Macy's (M) 16 Nov 232024 Q3 Earnings call transcript

Greetings, and welcome to the Macy's, Inc.

Third quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this call is being recorded.

I would now like to turn the call over to Pamela Quintiliano, VP of Investor Relations. Pamela, you may now begin.

operator. you, Thank and everyone, joining us. Good thanks morning, for are me President, Chairman our the Macy's today on call Jeffrey and Gennette, With Inc. CEO; Tony Spring, CFO. and Elect; and Mitchell, COO CEO Adrian and our

on release, Along Comparisons a the with section website, comparisons noted, our Unless of quarter be we our XXXX provide Investors presentation our refer appropriate been are best will benchmark provided to posted third provided to references guidance or has on where to August otherwise the macysinc.com. press call, prior XXXX earnings outlook to All expectations, noted. versus XX unless XXXX. the information performance. otherwise

assumptions uncertainties are and statements factors be could the to discussing of results materially we our today. of uncertainties forward-looking filings the These A and operations, is cause the Exchange Private and detailed with from safe Litigation differ discussion the subject All financial and measures. harbor XXXX. our In provisions subject certain of non-GAAP that Commission. to of the are Securities forward-looking actual in these Act mentioned results Reform providing statements contained expectations Securities will risks to

to this our being With used replay non-GAAP You well Today's others as regarding call. turn section available approximately on Jeff. be over website. will the webcast is of of can that, the after these financial call on conclusion as our Investors A find information additional measures website. it hours X I'll

and Pam, good you, Thank everyone. morning,

Adrian promoted pending the Tony as became elect COO Spring of of Inc.; you're CEO in As announced Mitchell to CFO. At CEO. President all aware, was time, that role we and retirement dual and March, and my Macy's,

headliner. incomparable last today Between the successful our holiday year, end CEO Thanksgiving year fiscal iconic with earnings I had to Parade. our and Macy's season, ensure I the then, and through marks the of for share we which starts smooth as work will While many Day call. a this now remain This my

Following we enter Thanksgiving, sales important period. our most

we is have our assortment refined have and our shopping gift for customer improved so looking promotions. nameplates, we our know our Across value, experience. We simplified

confident are received made We by strategic the we be will well our have customers. changes

going now our as turn value thinking for plans the will From X to and the there, holiday outlook quarter nameplate by CEO. about then close discuss I'll reflections Tony third go he's time results, over to of how the to and on the over creation I'm future. call my remainder year, and Adrian with levers our

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

the support. across thanking begin everyone to be the Throughout as thank you illustrated your Inc. call, to we morning. Jeff, privilege working today your a it from service. what empathetic sit you've years, on his CEO. been for like Good for it And I'd you. here Jeff and with family, earnings by has a successful takes last Macy's

on And adjusted third our that report your expectations. to quarter above last $X.XX of diluted pleased was call, I'm EPS

Our sales, all rates better expected. SG&A were margin than gross and

to last We a the X% Macy's and XX% tailored exceeded declined with By were particularly comparable women's XX%. inventory benefited a ticket year lower challenged. X.X% expectations also Macy's an sales interest big nameplate, and licensed tax owned and net We ended sportswear, and Women's career position, and on inventory Sales expense basis. XXXX quarter cosmetics, strength sales sportswear clothing. and prestige handbags plus data declined X.X% Bloomingdale's lower-than-anticipated results fragrances beauty, men's casual in down to with in clean aged rate. combined down from and

by Off-Price strong off in full-line the operate comparable At Macy's stores In online. start. arrived in outperformed late October, stores Nike our XXX division, and online, which we are to points. basis XXX introduced and and UGG in owned stores XX they Backstage, Home a sales Both about

our sales with were media line down and top-performing and in celebration, comparable roughly last were apparel Net and X.X% X.X% basis. billion which impressions. X.X we more designer expectations organic declined XXXth home results while lapped were were plus categories shoes included sales challenged. men's, as women's contemporary, Bloomingdale's, anniversary on over year's At owned Beauty, licensed an handbags

During the several quarter, Beard, Veronica new added Mill. Alex brands such we as Hatch exciting and

We outperformed an Bloomingdale also breast Rosenthal awareness Aqua about launched full-line by stores month. comparable basis outlet Kerri points. XXX of cancer with collaboration in honor Bloomingdale's sales

launched comparable its recently of Body are well Trillian has sales which XXth color on both & skin to Bath brand care And its responded been had up Bluemercury Customers quarter with growth, feedback X, X.X%. cosmetics, our and consecutive proprietary net and categories. largest positive.

also During spa the Connecticut. redesigned store as locations. This the prototype future for will in a unveiled Canaan, serve luxury experience in Bluemercury quarter, New

holiday, will that which our discerning assumes categories spend customer nameplate offer. our pressure continues Adrian in across be to discuss Looking to in they discretionary outlook, shortly and how under we

last versus We react increased flexibility customer have year. the with demand reserves to open-to-buy to

while We is promotions healthy gross providing to needed appropriate end in competitive on fourth nameplate Each focused with plan experience gifts our gift sustaining will in across with customer value and and through and fulfill best and portfolio And new nimble as for position. the an the be quarter the in-store customers' exciting spectrum. online, margins guidance. the to respective our this season needs our we're holiday ready inventory

campaign first the Style, evolved. holiday Love. year introduced Macy's, has last messaging At Give around Give

sales industry, language Own quarter, La Mer. basis of compared drives and are to biggest XXX this offering De the year. Your brands customer-facing for rising the in new top-performing fourth authority, typically and approximately over-indexed York balance with clear beauty partners category the including we have have discovery This year, many Beauty and of conversion. points by We penetration the Chanel, we Stations inclusive the sets JLO like in in that Gift and Make In

experiences our including our online and private and fine more selection Pandora to product Disney Cashmere. brand, selections. jewelry of exclusive XXXth anniversary Outside we and and find stores have We Beauty, fashion updated offering gifting our and added

celebrations, MMK, campaign retailer activations. digital brands, in-store and as of season, Mind At from Throughout and immersive experiences Reese Bluemercury, best [indiscernible] including critical and theater as features more. At exclusive customers assortments including body which featuring including from products we're Assaf, Geiger, and brands featuring exciting Flayer curated the skin to David look we're our embracing care, SkinMedica, and forward Bloomingdale's, Walk S. in Durga. fragrance shopping our collection through can Yurman, our new holiday our Inspired Kurt & well D. and top gift

consultations to new and opportunity person the have experience customers loyalty activations. spa exclusive complementary member treatments, Our gift in

for confident Looking are fundamentals can into Inc. and customers I evolve of beyond Holiday, The a am destination relevant Macy's choice our partners. we more there.

insights. a its from learn This becoming our remove of We is as portfolio other can have we with silos distinct We advantage. own a identity. collective balanced each each without optimize another nameplates, to customer one

art are We to say stem. I'd and that steam balancing like not this also science.

We We're and with are of of accurate embracing assortment, working influence. today the which This does want data-driven agile want aisle. redundancy. partners. proactive variety leveraging demand. provides science in judgment drive customer data human art use an more customer more based They AI closely on endless tools, not our and tools, an married vendor become improved helps changes the including machine learning decision-making and the to versus The with emphasizing best us style,

reimagination. delve us will which Macy's our in into rooted private core starting brand scale customer X with growth and business strengthen now, our help insights approach balanced I'll Our vectors,

taking And September, of performance to our rolled our next the fuel in learnings We the brand further XXth new and launched are elevating design Inc private in we pleased both out and strategy brand August. We've strategy. of the offering. On comprehensive private been Reimagination, phase our fashion with

we continue and In Macy's our Bloomies stores, second to format open small growth locations. vector, new

As roughly X/X a reminder, size average stores. of our these the full-line

growth. the checkout license environment, feedback ideas and store Our stores owned format appreciate ease while small year-over-year portfolio comparable shopping Customers to on of has and been generate of improving. continue steadily inspiration service styling plus sales

including representation we San locations, brick-and-mortar quarter, Bloomie's Today, the market, month, in we this another Bloomie's. small to and Las opened the in it's great opened and and off Chicagoland This Diego X In Bloomingdale the we Boston. operate Seattle. is third XX start. And a physical in our Macy's first in Macy's XX format, and a Vegas, new small-format

plan and through Bloomie's we locations October, to up open Macy's XX XXXX small-format in committed well. as expanding additional announced to fall are As to

Across quarterly basis. the its of third quarter the digital over marketplace had Macy's and brands brands order Bloomingdale's experiencing increased consecutive It introduced to healthy end by vectors, merchandise we're grew XX higher per the July marketplaces, available growth had both the X,XXX average on and scale. gross curated of continues at and value cross-shopping, remaining quarter. in at on on Touching quarter. the resulting a the value XX% units platform marketplace end approximately in

multi-branded for Turning a Luxury. We to our upscale as option vector, view winning retail. Bloomingdale's growth fourth

modern mix accessible beauty as to resonates growth Our confident care Bluemercury categories assortment X beauty advantage a offerings derma with and our products continues view with authority a aspirational of the skin long remain across and Macy's Luxury's all as personalized in leading an points, positioning the experience is a products And potential. of business combined our destination elevated brands. establishing cutting-edge shopping is to luxury price term customers. services. power with scale with across normalize. and itself competitive as We nameplates Luxury We a

vector and Communications. growth fifth Personalized is Our Offers

excited including several journeys. the We're positive been Our in of testing and the team testing are multi-touch seeing throughout move to from has year, signals scaling and to XXXX. learning recent new launch

welcome our Olivier hard customers. international a a like view handing elevate warm dedication with Before I Bloomingdale's. brings global want it further new Olivier to Bron Bloomingdale's consulting differentiated to to XX-plus will to experience, for CEO, to that work their And years and teams our of I'd and over retail Adrian, our extend thank

their in industry ability headwinds. navigate team confident and uncertain I our am challenges and an macroeconomic leadership environment, to

strategic to in sales that, turn and me to single-digit are low fuel investments growth let our committed appropriate beginning Adrian. a it over ongoing making We the few to evolution XXXX. With

you, Tony, and morning, good everyone. Thank

commitment I ago, Jeff's led foundation team, the of our would Inc. we it leadership, was omnichannel and growth. partnership, have to health discussing for by levers, and guidance value for Jeff established the have company joined retailer. Under quality transforming years financial Macy's to because like I into X When Before modern his support. operational of creation to returned a thank and X company Jeff and the the his the stability

creation value results let's levers. X our discuss and quarter third Now

X.X% decline AUR sales. $X.XX revenues by from declined prior Macy's of The owned of within $XXX higher was XX% grew primarily primarily or Credit X.X% $XX XXX and the an product net million and bad revenues portfolio rose million sales Media $XXX as points delinquency First, expected. basis plus category the billion decreased net X.X%. were on X.X%, million better sales omnichannel last expectations. X.X% card in or licensed or Net well $X declined sales. prior year. changes within as of million versus assumptions levels in was revenue than year as portfolio year. Other debt expectations. to the line basis our debt Comparable due Network the were Credit mix. of revenues our bad driven rates with Owned versus sales, and of card

Our scores the on for have last are and have new accounts the their X than FICO spend to cards. capacity receivable cardholders is largely higher the co-brand portfolio, proprietary which prime. years over overall and risen

the of bad credit or card assumption rates debt to a delinquency expected of no annual and is levels. remainder Looking the there percent as our to year, sales change net revenue

creation The lever is second margin. value gross

impacts margin Macy's a freight points XXX nameplate. these as Reimagination in inventory permanent improved higher of recognition to anticipated Our informed our merchandise rate last category discussed expense and private brands than our shift were June quarter. the gross in margin Merchandise timing XXX as we brand, basis benefits physical of mix Partially quarter within benefited by basis call, due on also the during transitional year. lower inclusive changes Improved second the exit the shortage offsetting counts. points, margin markdowns XX.X%, largely of was

value basis points reductions packagings The shortage year, percent our as in sales assumption in delivery third in net last remained expectations. work a for impact inventory traveled. tied to quarter prior This orders primarily third from expense resulting allocations is productivity. improved reflecting Compared distance and merchandise improvement lever, closely to materially of unchanged the shortage creation our and XX annual

year-over-year XXXX, of Our last for XX% Trailing flowing Holiday. supply down typical chain up build X% the inventory turn -- was X% is inventory down XX-month was versus end-of-quarter inclusive seasonal to year. smoothly. and

$XX fourth were value fourth a $X the versus X% year. ongoing favorable declined the creation forecasted billion dollars discipline certain to million million from to previously timing Expense due our third SG&A quarter from prior dollars of or SG&A prior is our quarter. from commitment SG&A lever. benefited expense the roughly $XX expectations, of to discipline expenses shift

points last total year, as year-over-year revenue XX.X%, percent the reflective higher basis was XXX of in SG&A a of sales. decline than

EPS last roughly timing diluted $X.XX and SG&A rates, contributed with prior of interest margin $X.XX EPS gross shift in better-than-expected interest versus expense Third rate $X.XX expectations. from combined improved versus low quarter SG&A the a and and lower $XX The to tax our expenses, adjusted was year, of million benefiting tax expense sales, rate.

capital cash Liquidity $XXX paid we from million, and and fifth the Lastly, of proceeds million remain priorities. third expenditures, allocation. healthy an sheet million free $XXX million outflow capital $XXX of generated of real a balance flow quarter, inclusive with dividends. in estate have $XXX creation top value cash had million flow through $XXX of lever, Year-to-date operating we the last year, versus

and capital We deploy invest continue growth. long-term to flexibility to in financial ensure to prudently

our Now outlooks. let's year full discuss and fourth quarter

quarter, expect sales billion week. For $X.XX net of including $X.XX billion, the we fourth the XXrd to

confidence points the outlook better destination, expected than Inc. a rate reflects of including quarter be to sales penetration, Gross fourth increase beauty sales margin XXX Our the our as XXXX. basis Macy's, in particularly fragrances. least at in gift-giving

actions of As competitive we as heightened promotions the higher took experienced and the markdowns XXXX, fourth a respond reminder, quarter environment. to we in to

in growth gives an takes of margin to into the well marketing million in into latitude as quarter items expenses $XX year XX year respond incremental XXXX. changes XX% investments as locations timing to $X.XX, outlook to of million discussed down seasonal $XX portfolio Inventories SG&A the landscape. Adjusted the shift brand previously our of and vectors. by in gross impact private EPS and us are last anticipated diluted Our certain $X.XX fourth account closure and relative combined our $X.XX. to of merchandise is and anticipated of quarter fourth End the in to Together, these which in build quarter a last flat inventory a early higher EPS than XXXX. to of approximately to transitional the reflect roughly and reimagined penetration less promotional

decline plus third outlook, sales comparable to year account X% expectations quarter brings $XX.X basis X%. of $XX.X a Other revenue into of billion sales Taking on billion, to our results quarter to our net a to owned fourth licensed this full be revenue margin about and or percent a accounting rate XX.X% for X.X% roughly currency XX.X% to A about as SG&A to credit of to of be net XX.X% XX.X% a XX%. XX.X% sales XX.X%. with revenues of as gross net to of total percent sales. XX-week

of Asset approximately expectation $XX X.X% as a updated outlook roughly total are million as EPS approximately share $XXX of to we and which sales expense of X.X% sale percent of taxes, net our or percent interest After of diluted revenue annual and to interest gains X.X% narrowing to $X.XX million. adjusted diluted includes a X.X% million. Adjusted EBITDA to an annual of $X.XX shares. XXX

more our shopping relevant across to products, customer. our optimizing modernizing are value to are more on technology, offers look automating to a to fourth customers. long-term to that basis to quarter on forward driving and efficiencies, we inspiration personalized sharing to growth committed profitable a beyond, on enjoyable centered and As experience next and must footprint, physical decisions call. from We more communications, experiences strong we year ladders providing how our to growth on our compelling daily sales position for our We channels, deliver bringing

to that, Jeff, one And call last hand with back I'll the over time.

Thank you, Adrian.

to to Before as on like X I Q&A, CEO. turning comment years my would

data-driven my on processes the am expense more a and achieve and proud contributions. tools leaning did agile into renewed to a I pandemic, company, We disciplines. guide I and had I to While focus everything inventory out accomplish, exited set not of healthier

of we sheet, In maturities of XXXX significantly facility. health debt, the our down term out pushed the our extended material improved debt balance paid addition, to and credit asset-based

partners, through our in strengthened sustainable and programs purpose equitable our invested $X a Mission more of We and and directing help people Every the XXXX We company future. introduced create billion inclusivity. our to One across social colleagues that platform, culture products,

diverse We underrepresented with Pathways who and And lead Inc. to a Tony, XX% launched funding leadership growth. S.P.U.R. shifting and very profitable to sales owned committed to to we Macy's, strong which reached businesses. race equity is provides continuity gender also pay team across ready and have

to Macy's leadership foundation It a as the their our has corporate like confident stores, place am been the for on honor team. to would their culture Directors and is team and senior I and build dedication of Board style. thank to our an such work cornerstone support, with a of American talented and legacy I for colleagues across guidance centers management offices. and distribution in

over And with the to I'll it questions. turn that, for operator

question first JPMorgan. of Today's Instructions] from [Operator Boss Matthew coming is

you see Tony. to go, Jeff, and Sorry congrats,

can the nameplates see positioned low maybe to in you've on elaborate you portfolio your Holiday from and opportunity ability year? approach So single-digit the also them that Tony, you cited the the the how next growth X maybe scale for drive

you could opportunity Adrian, think quarter outline how and gross just drivers about gross then to And best multiyear? margin margin fourth

question. expansion the Inc. Macy's, the of and gift-giving Cashmere, toys nameplates. customers X Beauty Macy's luxury. of excited This that Bluemercury nameplates, the the the the the Thanks, fashion Fragrance of of a see fine important Bloomingdale's about year, Macy's X we in of and expansion expansion to offer off-price celebration & upwards in The of XXXth anniversary in Macy's, gift we million assortments at improvement opportunity X at the most we're are excited points from about Pandora. jewelry Disney's of the of the in cosmetics our our all remain Between X assortments X speak with area with and Matt, of names Bluemercury. retail. million at We and We the for customers million at to power customers XX and range Bloomingdale's portfolio. price

Carousel new do New incredible the XXth in as assortment store future. the I entire Wonka At in Street be Connecticut, for the retailing online type an partnered upscale chain. well standard Canaan, expand beauty as we've our gift finally, our what with Bloomingdale's, And and in can product across Bluemercury, sets think, to

the that and growth to regard plenty across them. With early we're would our see about quarter we'll that group every on fourth innings in each the of and the but vectors, opportunity XXXX, more on of X talk call, remind I one we only

years fourth we you and the the first fourth around gross would thing the as of several most our we topic think we the work whether value lot the or of even outlook. is be encouraging as going experience. risk in shopping about the on this it And quarter the how Matt, margin is our margin, on assortment, into a in focus that's know, we've done of about gross that composition What's opportunities our improving reflected say think delivering our last quarter, inventory.

XXXX. So a down we the solid X% start fourth quarter position, inventory down year-over-year, to inventory XX% in

think that We We where what there's as Now of controlling of there's are we're control. in. lot pressure on recognize We perspective, to about a our we that we we're with uncertainty the environment margin, recognize that in kind is have we consumer that under operating pressure. can the but gross from regards recognize optionality. we discretionary,

ability We have to adjust. the

have We flexibility.

we we fourth next from think have target the about quarter about ending the fourth a feel good is quarter. As seasonally appropriate thing we year, that the to that transition the in

XXXX. XX% last to be flat to approximately but We year down expect to about

holiday We're very looking on margin. we're profitability focused very season. the So forward to gross on focused and

from is of TD coming Chen The next Cowen. Oliver question

what's And working Congratulations great on team, with Jeff. congrats It's you. been next.

consumer thoughts of across traffic sector love Adrian as happening many we there. on I and with Jeff the consumer, love thoughts, bumpy look positives what's also has would the your So pretty and been with would negatives health the and and the your

were do think ahead, And debt trends about of opportunity Have assortment with bad have less know as which the you ahead credit should then, expected. card Then as your seeing, expectations you're areas well? assumptions stabilized we the Tony, the those as greatest Adrian you about? and regarding that we higher are trends here? What delinquency you look rates assumptions product excited

Oliver.

talked with we've I consumers. about really, think the as it's

pressure, times, that is reading about. we've environment, There's baked monitoring loan We're that one geopolitical So are been that very same and same are. guidance. on some we've been with new really headwinds still number the uncertain some consumers the of obviously, additional on nothing in consumer The under many signals that. talking you is the is ones. the of clear that's issues. interest rate quarters. that rising for into Student all But last repayments, our dealing And

is cases, consumer the are, away that under shift expect and from to discretionary continue do experiences our in we into categories. They pressure. So some

serve, Tony talked the think when because and marketplace. the customers have with categories, getting or prowess about when categories lots But we in of our kind we're you look broad about more we at we're bandwidth, what of of off-price what earlier, luxury, building you

We're So going to where and is the that well. on do the that to liquidity big the opportunity is and margin enable is the trends really to really expect controlling gross had us jump and all inventory continue thing where -- obviously to now. We that. our controlling that well. right We're liquidity

of the trending a leadership of marketing, move And business power the answer it in your Beauty team, is adds exposure, to love Luxury Fragrance love the retailing we piece Macy's to this are The embrace the accentuates as is the move about to an I or we the And XXX shift that points to business categories. Fragrance customer department time and can about a we businesses categories. certainly year inventory, Oliver, presentation at while that good business the Bloomingdale's. the is the penetration that best. because move the move I the of going. job Bluemercury reality stores where store all do agility question have I or to web if

We INC its the also best talk with come, private community. the XXth of heard early about the want to brands. the in retail partner in out pleased confidence we in of there Reimagination, stages a Reimagination more to growth You've our but be of certainly and love the with market opportunities Street We're us brands. few first to On months,

flexible keep to go-get that Macy's, and nameplates. our brands be so customers we're to that have the Bluemercury of our going And each brands part these of products the financial models. from and We're that going we expect a expect or pursuing list be in X to Bloomingdale's of we will want

on card, just the QX as no to we outlook line however, credit credit about We and on earnings in our expectations. in expectations. regards our changes out our with close line of card. balance very our very spoke And last much the was much with for to And call year think about QX, with

a what's share As means think we'll this as that decision to Bureau's more what of just and fees about beyond. of those happening a into out remain on next with factors, And we perspective of XXXX as and number a the there's better other a year, we sense late on number unknowns there. get

The Roach from question of coming next Brooke is Goldman Sachs.

holiday next the weakens to driving how pull protect and provide then dollar your on And a your income that or a from you thoughts across these that to ago. updated cohorts? I if levers to months relative And of year you're thoughts what follow-up, Have discretionary conversion seeing been each changes and up we wanted your question any saw follow the in or traffic across consumer the for get further. demand on you on generation consumer Adrian, as outlook is about few strategy credit macro cohorts what can backdrop the season? EBITDA Oliver's profitability can there

the question. you, Brook, Thank for

point all remain consumer store, And remains multichannel have This is categories sites modern Coins in life. the year, the the inventory categories this period, off-price We for they There's different holiday challenged. stores X aged content doubt pressure. teams gift-giving a our of in to time we and interested in where assortment brackets. I cater discretionary sector our Hanukkah our the with content be the challenging. less there's yet nameplates. Gift prepared know no the year and income And customer in. are refreshed as where still and department come to a more and think discretionary happening and that multi-brand to the and a to the Giving certainly, way come across they your even Christmas, XX% the all answer luxury year multi-category, and ability normalization on under luxury is in the are I of about think a with

challenged to we luxury think believe brands However, is for capture opportunity each a even the of And environment I more Adrian? points our in in of there distribution. long term.

XXXX. in balance place more from management, healthy quarter and in in the sheet. scaling in We're really maintain growth our question vectors Brook, We're low now, investing and working our also expense growth to putting relates around next double-digit beginning inventory we're control. vectors more what good time. over year We Tony. it Thanks, we're in as XXXX. as management, and can operating we Right fourth to margin investing controlling single-digit EBITDA disciplines a committed remain low growth we move testing to to

the card this that As really with of not growth been of credit our EBITDA in pending quarter. additional to we on some levers, is released We're that is scaling double-digit late fundamentals primary ruling achieving about and seeing leaning stand we're around here track, the today remain We're credit low on call, revenues, the and development card in that's headwind fee inclusive but excited still has encouraged. we're what XXXX investments our into the intact. fourth why

from Ashley is of question coming Helgans The Jefferies. next

than to higher years? promotional the shopping we're just mentioned you flexibility expect guide? to respond of we And closer they ask embedding your start able To the holiday also, rates, gave consumer wanted quarter fourth for of to be in some couple pressure to to you about holiday kind cadence past the the expectations this I the you're environment. year do with curious on then guide know you to shop levels promotional have and in more what

first part of to question, part the Tony. throw the take and second your let Actually, me I'll

when look shopper of following the So -- really the clearly you our of are and week pace critical. week at the holiday next

but that in Customers think ] prior Friday the midst weekend. along of shifted Week Monday, is Friday. we resetting. with for low Cyber and has which that competitors. customers that go for very landscape into sites to the So there brick-and-mortar typical. last Sunday, you our to of We're about [ resetting before in so full for that really We're in a the with goes weekend sets for for Then where days. We're Friday, frame Black deals are a XX-day taking XX important that. pilgrimage terms is well to Friday up advantage to important. That's ready obviously, competitive time Cyber ready Christmas us. really are one in Cyber when thing or . And We're well that with Black Monday. Christmas And retailers of full a that really our that Black starting Black all is dropping a for

So simplified is of brands big all powerful our communicating that as you're X and as thing that focus I is going values -- to think see well the anticipated really assortments we we're on all really the across that. how

we So well are ready.

of, gives and us value advantage Christmas our isn't margin days that promotional. department described, known that isn't extra I'm the we I competitive again, of to Black season. is take a years into a to can haven't the fourth cycles. in guidance offer compelling would I And the Jeff's quarter range Friday comments to of said, Jeff XX holiday front store the and that benefit the handle and add That being these this, have strong of being and opportunity as the

Our website time. to prepared on is deliver

have the think Our and price have products of gift that compelling didn't a show points value degree as range guides we as I just well of year. last that newness nice got

from ISI. coming is of Michael Evercore question next The Binetti

forward low with the at us because small-format contributors you that's growth stores new contribution, true, to mind even on, between store for the look Tony, could to working productivity, that's of I just see through if would new coming but you that smaller you credit. high productive. know you But if guess, Adrian, a thing, -- we referencing have more Jeff, we the I line very store think level pleasure. revenue comps, congrats assuming helping on single-digit a excluding It's much net been sales next year, just clarify other retirement. the one I'm ahead. And sales you're

mentioned You closures. some store

the So are? some what little we should even about maybe just think contributions of a qualitatively,

And point next year of then gave you on the comments the curious qualitative to leverage about to some there. I'm as think Brook you ahead based SG&A

costs, You Obviously, sales negative lot lot guys deleverage point saying efficiency. this, magnitude this versus made out of year leverage comfortable can next slightly think slightly SG&A have scenarios the us feel there couple found SG&A scenarios are and But next year next that you maybe really in a of through has year. comps of a declines Is hustled a of you taken year? point. a through positive if help

little been Mike, our a earlier, pretty relates levers. consistent about of with growth Tony what of to is And our lot as a the it we've maturation and business bit growth, vectors. growth investments talked core those our and scaling in really

consumer this and and experience, So SG&A value for when assortment. get in a you you about about composition think think are health format about us just give focused to about to is stores, spoke always focus XXXX. XXXX confidence that it's good we we'll on growth certainly the discipline XXXX year, small think as us. leverage our of of our share top in you that different the continuing Those our to is the of $XXX shopping earnings year $XXX next $XXX that's million things growing business, capturability better all into about business. strengthen retail for the the We call. Expense channels, core earlier million in the QX a million

is really will important greater lean to what profile continuing lead time. over for EBITDA drive for the to we're us within opportunities And that's a double-digit So discipline business. into productivity expense us. to

from of Securities. coming Bob is question Guggenheim Drbul next The

pleasure please for basket? And for reduction Razai it down the are to expectations sequential with see tourist embedded traffic there digits. single Are Jeff, was a what the Just the Drbul. any to in Bob working the on Arian been low the wanted We've you any trending can that may, your hear I Adrian, improvement you. thoughts. you have units speak the Do is holidays? in average industry This units. consumer been hearing guidance? for if health, broader

Yes.

mid-single third As -- what up saw fourth was we sales units, down. in in AUR digits, quarter, think the was about we the

volume expect be to actually we our So obviously, would down. unit

-- we've under in As you discerning. consumer I we what about think most remains consumer. pressure, is the think No consumer spoken the think to the change is the consumer, and about importantly,

expect we We to challenged. continue be year, to consumer but next into that the extend to expect do

Let me take your tourism question.

QX. So was we when let's an stores when QX, about -- particularly Central see in did some you countries look uptick, the continues Latin benefited that levels. you look America, kind you talk about XXXX It Europe, just be to encouraging, kind of downtown of tourist at which think in at has domestically tourism our for international, fact of international. and below and international that of some destinations, And tailwind. balance be we've our we're anticipating But will overall X-plus in benefit metro cities year. tourism outperform our that -- did percent we're of being talked always will a that not a downtown the we that the flagships hopeful this the because business fleet these tourism about with meaningful

do uptick beyond we there. expect 'XX and an So in

from is Gordon The Grom Charles next coming of question Haskett.

as Greg provide is hoping off like was you or around even if just Chuck. weather student saw as any when you the This restarted? on loans I variability color country saw on could of Sommer warmer any the we the kicked quarter if in repayments pockets for

Yes. profit and was When on overall just than better I sales QX. common in It our expectations. said

than of monthly conversion. with we performed on We're kind That quarter not expectations. definitely So helped strategic the commenting our drive but were better promotions. overall the performance, us

to signals. be have commitment other are of that price really inventory to all and categories ready pleased respond providing And So And to customer we're critical. of going spoke I changing the and main holiday. building with flexibility we're curated we're is to across to and the strong the both for and that definitely customer our going assortment our as point points think the the Adrian to that value we quality confident be behavior to in customer to position is staying respond Tony that offering, our liquid

would a the a would I sweater saw And done was in just than And great liked, add a transitional quarter that products. selling. has to we the even where we weather have more little team work have warmer the

don't for one weather, to is gift-giving So accept but we to assortment take control of the our come we advantage and can the opportunities that's things diversify of we've self-purchase.

repayments, the we add closely. thing and also loans. variable would of outlook. to other really about student balance our I year well, specific into student reflected to in would impacts about pretty for student the But quarter, is your be it's we're XXXX get continuing a pretty the of think XXXX as due loan the only very outlook And the much but fourth as This difficult The question just incorporates payments. monitor consideration loan to that's it important we to determine the as

The next question Morgan is of Alex Straton coming Stanley. from

congrats Perfect. Jeff, a at with getting couple It's career great me. you. to work on And great Really for just Macy's. been a

earnings X weaker outlook half their as about ordering First, change highlighted share you're thinking even highlight quarter as outlet wondering, buys. orders. holiday. anything step into can trimmed from thinking I qualitative line ago just I'm time? think some this in that you front on there for Backstage reports that case Bloomie's there this book outperforming many wholesalers Or quarter. or well just about have some you you'd full banners been was inventory And the the their of and how has those citing Is latest how secondly, heading you're months partner sort as then order the

Bloomingdale's at because and question. feel Thanks, a There quarterly all the about isn't change for they've year performing good been long. business both Backstage Alex, outlets. the We

stores, both a that we I offering nameplates the customer. also in having the inside we're know our In value-conscious sector. think and customer these case of that Backstage full-line the it's Backstage, to And it an we consumer. have speaks of glad the of wall four

them in value, freestanding the look variety us necessarily quarter, to opportunity. for and gives Certainly, in we a fourth color them sell that as in size at have gifts you So and other it the breadth bringing store. and wouldn't

access think to Bloomingdale's, at a is conversely, price you're consumer, upswing. I is there that times I And is still on sensitive. the at think And providing that brand a

that point how customer the do bring at brand them time. and appropriate to full-price So we in ultimately over the to cater

about good both feel Bloomingdale's we and lower price. So Backstage

relationship, of great Just, concession or a there our I intend guess, second game. relationship, hybrid wholesale them orders is and the that where going to the objectives. your have we better I partner, say objective in a is orders, And are willingness doesn't be the partner And future as while appreciate what question, won't there. a adding And when partners consignment to talk mean we transparency. relationship. our I with and wholesale follow-up our out be part that to have to best do we with it found forecast about view zero-sum are it our try to we times don't canceling We to relationship

our commitment bases said, Adrian growth Bloomingdale's. need we're betting market low brand on the we wholesale the in in next year, single-digit to As is get which both partners means

The from Telsey of Telsey coming is Advisory next question Dana Group.

best of Jeff, And luck.

just real period like, opportunity look the about small-format a think and it? and the of Bloomingdale's the you a you what landscape but how half orders -- And envision or the mean short could opportunities all you think you've of thinking they as the margins? What term, stores some Macy's XXXX? you the half the estate Adrian, and think for do first it at As how of time for as on does near from ordering -- about the XXXX, small the you're about Tony side, do assortment does had of of obviously patterns, change the for in back cadence

Yes.

be the would your real estate me on Let the which of side. question, part first take

that's to unit, operate taking what's very look that? our The assets, and that closely. small-door So really and assets portfolio mall-based this of well obviously, digital the that assets Dana, value our And opportunity the format. that customers you're emerging what's with in we hearing particular a in in market, looking opportunity see is market really at the our from all monetization we as at a full our view serve us thing as

So look metro the in XX is Macy's when XX brand the you at of markets. top

to continue that look that. placed. we'll perspective, that individual we're always to units at opportunities expect do from and So There's well

we And think announced closures? Polaris [ what those. what Then when this 'XX. X that to doing doing. announced Very ] quarter of the open we we've Macy's in also So we're the you've the about heard strategy, closed the many We've is you by about when is side, how door small-door on format XX XX end intent to year. excited the opened Bloomie's of through fourth up of

week the major think start. last pleased markets Bloomie's just And hit in to to has metro a is say a a off if opening less the of milestone that, the number in great in So that Seattle by about in you country. and Bloomie's, substantially gotten Bloomie's we

be national categories in bring products So span in. with the omnichannel to create digital powerhouse to opportunities coupled in order, our but brands we that X of customers and and continue able points there to in really is that traffic level price

a let add, soft have for I And obviously, spot Bloomingdale's. me

I there's division. both in opportunity physically in off-price digitally, growth So small-format believe stores and our

margin. done We've to job, we be fraction having surgical mentioned, a country, a to how but of is productive highly I pricing in cover in that as we're the to portfolio the in going good Jeff we're think, into That the both as well now. Expect we the products sacrifice to continue As we of science in lean opportunity stores that also of mix sell. expand. expand going a too to that

the Remember, and at greater assortment our seen we at stages in categories visualization. visibility margin assortment the price, of look customer the to emphasize, of we more. charging for products through be Macy's. we for enjoyed expand that will We've competitive mistaken types just AUR to opportunities gets but through expand AUR and that sell. margin our our to the think we expansion I on want through mix having I order Bloomingdale's Sometimes will we're the early of new

about it. year? the it think Got as of ordering you for first the And patterns then half

'XX, say, balance The having. we're first of Dana, Tony that one have. not we patterns faster thing quarter I So is level emphasize the I to year. think up, at the seasonless units which we assortments ran weather cold looking back we of want than were that transition commenting I in next when content we're the brought ordering of But would on out of our what should was

call. quarter for receipt getting so country. on parts right right of warmer commented And of quarter, weather the in the units in comes the the we that all categories, transitional cold with our that Obviously, carrying the level fourth categories, about first

call think team has I content year, where for -- XXXX a detail. that tailwind tuned and that orders, the should the the be the we time terms good rest job the quarter done into of that in fourth a nice for stay will this on going us of review of all

The Deutsche next from of is Bank. Gaby coming Carbone question

Congratulations, Jeff.

on as you a you I So gross the have into levers this the potential that look additional in wondering bit, you touched just for dig but was improvement can if to year. margin rate you next

that helpful. If you the could maybe there, walk biggest be buckets would us through

having than our inventory our has margin And markdowns been us to with a will that expansion though few comment helpful it's out, year, prepandemic. management. discipline margin away we the as one not go that on I'll on discipline for gross for pointed a pricing us. focus Tony science, Even of in had So less is very next on outlook haven't what the terms we big our shared things. discipline

So will to us. continue strength a that for be

margin, our flow increase about, how that our going talked Tony increase are we're other to As reduce other opportunities there delivery ultimately are our There initiatives discipline our are opportunities that have and that about delivery channels. just around margin there of a expense. our we around in manage expense so those mix, after number capital of retail balance solid managing goods we with all sell-through velocity assortment and the making our discipline on while working gross of and it unit sheet starts inventory good and then but choices

is America. Hutchinson The next of Lorraine question Bank coming from of

million you growth was a XXXX reinvestment I $XXX great managing $XXX much could expense cost little of structure. million for of the the that in that of how your Adrian, bit on done slated is You've job savings, vectors? just a hoping elaborate to

to The and reality value are focused there been Lorraine. good what fundamentally, that we've from the a is puts management. takes. It's very But question, incremental be going expense on is

about reductions, balance our the showing we year about of for from the X/X expense coming is and in growth. expense profitable As SG&A it is think fundamental the but around next focus of gross margin really composition up it of is

our line. order in so accelerate investments we're And in vectors growth making top the to

the of a all starting that's earlier on But our are about little big investments have is I bit back of in quarter. the a that been. so And spoke to going incrementality investments where top some fourth line. part investments those those

The of JJK coming from Janet Research. [ next question Joseph ] is

a fiscal gross I what if wishing coming those that 'XX those XXth I'm answered savings, might from on side SG&A savings the wondering year. how if been better was really I could INC. label. And the pull push I'm in excited that wondering know Lorraine's impact influence Jeff. little be of achieved you, 'XX which to influence year, like how of we margin label in there's was just the 'XX. And as the wondering in forward they in was you've and all how than I and On wondering about just best. late better-than-expected opportunity influence -- cost there fiscal to some fiscal for question. some evolution And margin Adrian, early have next the could talk private about this positive private you guys expected. of bit just Congratulations you here the if you outperformance it's I that, on impact asking efficiencies just I'm look understand, be that to too but I I forward the 'XX

question. you, Thank the Appreciate Jane.

a INC we're in excited, First, and couple having the been have XXth the of Private brands, believer come private Macy's refresh some private over and and known heritage On brands to next brand. of wonderful brand has certainly brands. for years. best the over performance of in I'm a huge Macy's the what's years the of about the

commitment refresh the strategy. private true of influence brand gives think the private and in portfolio to confidence product entirety with our opportunities exclusive of space customer team white brand I me the focus design, our on

comes buying want little market but think carefully you're opportunity Bloomingdale's sure we're private ourselves available, what to margin is more we're vector. flexibility right, and Park. the with and as when adding we success love from the this Aqua brands Private make want brands too we we exclusivity best the private opportunity, because both brands, that and make balance trade can the scale always is we well. to Again, are sure when Hudson Macy's margin and brands you that and a brands leave I market of that expect watch That's are natural brands. and makes particular important there growth compelling to the we margin And that to to have liquidity both in appropriate for you that Bloomingdale's us right

again we think for profitable growth over question. requires When SG&A leverage. thanks Janet, about that your time,

within lot they sustainable about around so and And they we that have be automation. think be The to efficiencies, when business is simplification to time. talk cost thesis the over recurring have and we a our about

which out business really in complexity, take the to lean over ways simplify processes growth. The so what sense. strength all of our our makes of into So automation to will simplification an headwinds the based is the core continuing new are placing business, put we're for looking where our at we is foundation remove on working, it of the

So achieving that's over leverage. the our how SG&A ambition approaching over we're time time with efficiencies cost of

I Spring session. of for to turn the That closing floor question-and-answer to like end back the over brings would us to Mr. the Tony comments.

third holidays, to us us Thanksgiving, a at watching opportunity this wish next want you'll everybody, joining in Thanksgiving week. We Parade quarter on and you and very call today. joining join families happy Thanks us person Day in for to all take the hope Happy everyone. your we the work,

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

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