Slide 1: A Bold New Chapter
A Bold New Chapter Q4 2023 Earnings February 27, 2024
Slide 2: Safe Harbor Statement
Safe Harbor Statement All statements in this presentation 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 and
Slide 3: We must up our game and have an even stronger call to action
We must up our game and have an even stronger call to action. A Bold New Chapter 3
Slide 4: A Bold New Chapter
A Bold New Chapter Challenging the status quo to fundamentally reposition the company, enhance the customer experience, deliver growth and unlock shareholder value. Strengthen Accelerate Simplify & Modernize Macy’s Nameplate Luxury Growth End-to-End Operations A Bold New Chapter 4
Slide 5: A Bold New Chapter: FY24 transition and investment year
A Bold New Chapter FY24 will be a transition and investment year. Close ~150 Underperforming Macy’s Locations Reprioritize investments in remaining ~350 locations1 FY24 - FY26 Grow Luxury2 Store Locations by ~20% Actions Asset Monetization $600M to $750M3 Primarily related to stores & distribution c
Slide 6: A Bold New Chapter serves as a strong call to action
A Bold New Chapter serves as a strong call to action. It challenges the status quo to create a more modern Macy’s, Inc. We are making the necessary moves to reinvigorate relationships with our customers through improved shopping experiences, relevant assortments and compelling value. Our teams are e
Slide 7: Strengthen Macy's Nameplate
Strengthen Macy’s Nameplate
Slide 8: Strengthen Macy's Nameplate
Strengthen Macy’s Nameplate Return to topline growth, enhance the customer experience and regain market share Rationalize Rollout Revitalize Launch First Grow Store Base Small Format Assortment 50 Program Digital Strengthen Macy’s Nameplate 8
Slide 9: Rationalize Store Base & Rollout Small Format
Strengthen Macy’s Nameplate Rationalize Store Base & Rollout Small Format Store Highlights ~150 ~350 non-go-forward, enhance, high potential up to 30 new small formats through underproductive go-forward locations FY25 locations to close through FY261 through FY26 • ~150 non-go-forward locations repr
Slide 10: Revitalize Assortment
Strengthen Macy’s Nameplate Revitalize Assortment Full Category Approach to Merchandising • Ability to better focus on nuances that make each category thrive. • Increased visibility and awareness across entire categories. • Strengthen relationships with partners, diversify product across price point
Slide 11: Improve the Omni-channel Experience – First 50
Strengthen Macy’s Nameplate Improve the Omni-channel Experience – First 50 First 50 Plans • In FY23, small number of incubator stores comps outperformed the broader Macy’s fleet by over 350 bps. • Recently expanded test to 50 stores, referred to as the First 50. • Learnings from the First 50 will be
Slide 12: Improve the Omni-channel Experience – Digital
Strengthen Macy’s Nameplate Improve the Omni-channel Experience – Digital Digital Opportunities • Gateway for customers to research, discover, connect and transact with Macy’s. • Imperative to show up with inspiring content at the right time, place and value. Key Initiatives • Re-evaluated foundatio
Slide 13: Strengthen Macy's Nameplate
Strengthen Macy’s Nameplate
Slide 14: Accelerate Luxury Growth
Accelerate Luxury Growth as
Slide 15: Accelerate Luxury Growth
Accelerate Luxury Growth Take advantage of leadership position to more aggressively grow luxury nameplates Accelerate Accelerate Bloomingdale’s Growth Bluemercury Growth Accelerate Luxury Growth 15
Slide 16: Accelerate Bloomingdale's Growth
Accelerate Luxury Growth Accelerate Bloomingdale’s Growth Business Highlights ~15 new Bloomie’s and ~80% Bloomingdale’s digital The Outlet locations sales in markets with opening through stores FY261 Go-forward Priorities • Expand Bloomingdale’s footprint in new markets beyond current 14/50 top desi
Slide 17: Accelerate Bluemercury's Growth
Accelerate Luxury Growth Accelerate Bluemercury’s Growth Business Highlights at least 30 roughly 30 new locations to open remodels to be completed through FY26 through FY26 Go-forward Priorities • Launching “The New Blue,” Bluemercury’s total omni-channel evolution inclusive of updated branding and
Slide 18: Accelerate Luxury Growth
Accelerate. Luxury Growth
Slide 19: Simplify & Modernize End-to-End Operations
Simplify & Modernize End-to-End Operations
Slide 20: Simplify & Modernize End-to-End Operations
Simplify & Modernize End-to-End Operations Align end-to-end operations to anticipated future omni-demand Rationalize & Monetize Our Streamline Improve Inventory Deliver a Scalable Supply Chain Asset Portfolio Fulfillment Planning & Allocation Technology Platform Simplify & Modernize End-to-End Opera
Slide 21: Supply Chain, Fulfillment, Inventory & Technology cost savings
Simplify & Modernize End-to-End Operations Supply Chain, Fulfillment, Inventory & Technology $100M $235M Cost savings in FY241 Annual run-rate savings by FY261 Cost Savings • Savings will be used to fund the investments necessary to support the company's strategy, offset inflationary cost pressures,
Slide 22: Simplify & Modernize End-to-End Operations
Simplify & Modernize End-to-End Operations Align end-to-end operations to anticipated future omni-demand Rationalize & Monetize Our Streamline Improve Inventory Deliver a Scalable Supply Chain Asset Portfolio Fulfillment Planning & Allocation Technology Platform Simplify & Modernize End-to-End Opera
Slide 23: Simplify & Modernize End-to-End Operations
Simplify & Modernize End-to-End Operations
Slide 24: 4Q23 Financial Results
4Q23 Financial Results
Slide 25: Revenue Highlights
4Q23 Financial Results Revenue Highlights1 $8.1B $255M Net sales -1.7% vs 4Q22 Other revenue -20% vs 4Q22 -5.4% $195M Comparable owned sales2 vs Credit card revenue net -26% vs 4Q22 4Q22 -4.2% $60M Comparable owned-plus-licensed Macy’s Media Network revenue net (O+L) sales2 vs 4Q22 +5% vs 4Q22 1 4Q2
Slide 26: Nameplate Highlights
4Q23 Financial Results Nameplate Highlights1 -2.5% -4.7% comparable O+L sales2 net sales vs 4Q22 vs 4Q22 +3.5% -1.6% comparable O+L sales2 net sales vs 4Q22 vs 4Q22 +7.8% +2.3% comparable owned net sales vs 4Q22 sales2 vs 4Q22 1 4Q23 is on a 14-week basis & 4Q22 is on a 13-week basis unless otherwis
Slide 27: Profitability & Productivity Highlights
4Q23 Financial Results Profitability & Productivity Highlights Actuals1 Change1 vs 4Q22 Total Revenue $8,375 -2% Gross Margin $3,044 +8% Gross Margin Rate2 37.5% +340 bps SG&A Expense $2,405 -2% SG&A Expense Rate3 28.7% +10 bps EBIT $(76) -111% Adjusted EBIT $936 +35% Adjusted EBIT Margin Rate3 11.2
Slide 28: Capital Allocation
Capital Allocation
Slide 29: Capital Allocation Overview
Capital Allocation Overview Highlights & Targets $1B+ 2.0x Ending FY23 cash or below Long-term leverage ratio1 target Our Priorities Remain • A healthy capital structure, • Investing in long-term profitable growth, and • Returning capital to shareholders. 1 Defined as Adjusted Debt to Adjusted EBITD
Slide 30: FY23 Capital Allocation Highlights
Capital Allocation FY23 Highlights $1,305M Operating Cash Flow $993M Capital Expenditures $398M Free Cash Flow $181M Dividend Payments $25M Stock Buybacks1 1 Under the company’s current open-ended share repurchase authorization. Capital Allocation 30
Slide 31: FY24 Guidance
FY24 Guidance
Slide 32: FY24 Guidance
FY24 Guidance -1.5% to +1.5% -1.0% to +2.5% ~Flat to +2.5% $22.2B to $22.9B vs FY23 vs FY23 vs FY23 Comparable Macy’s Go-Forward2 Luxury Nameplates2 Net Sales O+L+M Sales1 Comparable O+L+M Sales Comparable O+L+M Sales $22.9B to $23.6B ~39.2% to 39.5% 8.5% to 8.9% $2.45 to $2.85 Gross Margin Adjusted
Slide 33: 1Q24 Guidance
1Q24 Guidance $4.72B to $4.87B $4.85B to $5.0B Net Sales Total Revenue1 Down no more than 40bps vs 1Q23 $0.10 to $0.16 ~Flat vs 1Q23 Gross Margin Rate2 Adjusted Diluted EPS3 Inventory NOTE: The company’s outlook excludes any potential impact from the proposed credit card late fee ruling. 1 Expect cr
Slide 34: A Bold New Chapter Targets 2025 & Beyond
A Bold New Chapter Targets 2025 & Beyond Low-Single-Digit Mid-Single-Digit Annual Comparable O+L+M Sales Growth1 Annual Adjusted EBITDA Dollar Growth Below Historic Rate of Return to Below FY24 Levels Inflation of 2% to 3% Pre-Pandemic Levels Annual SG&A Dollar Growth Annual Capital Expenditures Ann
Slide 35: A Bold New Chapter: FY24 transition and investment year
A Bold New Chapter FY24 will be a transition and investment year. Close ~150 Underperforming Macy’s Locations Reprioritize investments in remaining ~350 locations1 FY24 - FY26 Grow Luxury2 Store Locations by ~20% Actions Asset Monetization $600M to $750M3 Primarily related to stores & distribution c
Slide 36: A Bold New Chapter
A Bold New Chapter Challenging the status quo to fundamentally reposition the company, enhance the customer experience, deliver growth and unlock shareholder value. Strengthen Accelerate Simplify & Modernize Macy’s Nameplate Luxury Growth End-to-End Operations A Bold New Chapter 36
Slide 37: Leadership team
A Bold New Chapter Leadership team, emblematic of the vision for a new, modern Macy’s, Inc. Tony Spring Adrian V. Mitchell Danielle Kirgan Tracy Preston, Laura Miller Chief Executive Officer and Chief Operating and Financial Chief Transformation and Chief Legal Officer and Chief Information Chairman
Slide 38: A Bold New Chapter
A Bold New Chapter Building a stronger, more vibrant Macy’s, Inc. that is well positioned to thrive and create meaningful value for all stakeholders. Bold New Chapter 38
Slide 39: Q&A
Q&A
Slide 40: Additional Information
Additional Information
Slide 41: Store Count as of February 3, 2024
Additional Information Store Count as of February 3, 2024 End of 4Q23 Change In Locations from FY22 Locations Macy's Department Stores 435 -6 Macy's Small Format 12 +4 Macy's Furniture 45 -1 Macy's Furniture Clearance 1 — Freestanding Backstage 9 — Stores converted to Fulfillment Centers 0 -2 Total
Slide 42: Long-term Debt Maturities as of February 3, 2024
Additional Information Long-term Debt Maturities as of February 3, 2024 % represents weighted average interest rate. All outstanding long-term debt is unsecured. Additional Information 42
Slide 43: 4Q23 Additional Nameplate Highlights
Additional Information 4Q23 Additional Nameplate Highlights Actuals Change vs 4Q22 Macy’s Digital1 Digital visits 739M -4% Conversion rate 4.1% -20 bps Customers that downloaded the Macy’s app 2M -7% Luxury Nameplates Digital Digital visits 92M -3% Conversion rate 2.9% Flat NOTE: Nameplate digital d
Slide 44: 4Q23 Additional Nameplate Highlights, cont.
Additional Information 4Q23 Additional Nameplate Highlights, cont. Performance vs 4Q22 Macy’s Backstage1 Store-within–store comparable owned sales versus Macy’s full-line in which they +920 bps operate Bloomingdale’s the Outlet Comparable owned-plus-licensed versus Bloomingdale’s full-line +540 bps
Slide 45: 4Q23 Financial Highlights & Commentary
Additional Information 4Q23 Financial Highlights & Commentary1 Actuals Change Commentary vs 4Q22 Net Sales $8,120 -2% Digital sales decreased 4% versus 4Q22, brick-and-mortar sales were roughly flat versus 4Q22. Comparable owned sales2 -5.4% Digital penetration of net sales was 36%. Comparable O+L s
Slide 46: 4Q23 Financial Highlights & Commentary
Additional Information 4Q23 Financial Highlights & Commentary1 Actuals Change Commentary vs 4Q22 EBIT $(76) -111% EBIT, EBITDA and Diluted loss per share in 4Q23 included $1.0 billion of impairment, restructuring and other costs primarily related to actions that support profitable growth and Adjuste
Slide 47: FY23 Nameplate Customer Highlights
Additional Information FY23 Nameplate Customer1 Highlights Actuals Macy’s Active customers 41.2M Star Rewards active member accounts 30.1M Star Rewards program members % of Macy’s comparable owned-plus-licensed sales 73% Bloomingdale’s Active customers 4.0M Loyallist program active member accounts 2
Slide 48: FY23 Financial Highlights
Additional Information FY23 Financial Highlights1 Actuals Change Actuals Change vs FY22 vs FY22 Net Sales $23,092 -6% EBIT $259 -85% Comparable owned sales2 -6.9% Adjusted EBIT $1,420 -21% Comparable O+L sales2 -6.0% Adjusted EBIT Margin Rate4 5.9% -110 bps Other Revenue $774 -23% EBITDA $1,156 -55%
Slide 49: FY24 Guidance as of 2/27/2024
Additional Information FY24 Guidance as of 2/27/2024 | Reflects a 52-week year Asset sale gains/Monetization $90 million to $115 million/$130 million to $150 Net sales $22.2 billion to $22.9 billion proceeds3 million -4% to -1% vs FY23 Comparable O+L+M sales Down ~1.5% to up ~1.5% vs FY23 Benefit pl
Slide 50: FY24 Guidance Assumptions as of 2/27/2024
Additional Information FY24 Guidance Assumptions as of 2/27/2024 Housekeeping Items • FY24 is a 52-week period while FY23 was a 53-week period. The FY24 outlook for all metrics is provided on a 52-week basis, with the exception of comparable sales, which is provided on a 52-week basis for both perio
Slide 51: Appendix
Appendix
Slide 52: 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 53: Changes in Comparable Sales – Macy's, Inc.
Changes in Comparable Sales – Macy's, Inc. Macy’s, Inc. Versus 13 weeks ended January 28, 2023 Decrease in comparable sales on an owned basis (Note 1) (5.4)% Impact of departments licensed to third parties (Note 2) 1.2% Decrease in comparable sales on an owned plus licensed basis (4.2)% Notes: 1. Re
Slide 54: Changes in Comparable Sales – Macy's, Inc.
Changes in Comparable Sales – Macy's, Inc. Macy’s, Inc. Versus 52 weeks ended January 28, 2023 Decrease in comparable sales on an owned basis (Note 1) (6.9)% Impact of departments licensed to third parties (Note 2) 0.9% Decrease in comparable sales on an owned plus licensed basis (6.0)% Appendix 54
Slide 55: Changes in Comparable Sales – Macy's and Bloomingdale's Nameplates
Changes in Comparable Sales- Macy’s and Bloomingdale’s Nameplates Macy’s Versus 13 weeks ended January 28, 2023 Decrease in comparable sales on an owned basis (Note 1) (6.0)% Impact of departments licensed to third parties (Note 2) 1.3% Decrease in comparable sales on an owned plus licensed basis (4
Slide 56: Earnings Before Interest and Taxes, Excluding Certain Items
Earnings Before Interest and Taxes, Excluding Certain Items Millions, except percentages 14 weeks ended 13 weeks ended February 3, 2024 January 28, 2023 Most comparable GAAP measure: Net income (loss) $(71) $508 Total revenue $8,375 $8,583 Net income (loss) as a percent to total revenue (0.8)% 5.9%
Slide 57: Earnings Before Interest and Taxes, Excluding Certain Items
Earnings Before Interest and Taxes, Excluding Certain Items Millions, except percentages 53 weeks ended 52 weeks ended February 3, 2024 January 28, 2023 Most comparable GAAP measure: Net income $105 $1,177 Total revenue $23,866 $25,449 Net income as a percent to total revenue 0.4% 4.6% Non-GAAP meas
Slide 58: EBITDA Excluding Certain Items
Earnings Before Interest, Taxes, Depreciation, and Amortization Excluding Certain Items Millions, except percentages 14 weeks ended 13 weeks ended February 3, 2024 January 28, 2023 Most comparable GAAP measure: Net income (loss) $(71) $508 Total revenue $8,375 $8,583 Net income as a percent to total
Slide 59: EBITDA Excluding Certain Items
Earnings Before Interest, Taxes, Depreciation, and Amortization Excluding Certain Items Millions, except percentages 53 weeks ended 52 weeks ended February 3, 2024 January 28, 2023 Most comparable GAAP measure: Net income $105 $1,177 Total revenue $23,866 $25,449 Net income as a percent to total rev
Slide 60: Net Income and Diluted EPS, Excluding Certain Items
Net Income and Diluted Earnings Per Share, Excluding Certain Items Millions 14 weeks ended 13 weeks ended February 3, 2024 January 28, 2023 Net Income Diluted Earnings Diluted Earnings (Loss) (Loss) Per Share Net Income Per Share As reported $(71) $(0.26) $508 $1.83 Impairment, restructuring and oth
Slide 61: Net Income and Diluted EPS, Excluding Certain Items
Net Income and Diluted Earnings Per Share, Excluding Certain Items Millions 53 weeks ended 52 weeks ended February 3, 2024 January 28, 2023 Diluted Earnings Diluted Earnings Net Income Per Share Net Income Per Share As reported $105 $0.38 $1,177 $4.19 Impairment, restructuring and other costs 1,027
Slide 62: Free Cash Flow
Free Cash Flow Millions 53 weeks ended February 3, 2024 Net cash provided by operating activities $1,305 Purchase of property and equipment (631) Capitalized software (362) Disposition of property and equipment 86 Free Cash Flow $398 Appendix 62