Macy's (M) 21 Aug 242025 Q2 Earnings call transcript

Greetings, and welcome to Macy's Inc.

Second Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Pamela Quintiliano, Vice President of Investor Relations. Thank you. ahead. go Please

and XXXX. Good posted With operator. Spring, and for a our thanks Chairman quarter our Thank press the our comparisons being today's webcast. Unless during expectations, section XXXX on our we will morning, guidance the information Investors provide live us. release, refer of COO Mitchell, Adrian to me call, CEO; has Tony website, May Along call joining provided with displayed macysinc.com, and otherwise All be second or outlook been on versus noted, you, presentation noted. and everyone, CFO. prior on XX today and the our are references unless is to otherwise earnings our

comp comparable remarks to sales today's addition, our sales marketplace plus noted. all owned licensed owned locations, sales represent plus and licensed store for references prepared throughout otherwise plus unless In

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

others well can the these You as financial section as on regarding of find additional website. information Investors measures our non-GAAP

on the of be approximately after available being conclusion is will webcast call. X call website. our replay A Today's this hours

over it turn I'll that, Tony. With to

our as distribution my I'd our everyone. partners. well centers sincere like and good appreciation and by Pam, colleagues Thanks, expressing to trusted as corporate morning, stores, for start

earnings customer ongoing strategy. and long-term better-than-expected Bold empowered to meaningful commitment our us and New make progress to Chapter our achieve to results on goals Your our

to view the which nameplate. We by First These XX a continue quarter. at our we delivered the growth as growth, indicator gain and sales go-forward comp for comp encouraged of our the our stores sales Macy's basis to achieve ability be the X% for leading stores, performance ultimately,

our the we expansion to strong breadth offering continue Bluemercury, we price aspirational to merchandise delivered SG&A across luxury investments. Bloomingdale's and our as and fund points gross luxury At of resonate, continue better-than-expected nameplates, and our growth margin to

spend consumer reflecting I share New an our pillar the Chapter with each a to detailed stable, I We quarter discretionary entered like more on but would the remain update Bold choiceful resilient Before discretionary a second strategy, would briefly touch of consumer. environment. that expectation on

quarter the more cycle. discriminating, As progressed, and an increasingly new our to customer which uncertainty macroeconomic complex became attribute we ongoing

further took trends We protect our SG&A. and did expectations, profitable we As from control proactive gross not diverge margins still. steps to sales, our drive stand

As $X.X a of second above. below slightly well were was EPS our billion result, quarter while adjusted $X.XX outlook, sales of

personalized messages exposure At to fashion. and was balance reducing and consumer delivered our invested in more by Macy's, we newness across softer We demand. the our assortments And better categories aligned enhanced promotions while shifted proven targeted we strength, shift marketing value areas to which the behavior, impacted of calendar areas and our and our product most and of brands. in

and and of applying areas opportunity. speaks to course These actions while second identify ability of recent and analyze learnings and incrementally quarter, our the the control environment, shifted we late thoughtfully which encouraging are we the them. And cannot quickly is our business taking results external in to

navigate remain we our Chapter the the strategy. of New execution on landscape, As our focused current teams Bold

sales declined the were and don't But full nameplate, Macy's comparable quarter Turning X.X% sales second tell to story. those the first pillar, X.X%. strengthening down the net numbers

Karan, Donna green quarter, shoots strength to apparel, ongoing Steve Madden, French name experienced a and Macy's and fragrances in few. women's the [indiscernible] During including in Connection ready-to-wear

our ongoing Customers fashion the well reimagination, private including in quality and responded elevated to ready-wear labels. heritage brand also

closely last private exits, customer lap more and we demand. with year's As private brand align introducing new we been that brands have market

on a In are top is men's momentum handbags build are the growth. and appropriate weaknesses this in the important to the the and to same making At Continuing addressing category we also time, investments new we spot, support apparel, men's category. priority, apparel, in contemporary Earlier has home. aspirations. opportunity for this we growth launched an targeting growth month, under believe support soft our XX the this consumer been a and a private bright brand in we to there's

Karl portfolio. And our in Lauren we brand our ahead and are brand been strengthening see new to Home, to holiday strong Handbags, next demand well year. we are Coach's assortment. Lauren by are have assortment we continuing of gift-giving Ralph continuing our Lagerfeld product private reimagination broad Within diversify for and received,

stores. Moving from product to

First mentioned, XX gain. posting the their of achieved previously As quarter a X% positive second consecutive comps,

with between widened last nameplate First comps First basis the the and XXX performance to points compared Macy's the by the basis total For XXX in outperforming the XX quarter, the nameplate total points quarter. XX disparity Macy's

offerings locations activations presentations gain experience and by variety fitting store departments in and adding staffing and well include: as relevance Initiatives with as key existing visual to redundancy to on unique community rather and focused brands, and than continue such modernizing room new our traction editing at freshness, inspiration handbags, as shoes, and level offering events. emphasize through assortment these focus a customer checkout; enhancing Improving ready-to-wear the merchandise

improvements locations. of Scores neat well improvement. higher relative locations XX easy men's checkout above Promoter and merchandise handbags, and registering and in And First all with stores. and other outperformed were growing. as points over quick the points Net ready-to-wear, traffic shoes, conversion year satisfaction XXX basis had categories last and to customer also salespeople, most go-forward kids locations women's basis XXX availability than other is with and apparel These clean better go-forward as

and men's relative and were handbags, could the as more To struggling serve unlock. significant most a broadly, broader exciting pause that, which categories two been is where on among we've outperformers,

XX designed And pleased initiatives will and to These tests women's quarters to created have future fall. socioeconomic outperformance, eye X are comp First announce valuable replicated. consecutive go-forward an our were The staffing insights that toward cross-functional and are further additional provide initiatives. tests representation Locations shoe and locations be of we are be handbag geographic as expansion. this with the diverse roughly and meaningful implementing and refine we that we XXX will with used

another important of locations. Beyond our the Macy's closing nameplate and the non-go-forward strengthening XX, First XXX monetizing is element

locations locations adjusted basis points. As a reminder, outperformed in roughly non-go-forward fiscal by outperformed points XXX rate basis XXX sales of by Macy's the go-forward four-wall approximately XXXX, EBITDA comp and

to While are relative non-go-forward are assets. fleet, total underperformers they locations Macy's estate the valuable real

Demand been these properties has for strong.

now making deal this We are the pace pleased XX stores the expect roughly quality approximately close versus to and with prior expectations year of and XX. of

and presented debt evaluate balance XXXX, us. opportunities it a our is deal sheet, not no We will material thoughtfully given continue But we maturities until accretive. unless to to strong that have all we will execute

pulling calendars mindset, we have have been and while has areas and that about messaging compelling back soft, consumer protecting buys, adjusted As Reflecting where are composition to we reacting promotional we the product, demand in at value of momentum. real-time environment. nameplate, experiences the increasingly the future the Macy's relevant business marketing where a depth regardless and to offer of the and back-half of think committed we to and reading

to to our endless partnering customers and our We're that marketplace wants not our closely evolving owned, with consignment, an our serve the best concession, products, vendors aisle. aisle, better understanding through customer see just

site engine search digital, we and focused optimization, pricing experience. are in enhancements, mobile on And a better more transparent

contemporary brands, for pillar The Venus which the Rio. collaboration, Alice second very and over net brand. Williams of promoter responded Olivia, well Bloomingdale's, Olympics mid-June the and Turning advanced improved of and of Veronica scores sales Beard, and received. is launched XXX in were comp the to remain quarter, basis just to L'AGENCE X.X%. luxury, year-over-year net Customers sales the strategy. was and down this AQUA points ahead our including strength FARM X.X% Wimbledon were which At down well market And

and New to accessories, locations will customers products XX the Looking over off food, brings kick York brands long have of that the activation, celebration shops, Fashion and installations And All new on its experience XXX home. ahead Week exclusive few Bloomingdale's immersive throughout and the art best a across with flagship Italy in next X-month fine Bloomingdale's with and through the will apparel, pop-ups host floor. a music. beauty every our will jewelry, XXth Street weeks,

Parfums and growth, At an of Marly. differentiated fragrances store posting a XXth consecutive comp the Customers sales opportunity including with sales X% of Dr. launches well we with to Diamonds expand continue to Metacine. gain growing achieved recent like new brands And respond skincare X.X%. net Bluemercury, Creed offerings, we see to our quarter de

During Bluemercury the remodeled one opened and quarter, another. store new

team Bluemercury and continue model, to remodeled outperforming establish as in elevating XXth year. fleet. each off the celebration, anniversary are the store, product which well and total New our and its care. With the Bluemercury spa professional few remainder is to a integration mix curation just run locations service authority skin will received its the be further of And in will kick weeks, throughout new

the and potential. long-term its in luxury category We are confident

Bluemercury will merchandise capture our of share. and and pressures, allow not provides that market to immune broader are compelling us Although brand the variety options the from Bloomingdale's private offerings wallet macro

launches heritage and through our new we events. evolves, environment leverage exciting brands, the expanded As will storytelling and continue partnerships to strong

our improving our more the steadfast and and business. pillar growth cost including strategy, Bold improving more our fundamentals and shortly, of reducing New strategy fostering final modernizing closing, is fund generating go confidence commitment simplifying in will within in disciplined organization. In Regarding work the and savings an our are complexity productivity into of simplifying end-to-end we unwavering, are our fulfillment operations, technology Adrian but network our is this to Chapter to organizational the we pillar, investments. ecosystem detail even

and understand merchant is a at of science. As a I'm balance heart, art that I retailing

our team, As across results to listening improve organization. actively to our the we a are customers

We as XXXX transition continue to year. investment and a view

progress energized pleased the ahead. profile, are clear-eyed we're lie the we by opportunities yet the about recent strategy on our that and profitability While with challenges,

taking results. will the benefit New and will we We win Chapter from sales we pillars Bold longer-term growth, to three we will are not our confident but deviate sustainable all across customer, and to profitable competitive the near that path actions are remain

Adrian remarks. for over me turn his With to let it that,

Thank good morning, you, everyone. Tony, and

we navigated controlling We our margin the As better-than-expected SG&A, delivered as continued margin throughout to to quarter. reach the and we gross what and second our strong we disciplines our on is focus within managed drive expense diligently business. quarter,

making our are third on progress pillar, our Chapter Bold and operations. simplifying modernizing teams New also end-to-end strategy, Our including

have investments and and areas experience such benefit higher savings which contributing far, cash flow in investments make programs improved product execution. performance bottom delivery are faster capital customer Thus automation into We the should leaning online in-stocks, strong as and as generation. simplification, targeted these line working we cost disciplines, process day-to-day and while to through

our Now second to quarter let's results. turn

a comparable reminder, stated. all to period the year-ago unless comparisons As are otherwise

During EPS to achieve quarter asset with us effective Tony sale above the quarter, margin expense gain. expectations, second of expansion on and focused we was without described the the management. actions even the This, allows combined earlier, our gross adjusted that significantly benefit

$X.X defined total net X.X%. Macy's declined as down Overall, were plus X%. were comps business Macy's, enterprise Inc. digital down locations, comps and total Bloomingdale's that, sales Inc. Bluemercury Within go-forward and Macy's go-forward X.X% billion,

which locations net Macy's X.X%. comps, go-forward comps include were X.X%. Macy's and digital, Macy's all By of X.X% and go-forward were were nameplate, all down XXX digital nameplate down and down locations sales, business inclusive

additional X.X% up remain a non-go-forward and which encouraged by Looking XXX the go-forward of reflected discuss X%, for handbags impact in First changes locations will go-forward also of just another fall. this locations all our staffing in down I all our shoes We're current down excited comps locations with these stores, First rollout to the The and are down and were outlook, location X.X% at performance. X.X%. We moment. XX XX

and X%, additional market believe down comps the Bloomingdale's to take these confident net luxury Turning us while of respectively. Bluemercury and in share. X.X% rose were luxury. our sales and well to two initiative and comps up X.X%, sets X.X% future We're sales net nameplates were down

to Moving $XXX million. Net to rose our to revenues were Net expectations. other credit were line revenues, up credit with card which losses $X or X.X% X% million. in $XXX million

credit card negatively net the revenues XXXX, by As change of impacted credit second in in a reminder, a were loss trends. quarter

counts. are by to new Our or Network driven pleased year-over-year remains campaign holders, among and have X credit of while consecutive revenue current million card to million, acquiring achieved rose advertiser higher and strengthen new we priority XX.X% application usage quarters cardholders, $XX growth. Macy's card Media $X to

and given margin cost the recent gross inventory, conversion that discussing are accounting. both directly not it the is year, Before to to important note to prior comparable

than and accounting. was by better asset quarter discounting, the Merchandise XX.X%, lower basis work due by margin expectation. than last higher XXX year-over-year points the driven our company's improvements Second and cost shortage gross partially to rate to company's were protection margin year shift favorable

delivery and sales to that volume due decision to improved of approximately is results year-over-year, half increase cost initiatives. End-of-quarter for quarter due the year. We the expense addition, ongoing benefited expectations accounting. the the to In lower expense second in up savings and and reengineering cost to X% above our the product shift invest areas back half reflecting estimate were strength of was inventories sales control, from shipped process which of

inventory. SG&A our a better of $X will ahead, expense than our quantity disciplined continue billion were revenue the of as XX.X% expectations. dollars of composition we total to remain percent Looking or about and

customer-facing cost in million up teams XX due lower expense percent SG&A seeing to lower tangible First particularly and points volume. sales controls, Our where pursued basis locations. while last returns, total to revenue was investments as Compared we're a of XXX year, protecting $X

EPS well our rate $X.XX, to above controls. year-over-year For of year, reflecting quarter, an to $X.XX $X.XX delivered last improved $X.XX compared we of margin expense and the second gross strong and adjusted outlook

an benefited gain addition, EPS $X.XX. sale asset In by non-go-forward earlier-than-expected

our while liquidity, to credit activities we of we cash our half may operating head of flow $XXX was navigate in $XX into support ability asset-based capital as facility potential million, We Free paid million any $XXX million, totaled $XXX uncertainty from dividends. million. our was back Cash year. the outflow that healthy an believe including arise, expenditures the cash and

with but the We're committed Regarding value. monetizing and pleased date real estate at landlords the with centers, monetization, only we we've distribution to are to assets developers. and traction these experienced right certain

the by estate progress seasoned is making. encouraged team are our We real that

recent year expected of of closures proud conversation our As conclude teams. our store noted increased earlier, results, approximately XX. To we the number locations on roughly have XX this to from I'm

environment opportunities performance, challenging, bottom our the make on that discipline. found while our more became New Chapter supported As executed Bold strategy. we We with efficiencies and continuing to progress line

and year operations and everything the consumer, quarter know our full our reflects about today. as we third Our goals outlook of

remainder the agility year, protect navigate the we operational we leverage As of our to execution will and disciplines our profitability.

assumptions, Before a few discussing our third and reminders. full quarter year

our discriminating more expectations. ongoing prior our relative the heightened room in outlook discretionary First, range to and our us gives promotional consumer a the uncertainty address environment assumes consumer to We believe market.

late any have Second, regulation. we not included impact from the CFPB fee potential

to to investment cost Third, and and the balances. year continues the this and Inc. XXXX noted, conversion to earlier continues outlook Macy's a for previously margin comparable not directly be to prior accounting transition And inventory are year gross year, lastly, for reflect as

everything we and as We will iterate Not will appropriate. we what continue pilot new does, work, find evaluate, ideas. scale as to but will

reduced prior and sales expectations are environment. now we our of more quarter The fiscal results billion. drivers expect to relative a for net outlook sales challenging XXXX, approximately second that, of $XX.X With $XX.X primary billion sales to

we of Macy's Macy's For down to be be now X.X% luxury inclusive up non-go-forward assume to go-forward and and digital X%. flat, locations collectively nameplates our up year, X.X% X% be the to down and to to comps nameplate digital Inc. with locations X.X% to down full

million. $XXX shortage percent to second card million for XX% million expectation $XXX reflecting credit Other offset sales million, primarily $XXX revenue sales to of Gross partially a of by landscape, and $XXX benefit. revenues net of heightened a as our including of mix quarter promotional to margin XX.X%

of SG&A XX.X% revenue total percent of XX.X%. as a to

and areas. while New in effectiveness initiatives, Chapter invest prioritizing sales to driving noncustomer-facing and continue Bold will in longer-term efficiency efforts near-term We

approximately million. with of gains roughly million $XXX related proceeds sale of sales Asset $XXX

on on quarter for quarter. have annual second We expectation the our based monetization progress including we upwardly and are our updated outlook making making, the monetization deal the third revised

Adjusted income. EBITDA $XXX revenue expense X.X% interest million of of to total as expected Interest higher a percent X%. to due of

diluted our EPS adjusted our margin controls. enhancing to gross of $X.XX, expense maintaining to are exercising $X.XX We annual and commitment outlook reflecting

sales Our a to offset our and promotional we additional higher spend than beat to from $XXX be slightly assumptions of investments. growth volume about lower as landscape. pursue $XXX by quarter heightened are favorable prior headwinds million, expense second and million interest outlook, expected Capital

the million $X.XX versus billion For are $X.X sales net to $XXX on margin be a mid-single Other be expected revenues inventories be reported including to last rate digits to up credit projected approximately to are year, end-of-quarter of revenues XX.X% third quarter, roughly basis. billion. and to XX.X% card Gross million. $XXX approximately

Entering the we newness. seeing and under ocean in of healthy the constrained are of ongoing to with mitigation flows pleased We're positioned. strategies and inventories our place times well and have third inventory and the capacity. container inventory level elevated transit is control, Aged quarter, are quantity also composition offset

quarter expect meaningful the to third season without and ultimately end liabilities. inventory We any fall the

a $X.XX, million of expect of Finally, loss we adjusted diluted of the earnings monetization roughly assets. asset non-go-forward assumption gain EPS to for sale including of a $XX $X.XX

closing, remain strong New can cash In initiatives, Chapter on executing discipline, controlling includes Bold inventory focused management execution. control. and savings operational strategy what relentlessly our we we cost and This

With back that, I'll now Tony. pass it to

our business of have unique Thank team of we a business Chapter the our on in the innovative new being you, in we're excite I and Adrian. the and through our pleased customer, ways We as is being New a and to I'm everyday people. passion iconic making for understand strategy. progress serve share My finding that retail and with advantage as events interactions. well the Bold

long-term profitable and between delivering and connected to are company to sales returning experience and to more growth. better, listening our are We a committed customers, customer balance that improved science product finding the art while

ready for operator, With we questions. that, are

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

progressed, elaborate cited speak relative comps, you early and performance? quarter cadence could you to trends, the in just second consumer maybe quarter what the changes as with or to that on the you've seen Tony, backdrop second back-to-school August of So comp the

walk drivers the if just think despite of heightened that Adrian, would could expansion, back-half then, through be you And embedding great. promotional backdrop, gross margin I

The to on, that Thanks, team improving Matt, that than strengthening softer the expected. were obviously we middle quarter the focused an of quarter things I third the saw products the in marketing, no back It on that say the necessary We to we third the not took softer quarter impact. quality action, working. that longer immediately And comment quarter the of we're sales, were talk sure good to going played you. quarter. I'm back And we making showing receipts to on get are the the into started flowing out and cutting in in were will made while changes well. immediate as second

guidance, conservative appropriate, prudent same the outlook time, allowing more is year both think, our the that and discriminating. reaffirm is I consumer the the that us the fact of us gives to EPS that acknowledge remainder the guidance and our And for at year for

in I traffic to rest barometer seeing on in seeing categories stores it did customer and the that that announce it handbags opportunity that we're outperformed do scores, in fact service going we're the all the think a conversion. XXX more the the and nameplate, the that We changes us it shoes. learn of First fact test The we're line, continue for forward. top seeing better we're both on the XX, adding First staffing great in apply to XX and the serve to making as to stores that we're

a prepared the Adrian? strategy that we we a the need model as go-forward Macy's we're think brand. from we but for use learn little that longer have to to just So

a speak me little to margin. gross Let bit

the pleased we're for just QX that that the gives as ago. to have And moments we our XX% sufficient year we results. flexibility few we're to in the horizon. range we spoke with for that a margin certainly may know about year, of confident The the as you to our So respond quite be on us XX.X%, outlook gross believe, uncertainty

we there balance season, the as outlook about things fall our think -- really on. and margin for that we're the plan we three gross of as are year focused the Now

that control. familiar at point out We feel already quarter, is appropriate the around of have took given actions and we we've for are with. sales softer this we in the the QX And the we do adjustments leaning things made that of some kinds inventories. the first inventories The that we're quarter, And into things coming had QX. under you're and second

We have already good disciplines place. and in good controls

moment are given and flow, pleased in aged We're inventories container under availability because have of At chain around our well this healthy season, of a the a bit supply with newness control. approaching mentioned now delays. I and the constraints earlier we're holiday some time, level the we

are well. couple for important But a of other that there as things are us

last shortage our we into this the being trends. one working. the at seem shortage year year than we've lower to and they're quarter second second the be in end from made initiatives with We team protection as benefited The investments asset that expected, the beginning of of pursuing

So we're very pleased with that.

The last piece is costs. lower delivery

We to compromising our who have levels. diversify without lower service actually continue rates carriers,

enabled that downstream be recognize costly of important which also can fulfillment, split to us upstream the balance We us. for has quite which it's have shipments, right to minimize versus

So deliver of lower expect also shortage the outlook to think trends costs, encouraged delivery the the inventory what quarter. and in third discipline, we as by by encouraged about year we we're balance our for and

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

factors you rollout you're these for from these the First select tailwinds initiatives this potential hoping aggressively that XX tests First to was the -- then looking help magnitude bigger of I more picture, XX could to fleet? Tony, of rest the that the you allow the staffing And you to will key fall. frame locations broader of the see expand

for calendar Adrian, to year? balance for perhaps promotion is and you then that elaborate can the on making the Macy's of the its adjustments marketing And

to you. Brooke. to Thanks, talk Good

XX comp points It's we a Macy's. basis about I rest growth, to NPS, excited that we or of F clear if. quarters question basis of And clearly, points XXX the when, haven't store enough. improvement it's not XX. of First make XX. X of consecutive will made the expand First If XXX are want improvement We of It's in versus

quarter did what I it test year many service-oriented you families that think call, on fourth level said ample sign ahead further next will those it the before positive mean I on think elaborate and we a And on particular went business stores and as but we've confidence can we handbags how can staffing on shoes, of the that to a business. of the in we the XXX-store as have on provide view

the In magnitude, incorporated our terms into guidance. of it's

think on our possibly future. continuing the levers I our of as range use without gives we performance. can able improve to success. going at the tripping example be in us be to to know, the I what as guidance look But to those Macy's we as the be And First to to can our XX fast please way best move are

So a positives. false in sure lot I'm got public careful there environment We right not noise now. about that just are of the making

Let's causation correlation. we Adrian? what's make versus sure understand

To really on your are consumer a and we question operating about the that's there adjustments marketing, oriented on, on value. context promotions is that the

as marketing our of made the that with some which we're we're QX. And we've referenced, on media so things the is since business, doing that the by been mix, changes experiments we've seeing those Tony encouraged from experimenting very

stores we the website that up our in We've and communicated customer our when recognize our also in messages, well. been on calendar promotional other as are matter there around clear that or value our value very dimensions but shows on

have visual that us. amplifying when the strong visit customer that's to colleagues having that the that's presentation, having a sure our they we're available, stores, good And available we value within experience making

actually sharper adjustments consumer we're of to centered making, that kinds are with messaging they're really the the those value on visiting that So around day every but all us.

next Jefferies. question is of The coming Ashley from Helgans

Bob question Guggenheim. from Drbul coming The of next is

questions couple Just of me. a for

handbags that acceleration? Just just really lead and if side, seeing merchandising to what the are comment. in On wondering you could you shoes

category. been tougher that's think I a

So some of be the would changes that helpful. you're seeing

half the and When in And of brands on look happening a of back that year? called what's in women's. the similar women's the question trends that in you those sort some see out, to the of at legs you trends you of just any

for Bob, question. Thanks, the Sure.

We are shoots ready-to-wear. in seeing green

Lagerfeld, L'AGENCE So Beard. that's Donna Veronica and or and terms why Karan or or those examples citing Karl and Olivia we're in [indiscernible] Alice of Bloomingdale's

are whether denim after of wide We business want we improved fact that's to the apparel a both and that at are in silhouette change taking go cycle, brands. fabrications, we advantage bottom, or in an the or

In terms we stores to have And of the of We I difference would categories, we know were shoes, which ingredient. an merchandise those magnitude us. disparate XX been F pleased two is tougher see in the in handbags know the is for and say or ingredient. our staffing an

go So two after more categories. in stores we're those pleased to XXX

And a we to customer we're doesn't where very brand selection to us for always conducive their at. lean it's department by and a the environment, brands, assortment is know that shoes a in think variety and store chance wants points into price and of size something that particularly good

to brands end like starting of tunnel light cited particularly fact we're the of been see on the COACH some by Lauren good Ralph the and we handbags, lately. Lauren and at that case Lagerfeld I in has the business think, And Karl the

to the going cautiously business in our optimistic So of the are that help those quality fall. tests improve

Adrian, I credit the for can us? on could color trends can little the business, on And in of . some delinquencies? within that that you're expand you seeing sort a expected, a you bit the cardholders you ask and follow-up. more put but a more just card said of as I if think

Absolutely, Bob.

rates, credit is net are slightly losses payment I our necessarily very our expectations. in that much as there are lower translating were which What we seeing So into not is and earlier, debt. mentioned line bad with delinquencies,

bit been allowed what's paying . They're certainly bit a we're has longer, is customer the little off. paying that our in net cycle than revenue seeing effectively in balances but happening have their So balances that is bills fit on revolving a that by in us delinquencies to expected and line what forecast. better with And we credit really revenue our with little losses driven a higher expectations.

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

them As and the Backstage, you thinking outlets relative formats, whether for did the and smaller think about some about they it's how format, half? of your how core perform digital, to back the other Macy's you're

And think second. it first then in which gains on Drivers in quarter, you're up and forward? X% following just the going the up up of X.X% thinking about AUR I was AUR, how

you tweaked the Or Bloomingdale's in are of What investment Italy it? up? growth CapEx. up those lately, that's about you are how just thinking it for And Is by coming initiatives? some

talk Dana, you. to good to

talk accomplish six I opening portfolios the We format. big a we're of what in first Let's about think part opened to spring. small it's trying Macy's because with

and digital which have our We opening We more six us business. XX obviously fall, stores. brings that have to we're have we XX the First initiative in the

what the on be to stores, is win what by geography is win to business and And And stores to of the by and we complement right about focused see customer by digital format mall succeed trying market. market able on more small us talking have is what great the market. you'll

like it's into all your So child. These not choosing ecosystem. fit favorite our

We on-mall have invest stores, a digital business. healthy off-mall stores to have the and best

by the AUR The with quality promotion. of we've improving seen not consistent increase product, is more, what from back pulling our not charging

to our conversion single-digit continue So improve to growth, and -- on our the AUR site. in and stores expect I we see as try would continue to on low to traffic our

site we quality challenged the been our presentation single the doing we're improve The we stores can on in is area and both have everything the conversion. that And to with biggest conversion. on

conversion First I XX. mentioned and the our on think Adrian traffic both in call, stronger were

managing do. sure bottom both add? appropriately to and need I anything the top we just react we're what We line. line that have we the know Adrian, and to So to make think

what experiencing value allocation. balance But investment, we're with you is capital allocation on of very investors. the We're disciplined increase sheet, dimension year. to maintaining To healthy really know capital very your in this question that focused for excess capital on a returning you're slight cash spend second a on our capital

high-return going in investments in We're investing be to business. the

we're of our is some what working. example, like For be enhancements XX F seeing in in to stores that visual areas private brands, seem our the

So that. into we lean want to

is neat want in around Some in stores clean, the of network the we F actually a general that appropriately around good is of broader the these as XX as so and the in well stores make that to scores experience the we're biggest making improvement our but maintenance sure the there for changes, the customer. store the where invested upkeep that store, of is

around opportunities digital. see some We

And as so into been piece leaning we've well. that

So thoughtful us help also will and surgical experience growth. deliver really better investments a deliver about those being and very that

this so investments of really to into taking lean And we're some those the year. opportunity

Helgans question The of Ashley is coming next from Jefferies.

earlier. sales about to is ask second Blake the implied the Wanted on Apologies on Ashley. for This for guide half.

terms In consumer assumptions, becomes reflected that is the the you stable kind consumer more guide? increasingly challenged? is in of or of your How assuming are

for us in also on at And for you Adrian cost all QX is on also, that much last margin? a comp color full And for Adrian, sales, how for was one provide the embedded year accounting, on that? then did the gross

Absolutely.

to Blake, with great So be you.

When our get a sales me just it and you about uncertainty an spending operate both to address started. we think year, the categories for range QX gives little discretionary us bit in. Let to talk that the about sales for and opportunity the

the in about been And back we're so what earlier, half. Tony as and cautious mentioned bit seeing thoughtful a very we've

the XX to, couple F in fleet. the Macy's First of seeing outperform fall. to encouraged that additional performance spoke XX an the time, At gains expect shoes a same of that locations enough our the to around Tony real XXX this just we locations expand locations handbags and changes to in terms are We're we broader

a We're digital investments continuing engine to site mix. our search around better optimization, make mobile business in enhancements,

discretionary a green to things context we we're we spend. of but of leaning shoots also recognize a we we're have number again, that regards uncertainty that in that see into, So with

performance way cost from adjustments an the as outlook would the overall QX, not more are from not for retail basis, to to is the but that transition annual go that throughout detail is accounting way. expect for a bit be the in you I On we best bit track our As year. about you the the year would of cost accounting best but at the year. We That's about it's to the year. some little a our it the provided year, think for really again, material chunky look going to material accounting, this way think

thinking ranges we're about the able line, how to outcomes. be on that given margin the line, the quarter, bottom looking those And XX.X% regards gross at in on on we with third to XX.X%. we margin, top to And to navigate should feel gross about we're

Lejuez Paul from coming Citi. is question next of The

income It's Tracy you overall. about if as and any particularly wondering by demographic, the out income for if I Kogan could talk weakness we Paul. saw that in you different the quarter filling was performance was by saw wondering I played differences cohorts?

the Thanks the being consistent quarter softer for all think second of that first than the of quarter. there our was terms reaction question, nameplates across Tracy. pretty Yes, I in a

environment they are So believe watch judicious the more a that in is you everybody kind cautious, they little of being going purchase as on macro what's the and being in just more to make. have

or am those look Bluemercury, essentially to Bloomingdale's -- really First I performance at look all the I in positive range. with if I XX at flat I the were at look or pleased

customer I looking think in buy? is an I where environment why the should for

have said the challenge price. just to our lowest I've team, And not is our to

Bloomingdale's buy our challenge is Bluemercury, reason compelling and at for a to composition. have Our that the create to Macy's, we in inventory customer and

newness We in have site. amount of and flow the our our to that that we to stores

We we in brands. that that the exclusivity offer private with have

And we the campaign in begins in as September of Bloomingdale's, which the think I September. begins have which Bluemercury, XXth Italy mentioned, and anniversary from we at celebration

that all all three are shop other get buy of those nameplates. to So and income our economic ways levels consumers at we

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

just quarter First on holiday fourth one Tony maybe for is your approach.

compressed shopping week. XXrd election, relapping got period, You've

different guys with have a strategy you if wondering this that year backdrop? Just

trend, comp looking Adrian, then that getting for at with half front I'm back And compared the a harder. half that's acceleration to comp from the back half

get in what assuming to how better trying results or exactly that just that things I'm there you're So understand outcome?

to Good Alex. talk Thanks, to you.

the comp start Macy's, holiday out and assortments Bloomingdale's actually cover team both Let I month good will Bluemercury. me a the And progression. did ago. holiday, our I with and about the just with about style Adrian feel really at

newness a had more ago. than have year we We

and detail. next to share some exclusive wait more I'll Macy's call until have partnerships at Bloomingdale's the We that in both

the We old being are we've the same assortment. holiday into. the would We teams mix tell gifting. in highly really We're things you, had I trends. in change leaning our But want of don't want that weather to year's sensitive to to have don't last have

we ideas the we that We're product cold the weather than of three brands. have categories. across just So broader strength obviously fragrances leaning a range have into at

our days less between form entertainment. Thanksgiving So certainly of a election Christmas. there. and and an remember, And yes, and our X in we retail brands got -- We have shopping three escapism But I think because provide that in capitalizing opportunity fourth Adrian? the to range of a sure have share wallet to quarter of brands the we're make of and that job larger prices categories on is sell. we and

and iterating way. as Chapter about is punchline changes to have we're not also the stores more we and We're where changes are that We're there but I and implemented earlier. not Tony still. and X only Bold strategy, Look, both, continuing a confidence, tracking and we've spoke energy standing quarters there's we're into changes we deploying on make in that New the

very good seeing we We're We're coming giving us some making mix there. in We're and mix media to digital adjustments be that's changes spend encouraged what marketing online results. seems with speak. our as we're making with that

the to products goods value, the price we orientation of consumer As on we're the the of quality also being We're today's total clear value I to very not offer, of for but them spoke better. flowing the about earlier, that leading equation. value

in-stocks last we better this year. than have We did year

did digital digital have faster for We deliveries year. our orders we last than

better. of going in to execution business back building top blocks that's of that sequential build us improvement half number we gives into get getting a more are line, things the We're and that as disciplined, into are there confidence better across So these year. just the the

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

to Neil environment the cadence, the back promotional you from new current half inventory How expect reflective of what's more landscape, much guidance. both Oliver as more is promotional on high of to morning. this competitive Goh from that on position? in This driven players the I digital XXXX the versus for want Macy's is just legacy touch and it the pertains concepts

puts you're that health watching as just And then it pertains see and to key of broadly, you consumer just the currently? that more any takes

Thanks, Neil.

we're at at at. of are you We're also Adrian and Yes, his discretionary We're campaigns. the our Let add coming health all looking potential of compelling commentary. our looking nature levels, inflation predominantly the at the the about looking first looking excited me each down. jobless optimism. take We're indicators that claims. can part, think our consumer rate focused inventory marketing on of at But cuts. I We're I'm looking spending,

of got an an inventory a of from And of balance I in quarter I to right, think newness. the the newness. saw level, we after haven't trends that think where it are balance clearance, started level, that percent we in add the of take of And the I third composition we the product, action from look transitional inventory quarter. always balance continuing age from into would second we well why some the that's positioned

always bottom after consumer protecting or at you he line. a is shopping sure that balance you of she have this So are game and going the that time where the the are and the of same making right

And business I improve not today. where think opportunities forward. the to pursuing on aggressively obviously enhance team we the really We're that. we're are going is doing of and job sitting a good

that controlling only Tony The I it can summed Neil, what we would up add quite thing we're well. control. is

that of see see experience. green We better a to we business provide opportunities lot within a on the have the the shoots ahead We growth.

being we season. And the biggest holiday is year very enter time the so us, thoughtful, of which just as we're for the

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

to the any Any I the to any us how the thought on Or guess, sales non-go-forward assumption half maybe way model. help two? on stores? our thought maybe Adrian, spread about and just go-forward for your gave think second guidance the between the just same-store triangulate between you stores

reason guide total to sales. to in just comps then know of if quarterly a don't any difference. the model spread aware And XQ, changes on forward noise. basis, comp XQ I Maybe quarter we there add you some but usually on us it and off the remind Is to how a of? relative XQ calendar XQ, spread there's be to that that know just impacted usually I

Absolutely.

do anything comment please and to Tony. I'll Tony So see if has add,

worse perform than would planned. actually the expected of than effectively we'd stores things on is performed -- non-go-forward So they actually what one that the better we

So are customers stores. shopping still those

we made our half in when and about slightly the overall outlook year-over-year performance, some the So back there's of so for that the we adjustment of guidance year. think better,

for really fundamentals it's getting And comps, have think of adjustments and quarter as year, been every better day, better of quarter, Tony back the that I about half about and every the we call. third think trajectory and we on the every speaking this a about the it's lot the week, As month. fourth

we actually that so we those we get going back into about as of believe it's half year. And think the investments, the as the business improve to sequentially

example, First about other think the continue stores, we the non-go-forward, to balance. example, see, and the stores the Macy's XX the for with within relative performance for As fleet we improve our to of, XX trends go-forward the sequential continuing to First

put those that So it improve. to whether of in these we'll confidence stores the in us changes, just into able stores, year-over-year comp changes and we gives sales of it's additional be whether staffing it's introduce shoes, to get growth XXX as building handbag blocks some and the relative to that visual more the actually changes really

just just about you're We're -- made operations now, to you're second thinking those buying you years a about on ahead how how the specifically thinking little of to some the I plan your the kind the stores. in specifically maybe inventories sales in on inventory you've to go-forward could us of a more then about in. if watching talk go-forward pacing stores making any out sneak one the Okay. -- in the the sales ago. investments, Are inventory of And couple changes bit the investments relative half? for thoughts Can

a it's the a are and say in the We of just a me don't few we because compare great ago, inventory remained clear years couple intent add customer. levels digits being let Mike, would I the important. have stock things conversion. year-over-year think on on to down terms for But obviously of because I of in Yes. double inventory

that the I our or risk think said, very and Neither properly. going season. newness Adrian amount worked level of we as are kind I carefully, the getting the transitional and I fall value that things the with associated is inventory have of one of inventory, the clearance into on of about flowing worried

We and think it those And it in stores, being quarter. markdown a into I were -- at the ago stock basis. newness third basis. on year better an it's inventory a flowing fashion we're than go-forward look positioned going think on I look We much we replenishment, so age on at into

expectation. is, of news quantity But is take there slightly add that we do started the quarter point, the acknowledge in Mike, to I'd higher than the Tony at second thing the and your inventory our were second only for to The that of mentioned. end appropriate QX and adjust inventories composition as to good the quarter, we already fall action season QX the

more expansion inventory added location at much With course inventory category transition location supply regards would the allocation sell-through than we the to last because to of more with the of at really mark being several year season the margin around places season. sell can has in seen we as specific over disciplines manage the what over the or reducing years in we've as by really diligent our of you that level, amount store, the from very type know, trends, of to at where of weeks past or of price some last full so we're appropriate to have been we first a amount by looking the clearance the the trends inventory of by

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

Eric Chuck. This is on ] [ for

lapsed growth want more? the this in, back that Or get you positive to come about And all coming from comps. spending the the coming get the is Are store? to changes XX do been how to seeing to new or out you that Just that customers existing back? them made customers ask customers have First locations, the

good the question. for thanks Eric,

Macy's It's points I versus we're consecutive think store of growth. quarters other we comp business. XXX progress improvement of XX. that the are, X continued again, or the basis It's seeing the excited in locations First about

doing of fact stores the is we that that consumer. all increased across shows and work growth with increased the have us the seeing other traffic are we're that that that the think we I business, Macy's families conversion versus resonating

existing geo-targeting new combination working make is closely via well of the search is our eventing to And stores activations to new team that messages message and is communication some Marketing our getting out customers and It SMS with as and of the customers. as in product sure a and Head new e-mail customers.

obviously, plan. and and to So of is resonate, we're plan only And the the level awareness we growing. right want X-year have it a quarters patients a is news customers' X good into seeing determination. We're changed

have lives. would the into to number the business, Eric, bring out prior you and investing which ready-to-wear we is check customers I in to described, handbags when make driving to a us fitting color sure we to we're when that's calls, about bit little and what The that just things stores thing shoes spoke about previous that that of making as think gives about of the of that opportunity best other additional in only we've been we Tony in Tony experience investments saw and in some the in, and have just convert actually more staffing room, the long these also think customer you don't home, relative add, And years. coming

visual better presentation, through sharper store the looks, value. activating greater We're

time have with We get to back events spend and to store reasons come us. the people to

for And being Macy's offered to have what's going their know get customers locale that of top store. we that have local to to excited those in out We about in digital customers. them messaging local we marketing mind keep

seeing the are number Tony's relative sales traffic of customers, in touched of and a a point, those in of it seeing conversion, traction. terms that we're kinds in sequential that performance. are And it we're gaining categories improvement So seeing things to the we're have

about of although lot over pace, a So the but the we a said, is pace pace, shipping without appropriate as appropriate healthy Tony ourselves. what talk what's

is from question next coming of The UBS. Jay Sole

hear raised on -- it that asset looks what's you guidance? the would just and to were sold you My and range like question this assets went And proceeds. Adrian, the sale to year for bit was gains be the what It monetization driving about elaborate of is could end Hopefully, compared . me. where helpful. can the guidance a Maybe, last quarter. high little

very Great environment. to We're even in Jay. getting this punchline is from The very pleased progress. and you, responses healthy be with landlords here is pipeline the the traction developers. and we're healthy with deal

the coming into to of $XXX in had million So to quarter, your point, sale range a $XX million gains. we asset

approximately saying we're Now million. $XXX

forecasting $XX $XX balance tell of We of in in good QX. with traction. QX. of a million were which leaves guidance in $XX our But million I in pleased trending you what We're million gains well. quite QX, overall, is Lots will

we're that to stores. outlook be going of our of to prior XX implication stores The XX relative approximately is that closing

just of we're very those pleased value evidence those this able having. further is So transactions. and the we're in that with to also traction deals the all And we're unlock

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

I had questions. of a couple

the benefits, and was quarter, expectations? accounting was First, thought transportation I on year? half it? at the merchandise the it, your in versus margin process that the the peeling away whichever favorable cost way look you second margin or level product the margin, Tony, merchandise for how second of And how that mean, what's on

and in brand And existing the the results put that environment? men's you're in ask to start primarily enhanced Or to in service I Macy's a also from handbags is wanted stores, XX is if to different and that seeing matrix there stores? the you'll

bit companies little could upon Macy's this a cycle, which how and second we're a going has the denim third And acted seeing that just into quarter help talk you about lastly, lot opportunity? if of quarter

the Janet. questions. Thanks, Appreciate

First, on merchandise margin.

collective negotiate sure compelling from all the without and related guide we're always science guidance and is brand we're company. obviously margin value consumer to the fall quality led I work for of for inventory. learning margin team market away the our that think season. the the in the providing has led of A the it's appropriately the to of the and to to quarter opportunities a making that pricing beating giving to value, part and our It's a but give as margin us our

quality emphasized, inventories. both about the we of our Adrian So and feel I good that's why

First staffing of expand and to with and it the a As XX and to XXX yes, the of other it's the to handbags quality inventory opportunity combination the relates the shoe pilots, inventory. -- doors

So Karl hear these are Lauren stores that's Lagerfeld and brands in and all COACH, good to doing by of like Lauren why available Ralph it's which well.

service model you you're environment that where know $XXX In assistance. we a buying a having need in handbag, addition, $XXX, an

both that in that seen impact that in impact expanding the in excited First are We're shoes And so this we stores fall. and we've XX. to handbags see XXX

many a question on so in your are denim rise. wide the silhouette Janet, finally, new And or years skinny. on a in denim We're leg high and now we shape cycle, in a in absolutely after

And so have assortment how great Macy's. and premium We brands that? at the like of assortment of -- as well we at advantage an take powerful SevenX we and assortment Bloomingdale's, have Levi's obviously Silver as

Macy's expect in and kids denim to in so of the for women's, and And a great fall in both assortment Bloomingdale's find season. men's at

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

have all call. should days, today. morning. your left another good what update forward say. of good on appreciate the Thank third summer. is you, time And rest providing to We We certainly -- hope quarter I everyone, look to a guess, a you we thanks, I few a Have

this gentlemen, event. concludes and Ladies today's

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