over Tony and by tourism, month on I'll -- brands

in to as -- earlier, the my conversation mentioned monthly we're question heavily performance markdown I not the On that our from and Blake, promotional-driven. in it was disclosing

quarter. second is that So, on the

to relates return of and depth this have have at is tourism, Macy's of Bloomingdale's. still it that the tourists international seen we one the not that we As typically the

So, X% what was is it It's international generally just of our our pre-pandemic of remind, overall to That's X% now tourism to in south X%. sales. business.

was first the future. So, look at versus know not where quarter, it Tony. predicting be, that to you that's second versus level. coming quarter We're I'll we business it similar. to tailwind It from in when turn comparable XXXX is the are tourism the but yet when over that was pretty going the pretty

Thanks, Dana.

I important go brand in I is number obviously a good as into expectations our just example in built possible of think think opportunity of forward. the the we Nike one what's the we category, the It's have brand, introduction an active Nike. and

Macy's things. to people to just buy The Nike, come don't Nike other they're who going is, for benefit you buy have other

took tell they through the merchandise you I what I'll assortments. as me last week spring So, with the team shared

and think and to level is bring desire going interest was an newness that success hear I to of forward. level that discovery our that First, interest in in the important our the the to newness of I curiosity, ingredient And excited of more assortments. variety level and

at that's that I looking is important think the these thing categories are adjacent. other

more then allows which and And ideas stores the newness we part had team to haven't interest and Marketplace, add quickly, think have more we I at whether But to bringing we things or test So, our a whether excitement brands before. Marketplace. our more keep to very and as us on we the Macy's assortments. quickly, move of introduce we can is those or that focused just Bloomingdale's them

Thank you.

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

of of questions thinking the Best Hi, morning, this with is, you the and Two talk how first the trend you. guess, back Tony good of for where year? will the the for you. one platform, undertaking. I in-store, think sort you about you and is digital about of of Macy's, on great into at versus that when the to year? adding marketplace, into with want brands is on luck are digital ramp the to And half that the Thanks. be sort you then of be brands sort next the or holiday especially it more on the

Bob. Thanks,

I think brand on we are read assortment on the Marketplace the early growth as about the excited and, we Marketplace. Bloomingdale's Macy's of mentioned,

accelerations on is accelerating as XX-plus have businesses. movements in channels, business. digital and think, career marketplace who focus will always digital satisfy us omnichannel joins to to space, I these where making mentioned, performance he matter Bloomingdale's in year Bluemercury And our very be just everyone choose focused overall remind customer, after on that as they sure that well want shop. We at also we a helpful, between Max who to our we and are Macy's the Magni, business, will distinguished I McKinsey, our the and the based we cycles and while no have the

main as going in as our Macy's, expansion, bluemercury.com. customers our most of part we of want because to are where to place That's transaction, shop. on go and part a are Bloomingdale's, doors, online, that because important a our a at make beauty of into both renovating small-format a that's that's experiences because experience Bloomingdale's, mall and well floor we sure investment of new That's a part So of on people place off-mall. Macy's

really do the but customer. manage channels, we satisfying are the on So, between focused ultimately we

just question have And delivery the it. expense. other Got on is I

guess, of the are I planning for you how But the was this year? that quarter. remainder it think down I

the processing which of of that a delivery. combination cost has also we our savings initiatives Well, think impacts delivery expense the within part our system of about, been goods the thought about we've the of and how some of our placement

to an for So, opportunity look, continues it us. be

to terms to expense but about We expenses. to profile, think we of truly continue Marketplace, We're renegotiated owned our versus from continuing which not some benefit also how regards with at improves improves margin only opportunities to VDF our carrier profile. versus look optimize the our

to And delivery relates a it expense. so have there's that as just it to and we ongoing as inventory efforts of number relates

you. Thank

problem. No

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

Can guys. long those those into thanks, you second reduce you what in I incorporate an sales think mitigating percent also guidance? at might it those all. to guidance, don't curious, half mitigation up an didn't not credit? And Thanks. those Hey, your sales What on exposure take impact immediate done You efforts the you efforts looks to have mentioned your how and made portfolio effect? have potentially I'm would topline remind us last higher-risk -- card How is customers, your do percent of And credit of are versus year? on of that customers. that

you. be great Paul, Absolutely. with to

X% lower question, look sales. history, first further your you at around been if net on typically So, than actually in we've that. back history, it's recent to But been X.X% in of

So, the the understanding back about raised as was of that that as that credit card our percent looking sales, question looked impact it puts and revenues earlier XXXX performance. a at far net we've at and as takes actually

healthy portfolio, the our portfolio. relates of card we credit to it have a As health

scores not. credit, of I've a decisions beyond their factors health capacity As at the versus who look number we to line understand thoughtful make mentioned card to on spend, their of the the of we before, about approve FICO consumer,

do to and We do portfolio. continue look on our healthy we -- there So a return we'll have assets at that.

to around increase capabilities, again, reality base in leveraging nameplates. these through to is and these to cycles that's will shift given look, we've our impact consumer. But the the context seen appropriate our cycles think card credit really before, I we've within our credit revenues. card revenues customer share And we expand across the of of the lion's mitigation continue on card the does to the been seen we're credit the that the that pressure what impact all to find strategies continuing levels, personalized We've work before.

we So forward. go business as we our it's of actively manage to just that another have dimension

sales done your what on percent Adrian, of are credit card? credit, the proprietary

program, So, they're within XX%. loyalty our about

tier about think loyalty across I XX% program, is tier. but done our a are our sales of bronze non-tender

you platinum about So, at look and our when our gold, XX%. silver, penetration rate today is

it. that what you percent Got of the And customers mentioned? higher-risk

Look, Paul, portfolio. healthy we a have

We of that's subprime, nature are question. deep the your if not -- in into

high-risk our approving want period to not card longer healthy using of are We customers customers. We a for time. have

aggressively lean And so, we subprime. do not into

Okay. Thank you. Good luck.

No problem.

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

taking question. for Thanks everybody. the Hey, Great.

me. Just two from

the wanted more. SG&A you just contemplates in than I guidance little that seems million The prior, know bit like I you've there first is to SG&A. savings identified. reiterated a higher on It dig the $XXX but in

So, categories? can seemingly just as mixing result, can you as three into beauty, you in how strength select you then versus those a weakness like or categories all nimble or a worsened lot. or out you hash certain be further categories changed months what's in Thanks see further are there ago?And secondly, strength

right. All

Alex. So, thanks so much the for question,

Jeff. Let SG&A, then Tony and me to and start hand over with it I'll

the driving outlook fact $XXX of the We our Xst call. portion identified is includes that in June spoke to expense we around that of annual look, a delivery The XX% on really a across that inbound business. raised and simplifying spoke SG&A, things savings our related million to So, cost and to was the of earlier lot is freight that and remaining XX% the in processes like conversation. efficiencies the

quarter, Now, that with better focused to discipline we than we these And as on the in disciplines much demonstrated that especially, to and as We our opportunities management we're to, we're volatility these in SG&A environment, of continue very very management. lots be was initiatives we referenced. second and think expense I've responding as and, this expectations so focused there's best on expense can. due

the important focused back the half to as we level what's continue be about think in we appropriate is but the expense of experience. really making investment on of have year, management, we'll customer the As sure well

destination. ahead we is quarter. a which where the fourth That's is tend as to us, quarter win biggest gifting Our of

that we And experience, we compromise make sure to has can a don't year. shopping that to we so, and the opportunity biggest the want advantage the solid options, we of customer have take

do chase a let that your rigorous Alex, and second the positive. that's expected on we on back a that that past the into have just -- we've liquidity is is then, weekly that And materialize. new as discipline And always of always in on we cutting We signals me year built and basis half. signals receipts have didn't what that can we are part a based -- question. the had over talk that about We

to this an or opportunity not always has is, the issue available in having the where be So, to the inventory system going to. not of customer brands been react

So, in to the this full the as in to net -- buying changed vendors, key moment. giving past, our allowances, to we've, more have customer really into is relationship respond buying our obviously, the cost, with flexibility us discussed we've not markdown

beauty, confidence So, we we about have your can that, question to beauty. chase into

strategies our be. aggressive us merchandising for our brands, We and where and customer fall based our have season, built to the strength teams and trends the expects obviously very on of those

some, chase going So, into. to to and react and plan we we're some

we that Macy's, have add Bloomingdale's me beauty and let strength Alex, Bluemercury. across And and

off-mall. for us nameplates. an well digitally physically that's and all trending fragrance So three on-mall in and category and is important And

fall. for bullish we're business So in the the

Thanks a lot.

Bank you. Thank ahead. is question Lorraine from Please next Hutchinson of of America. go The coming

I focus Thank savings to for wanted your you. Good on minute morning. a cost programs.

be about spoken that 'XX, but of seems guidance the versus much of are rate how included to incremental a savings outperforming that XXXX? run have you're You early. $XXX it in in $XXX much in fiscal will million these million XXXX How savings

for a Lorraine. good you Thank question. question, It's your

of referenced, million. last $XXX gross we margin annualized benefit million $XXX call an this SG&A to is about What is and both on million was of spoke we the a as So, that there combination the year expense. to $XXX

those year. initiatives and from reality the opportunities this benefit to those is we're that continuing Now,

seeing say as key is thing So, I an we're we're And would pretty excited here. these we're initiatives to that about are what real. continuing organization, opportunities. into expense the The lead

into and and think how for this takes clarity how next year. on get XXXX. But our working specifics about given you we'll you much of puts as profile those margin on will keep through still profile we not as we definitely into growth get We're greater next give materialize posted year. kind have and We we

on I similar dynamics updated half just going outlook. looks second quarter about stream wanted bad the recognition sounds Can revenue included numbers the talk like second debt of guiding decline. a annual this the It like down for you to pro-rata And you're up But to it forward? credit. then follow

Yep, absolutely.

So, the write-offs leading the indicator are debt on delinquency bad rates.

all way we up the is and at happens. XXX actually the XX-day days, So, days, look to days, increments, it XX XX when days, which XX at write-off

think the level our from of we actually be that past about the across as aged what trends delinquencies given we believe perspective and increasing balances, see all has see. to been the So levels, purchases projecting that we're debt we we bad

confidence those believe of us perspective what based greater our around and debt level So and gives credit a leading given factors the be a and our levels. with what around that consumer, indicators in see bad card will revenues we other we on

you. Thank

problem. No

Thank you.

from UBS. Our will last Please of coming ahead. question go for Jay Sole be today

Great. much. Thank so you

you me. rate secondly, XX July to give to or July, peak months? more the confidence up company the stores? and from just And say, small it next, over what up proof the small June saw XX in can June see little months opening to than in and you was And Thank cited the July? that delinquency open on on was small you how that stores, you're many you then rate points a that stores questions in slowed for elaborate just you. One, on bit delinquency higher you the two Just June seeing six then the the months

for your question. much so Thanks

So, delinquencies, is to thing the did mind higher year. for in that delinquencies keep we on this plan

We was we last projections spoken time normalizing. first our in environment than this the have actuals. conservative more the the XX credit really of actually months number that the quarter second a saw over But times where about were the

that and the and our that for few return doing been with the the on the a to question Lorraine's making done moments that what July, spoke But a we've looking is trajectory adjustments trajectory we effectively, what is acceleration, particularly ago. normalized we've we've a more in appropriate So June basis adjusted of saw to that per at regular I environment.

there about. we stores, three are about think things small-format that kind we key think of As

the the of what including at and of is first experience seeing for stores And of experience, the quality the of experience. healthy the about as the there's customer number we these service, availability are of we're look different factors, quality The we the these of factors of numbers product, quality think performance as a the the quality very all customer.

of business. thing is the second that The we trends at the financial look

we're our lots even so, product, stores around getting for learning engage in year-over-year are healthy growth growth comping. see portfolio, local of in that market. experience, seeing and customers But We stores in actually see we how we're that spite this opportunity are around of better. the comped, we And continue to in

the that third about ahead. excited is that's thing potential The we're

of that, to coming continue stores. we are, so you we'll can quarters. complemented And of about in believe next that box small-format where to think large by We months number to big see the a customers opportunity is and frame the we healthy in a we where stores, when portfolio time do invest, invest, we'll where an over months described, able but accelerate more there the hopefully, that several share be specifics on

make excited and small-format Jay, Levi's I and And, necessary looking in that sure portfolio the we're would to other Yeah. seeing that to as and at expand Hut carefully add now proof traffic, small of Nike Sunglass we Adrian Line conversion those now metrics host have whole and added of that Macy's a stores. And the we mentioned, Finish are very doors. Polo points and to the

much. you it. Got so Thank

Thank you.

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

to thanks, forward third you days who's call, everybody. look quarter on updating on enjoy we of hope and our and that our call. all of So, summer, the you November the still the I you results operator, last Thanks, on for on

your thank you for and gentlemen, Macy's. in and interest Ladies participation

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