Macy's Inc · NYSE:M
Macy's — Q3 2020 Earnings Presentation
15 slides from Macy's's earnings presentation, Nov 19, 2020
Slide 1: Third Quarter 2020 Earnings
Third Quarter 2020 Earnings Jeff Gennette, Chairman & CEO | Adrian Mitchell, CFO November 19, 2020
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: Third Quarter Snapshot
THIRD QUARTER SNAPSHOT millions, except per share figures and percentages 3Q20 3Q19 Net Sales $ 3,990 $ 5,173 Comp sales - owned (21.0)% (3.9)% Comp sales - owned + licensed (20.2)% (3.5)% Credit card revenues, net $ 195 $ 183 Gross margin $ 1,421 $ 2,067 Gross margin rate 35.6% 40.0% Selling, gener
Slide 4: Third Quarter Highlights
THIRD QUARTER HIGHLIGHTS • Positive adjusted EBITDA of $159 million achieved one quarter sooner than expected • Positive unadjusted EBITDA of $113 million • Finished the quarter without drawing from asset-backed credit facility • Strong liquidity position with approximately $1.6 billion in cash at t
Slide 5: Third Quarter Highlights
THIRD QUARTER HIGHLIGHTS millions, except percentages 3Q20 3Q19 Change Notes • Profit share from our Citibank arrangement has performed better then anticipated in recent months as customers are revolving and maintaining their currency with us Credit Revenue $195 $183 +$12 • Potentially influenced by
Slide 6: 2020 Expectations
2020 EXPECTATIONS 2020 EXPECTATIONS Comp sales - owned + licensed Down low- to mid-20's for the Fall season Annual digital sales penetration of mid-40%. Digital High-teens digital increase in the Fall season. Low- to mid-teens increase for full year digital sales Stores Q2 exit rate holds through Fa
Slide 7: Our Vision Is to Be the Leading Multi-Branded Fashion Retailer
OUR VISION IS TO BE THE LEADING MULTI-BRANDED FASHION RETAILER FROM OFF-PRICE TO LUXURY, FROM ONLINE TO OFFLINE, FROM ON-MALL TO OFF-MALL WE WILL OFFER CONVENIENT ACCESS TO THE FULLNESS OF OUR BRANDS. Our customers want great fashion Our customers are omni-shoppers. Our customers come to us for the
Slide 8: We Have Refined Our Polaris Strategies
WE HAVE REFINED OUR POLARIS STRATEGIES WITH A FOCUS ON HOW EACH WILL STRENGTHEN & REINFORCE EACH OTHER CUSTOMER FASHION DIGITAL strengthen C US T OM E R W e will develop a high W e will build on our W e will strategically R E L AT I O NS H I P S engagement customer fashion authority by invest across
Slide 9: Polaris Strategies Drive Competitive Advantage & Differentiation
POLARIS STRATEGIES DRIVE COMPETITIVE ADVANTAGE & DIFFERENTIATION TO FIRST RECOVER THE BUSINESS THEN DRIVE BOTH TOP- AND BOTTOM-LINE GROWTH strengthen curate accelerate optimize reset CUSTOMER QUALITY DIGITAL OMNI COST RELATIONSHIPS FASHION GROWTH NETWORK BASE ✓ Improve end-to-end ✓ Evolve role of th
Slide 10: Polaris Will Stabilize and Grow Gross Margin and Right-Size Cost Base
POLARIS WILL STABILIZE AND GROW GROSS MARGIN AND RIGHT-SIZE COST BASE GROSS MARGIN AND SG&A IMPROVEMENT TARGETS ~ $2.1 billion Marketing 1 Supply2 Chain Stores 3 Corporate 4 5 2022 run-rate 6 & other savings SG&A Gross Margin Target of ~$1.5 billion Target of ~$600 million 10
Slide 11: Macy's, Inc. Store Count
Macy’s,INC. MACY’S, Inc.STORE StoreCOUNT Count End of 2Q20 End of 3Q20 Change in Store Locations from 2Q20 Boxes Store Locations Boxes Store Locations Macy's Flagships 16 11 16 11 Macy's Magnets 429 384 429 384 Macy's Core 445 395 445 395 0 Macy's Neighborhood 100 94 98 92 -2 Macy's Furniture 53 48
Slide 12: 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 add
Slide 13: Changes in Comparable Sales
CHANGES IN COMPARABLE SALES 13 weeks ended October 31, 2020 Decrease in comparable sales on an owned basis (Note 1) (21.0)% Impact of growth in comparable sales of departments licensed to third parties (Note 2) 0.8% Decrease in comparable sales on an owned plus licensed basis (20.2)% Notes: (1) Repr
Slide 14: EBITDA, Excluding Certain Items
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION, EXCLUDING CERTAIN ITEMS 13 weeks 13 weeks ended ended October 31, November 2, In millions 2020 2019 Most comparable GAAP measure: Net income (loss) $(91) $2 Non-GAAP measure: Net income (loss) $(91) $2 Interest expense, net 80 48 Feder
Slide 15: Diluted EPS, Excluding Certain Items and Gains on Sale of Real Estate
DILUTED EARNINGS (LOSS) PER SHARE, EXCLUDING CERTAIN ITEMS AND GAINS ON SALE OF REAL ESTATE 13 weeks 13 weeks ended ended October 31, November 2, 2020 2019 Most comparable GAAP measure: Diluted earnings (loss) per share $(0.29) $0.01 Non-GAAP measure: Diluted earnings (loss) per share $(0.29) $0.01