Slide 1: Macy's, Inc. Second Quarter 2023 Earnings Presentation
Macy’s, Inc. Second Quarter 2023 Earnings Presentation August 22, 2023
Slide 2: Safe Harbor Statement
Safe Harbor Statement All statements in this press release that are not statements of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of Macy’s management an
Slide 3: CEO quote on second quarter results
“In the second quarter, we delivered better-than-expected top and bottom-line results. Our teams surgically implemented clearance markdowns and promotions to effectively clear spring seasonal receipts and ensure fresh assortments for the fall and Holiday seasons. We continue to see uncertainty in th
Slide 4: 2Q23 Financial Results
2Q23 Financial Results In millions, except per share figures and percentages Net Sales $5,130 -8.4% from 2Q22 Net sales were slightly above the high-end of outlook. Digital penetration of net sales was 30%, flat vs 2Q22. Comparable owned plus licensed Comparable owned sales change (O+L) sales change
Slide 5: 2Q23 Financial Results (continued)
2Q23 Financial Results (continued) In millions, except per share figures and percentages Earnings Before Interest, Taxes, Diluted Gross Margin (GM) Depreciation & Amortization (EBITDA) Earnings Per Share (EPS) 38.1% 4.2% $1,954 of net sales $221 of total revenue $(0.08) -10.3% from 2Q22 -80 bps from
Slide 6: Capital Allocation Highlights
Capital Allocation Highlights Year-to-date free cash flow outflow of $261M • Cash flow from operating activities of $271M • Capital expenditures of $564M • Primarily focused on digital & technology investments, data & analytics, supply chain modernization and omni-channel capabilities Year-to-date d
Slide 7: Five Growth Vectors
Five Growth Vectors Macy’s Private Brand Reimagination Designed to drive customer loyalty, be a differentiator for the business, complement our national brands matrix, drive sales and benefit gross margin. • Recently launched On 34th, our first new private brand under the reimagination, with ~80% of
Slide 8: Nameplate Performance
Nameplate Performance
Slide 9: Macy's 2Q23 Highlights
2Q23 Highlights Net Sales Comparable O+L Sales Top Categories -9.3% -8.2% Beauty Versus 2Q22 Versus 2Q22 Women’s Career Customer Highlights1 Sportswear ~41.5M ~29.8M Men’s Tailored Apparel active customers1 Star Rewards active member accounts1 ~72% Of Macy’s comp O+L sales were made up by Star Rewar
Slide 10: Bloomingdale's 2Q23 Highlights
2Q23 Highlights Net Sales Comparable O+L Sales Top Categories -3.6% -2.6% Beauty Versus 2Q22 Versus 2Q22 Women's Contemporary & Designer Apparel Customer Highlights1 Shoes ~4.0M ~2.5M Active customers1 Loyallist active member accounts1 ~82% Of total Bloomingdale’s O+L sales were made up by Loyallist
Slide 11: Bluemercury 2Q23 Highlights
2Q23 Highlights Net Sales Comparable Sales Top Categories +5.6% +5.8% Skincare Versus 2Q22 Versus 2Q22 Color Customer Highlights1 ~736k ~954k active customers1 Loyalty member accounts2 ~86% Of total Bluemercury sales were made up by loyalty customers Additional Highlights Realized tenth consecutive
Slide 12: Looking Ahead…
Looking Ahead…
Slide 13: FY23 Guidance
FY23 Guidance (on a 53-week basis unless otherwise noted) FY23 Guidance (as of 8/22/2023) FY23 Guidance (as of 6/1/2023) Net sales $22.8 billion to $23.2 billion $22.8 billion to $23.2 billion Comparable Owned + Licensed sales (on a 52-week basis) Approximately down 7.5% to down 6% from 2022 Approxi
Slide 14: FY23 Adjusted Diluted EPS Guidance Reconciliation versus 6/1/2023 Guidance
FY23 Adjusted Diluted EPS Guidance Reconciliation versus 6/1/2023 Guidance Better-than-expected second quarter gross margin, SG&A and interest expense, and a lower annual share count, are expected to fully offset reduced annual credit card revenue and asset sale gain assumptions. Low-end High-end FY
Slide 15: 3Q23 and 2H23 Guidance
3Q23 and 2H23 Guidance 3Q23 Guidance (as of 8/22/2023) Net sales $4.75 billion to $4.85 billion Gross margin rate At least 140 basis points better than 3Q22 Adjusted diluted EPS* $(0.03) to $0.02 Inventories Down approximately low to mid-single digits to last year on a percentage basis • 3Q23 gross
Slide 16: Additional Business Metrics
Additional Business Metrics
Slide 17: Store Count – As of July 29, 2023
Store Count – As of July 29, 2023 End of 2Q23 Change in Locations from FY22 Boxes Locations Macy's Department Stores 494 440 -1 Macy's Small Format 8 8 — Macy's Furniture 51 46 — Macy's Furniture Clearance 1 1 — Freestanding Backstage 9 9 — Stores converted to Fulfilment Centers 2 2 — Total Macy's 5
Slide 18: Remaining Long-term Debt Maturities, as of July 29, 2023
Remaining Long-term Debt Maturities, as of July 29, 2023
Slide 19: Appendix
Appendix
Slide 20: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures The company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non- GAAP financial measures provide users of the company's financial information with ad
Slide 21: Changes in Comparable Sales – Macy's, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures - Changes in Comparable Sales – Macy's, Inc. Versus 13 weeks ended Versus 13 weeks ended Macy’s, Inc. July 30, 2022 July 31, 2021 Decrease in comparable sales on an owned basis (Note 1) (8.2%) (1.5)% Impact of departments licensed to third partie
Slide 22: Changes in Comparable Sales – Macy's and Bloomingdale's brands
Reconciliation of GAAP to Non-GAAP Financial Measures - Changes in Comparable Sales- Macy’s and Bloomingdale’s brands Versus 13 weeks ended Macy’s July 30, 2022 Decrease in comparable sales on an owned basis (Note 1) (9.2%) Impact of departments licensed to third parties (Note 2) 1.0% Decrease in co
Slide 23: EBITDA Excluding Certain Items
Reconciliation of GAAP to Non-GAAP Financial Measures - Earnings Before Interest, Taxes, Depreciation, and Amortization Excluding Certain Items 13 weeks ended 13 weeks ended Millions, except percentages July 29, 2023 July 30, 2022 Most comparable GAAP measure: Net income (loss) $(22) $275 Total reve
Slide 24: Net Income, Excluding Certain Items
Reconciliation of GAAP to Non-GAAP Financial Measures - Net Income, Excluding Certain Items 13 weeks ended 13 weeks ended Millions July 29, 2023 July 30, 2022 Most comparable GAAP measure: Net income (loss) $(22) $275 Non-GAAP measure: Net income (loss) $(22) $275 Impairment, restructuring and other
Slide 25: Diluted Earnings Per Share, Excluding Certain Items
Reconciliation of GAAP to Non-GAAP Financial Measures - Diluted Earnings Per Share, Excluding Certain Items 13 weeks ended 13 weeks ended July 29, 2023 July 30, 2022 Most comparable GAAP measure: Diluted earnings (loss) per share $(0.08) $0.99 Non-GAAP measure: Diluted earnings (loss) per share $(0.
Slide 26: Free Cash Flow
Reconciliation of GAAP to Non-GAAP Financial Measures - Free Cash Flow Millions 26 weeks ended July 29, 2023 Net cash provided by operating activities $271 Purchase of property and equipment (390) Capitalized software (174) Disposition of property and equipment 32 Free Cash Flow $(261)