Macy's Inc · NYSE:M
Macy's — Q2 2019 Earnings Presentation
17 slides from Macy's's earnings presentation, Aug 14, 2019
Slide 1: Second Quarter 2019 Earnings Presentation
Second Quarter 2019 Earnings Presentation Jeff Gennette, Chairman & CEO | Paula Price, CFO August 14, 2019
Slide 2: Safe Harbor Statement
Safe Harbor Statement All forward-looking statements are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the expectations a
Slide 3: 2Q19 Highlights
2Q19 Highlights • Delivered another quarter of comparable sales growth • Quarter had slow start driven by: • A miss on fashion in our key women’s sportswear private brands • Slow sell-through of warm weather apparel • Accelerated decline in international tourism business • Took necessary markdowns t
Slide 4: 2Q Earnings Snapshot
2Q EARNINGS SNAPSHOT in millions except per share figures and percentages 2Q19 Net Sales $5,546 Comp sales - owned 0.2% Comp sales - owned + licensed 0.3% Credit card revenues, net $176 Gross margin $2,151 Gross margin rate 38.8% SG&A $2,177 SG&A rate 39.3% Gains on sale of real estate $7 GAAP Dilut
Slide 5: Balanced Investment to Support Our Winning Formula
BALANCED INVESTMENT TO SUPPORT OUR WINNING FORMULA HEALTHY ROBUST GREAT STORES .COM MOBILE EXPERIENCE 5
Slide 6: 2019 Strategic Initiatives
2019 Strategic Initiatives Add 100 Expand to Continue doors and 50 Macy’s Aggressive “mobile first” Dresses keep the stores and expansion of strategy and Fine Jewelry original 50 deliver vendors and deliver Big Ticket growing positive SKUs outsized Men’s ahead of the comps for growth in Tailored tot
Slide 7: Growth 150 Overview Q2 Update
Growth 150 Overview Q2 Update • Growth investment model: upgrades to facilities, fixtures, staffing, assortment and customer service to • Work on next 100 stores is well build a scalable model for brick & mortar growth underway and will be complete by • Scaling to another 100 locations in 2019: impl
Slide 8: Backstage Overview Q2 Update
Backstage Overview Q2 Update • Macy’s on-mall, off-price business: 212 locations within Macy’s stores nationwide and 7 freestanding locations at • Opened 47 locations year to date and the end of Q2 2019 have more than 200 Backstage • Average total store lift more than 5% in 2018: for all locations i
Slide 9: Vendor Direct Overview Q2 Update
Vendor Direct Overview Q2 Update • Expansion of online assortment • Nearly doubled SKUs online since the expansion in • Halfway to our goal of adding 1 million early 2018 SKUs this year • Includes products from our existing national brands and the addition of new brands and categories • Digital grow
Slide 10: Mobile Overview
Mobile Overview Q2 Update • Delivered more than $1 billion in sales through mobile apps in 2018 • Continue to see significant increases • Fastest growing channel in traffic and conversion • Expect outsized growth in 2019 • App Feature Enhancements: • Introduced quick barcode pickups of • My Wallet:
Slide 11: Destination Businesses Overview Q2 Update
Destination Businesses Overview Q2 Update • Competitive advantage: drive cross-shopping to take advantage of department store model • All six Destination Businesses • Six categories represented ~37% of total 2018 sales outperformed the balance of the • Allocating additional resources to gain market
Slide 12: Innovation
Innovation STORY thredUP My List @ Bloomingdale’s • Launched second iteration of STORY – • Partnership with fashion resale marketplace • Bloomingdale’s will launch a subscription rental Outdoor STORY service next month • Piloting in 40 stores across the country • Learnings will inform a similar stra
Slide 13: Funding Our Future Q2 Update
FUNDING OUR FUTURE Supply Merchandising Marketing Store Private Label Indirect Spend Chain Mix & Pricing Labor Sourcing Procurement Q2 Update • Successful test of Hold and Flow gives us confidence in operating the program at scale during the Fall, and expect to see significant EBIT benefits • Using
Slide 14: Confidence in 2H19 Margin
Confidence in 2H19 Margin • Inventory is well positioned • Entering Fall season with the right inventory level and mix to meet anticipated customer demand • Improved freshness and liquidity to respond to in-season trends • Merchandising updates • Majority of unanticipated markdowns were related to W
Slide 15: Guidance
Guidance in millions except per share figures and percentages Updated FY19 Guidance Original FY19 Guidance Net Sales Approximately flat Approximately flat Comp sales - owned Flat to +1.0% Flat to +1.0% Comp sales - owned + licensed Flat to +1.0% Flat to +1.0% Credit card revenues, net $740 to $765 $
Slide 16: Tariffs Update
Tariffs Update • Currently assessing the details that the US Trade Representative’s office released on August 13 th related to the fourth tranche of tariffs on goods imported from China • Confident our scale gives us the leverage to find mitigation strategies that work for us, our vendor partners an
Slide 17: Additional Information
Additional Information Macy's, Inc. is scheduled to present at the Goldman Sachs Annual Global Retailing Conference at 8:05 a.m. ET on Thursday, September 5, 2019, in New York City. Macy's, Inc. will report results for the third quarter 2019 on Thursday, November 21, 2019. Moving forward, the compan