Macy's Inc · NYSE:M
Macy's — Non-Deal Roadshow (October 2024)
39 slides from Macy's's roadshow presentation, October 2024
Slide 1: Off-Season Shareholder Outreach
Off-Season Shareholder Outreach October 2024
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 those in the forw
Slide 3: Contents
Contents • A Bold New Chapter o Overview • Strengthen Macy’s Nameplate • Accelerate Luxury Growth • Simplify and Modernize End-to- End Operations o Macy’s, Inc. 1H24 Financial and Capital Allocation Highlights • Social Purpose o Mission Every One o Sustainability o Diversity, Equity & Inclusion • Co
Slide 4: A Bold New Chapter
A Bold New Chapter Three-year plan to return Macy’s, Inc. to profitable growth. Strengthen Accelerate Simplify & Modernize Macy’s Nameplate Luxury Growth End-to-End Operations
Slide 5: Bold New Chapter progress: CEO commentary
I'm pleased with the progress we're making on our Bold New Chapter strategy. My team and I share a passion for finding new and innovative ways to serve and excite the customer, and we have a unique advantage through our iconic events as well as our everyday interactions. We understand that being in
Slide 6: Strengthen Macy's Nameplate
Strengthen Macy’s Nameplate Return to topline growth, enhance the customer experience and regain market share Launch First Rationalize Revitalize Grow Rollout 50 Program Store Base Assortment Digital Small Format
Slide 7: First 50 Locations
Strengthen Macy’s Nameplate First 50 Locations Leading indicator of Go-Forward Macy’s growth First 50 Locations • Not the “Best 50” locations; representative of broader Go-Forward fleet so can be applied to remaining 300 locations. • Improve customer experience with focused staffing in shoes, handba
Slide 8: Rationalize Store Base
Strengthen Macy’s Nameplate Rationalize Store Base Monetizing Non-Go-Forward locations Overview • Prioritizing investments in ~350 high potential Go-Forward locations1. • In FY23, Non-Go-Forward locations represented ~30% of Macy’s store base, ~25% of Macy’s, Inc. gross square footage but less than
Slide 9: Merchandising, Digital, and Small Format
Strengthen Macy’s Nameplate Merchandising, Digital, and Small Format Revitalize the Assortment • Introduced and expanded distribution in several market brands in both women’s and men’s assortments. • Private brand reimagination progressing, completed majority of apparel brands. Grow Digital • Optimi
Slide 10: Accelerate Luxury Growth
Accelerate Luxury Growth Confident in luxury’s long-term potential, continuing to leverage strong storytelling heritage through new brands, expanded partnerships and exciting launches and events. Bloomingdale’s Bluemercury
Slide 11: Simplify & Modernize End-to-End Operations
Simplify & Modernize End-to-End Operations Leaning into cost savings programs and working capital discipline while making targeted investments in areas like automation and process simplification to improve day-to-day execution. Rationalize & Monetize Our Streamline Improve Inventory Deliver a Scalab
Slide 12: 1H24 Financial Highlights
Macy’s, Inc. Financial and Capital Allocation Highlights 1H24 Financial Highlights $9.8B Net sales -3.3% vs 1H23 -1.4% Go-Forward Macy’s, Inc.1 Business Comparable Owned-Plus-Licensed-Plus- Marketplace Sales 39.9% $0.80 Gross margin rate2, +90 bps vs 1H23 Adjusted diluted earnings per share (EPS), -
Slide 13: 1H24 Capital Allocation Highlights
Macy’s, Inc. Financial and Capital Allocation Highlights 1H24 Capital Allocation Highlights Priorities • Healthy capital structure, • Investing in long-term profitable growth, and • Returning capital to shareholders. $137M Operating Cash Flow $432M Capital Expenditures $244M $96M Dividend Payments F
Slide 14: Social Purpose
Social Purpose
Slide 15: Mission Every One social purpose platform
Creating a brighter future for all and supporting the organization in delivering on A Bold New Chapter Mission Every One, our enterprise-wide social purpose platform, builds on our heritage of corporate citizenship to achieve positive societal change. This commitment aims to create a brighter future
Slide 16: Sustainability
Sustainability
Slide 17: Embedding Sustainability Throughout the Organization
Embedding Sustainability Throughout the Organization Notable ESG Rankings* Our guiding principles Macy’s, Inc., is supporting future profitable sales growth strategies while improving its environmental, social and governance performance. Our sustainability program is anchored on two primary commitme
Slide 18: Sustainability: Four Pillars
Sustainability Four pillars are key to our approach Environment Human Rights Products Governance We are committed to minimizing We prioritize the human rights and We are expanding our assortment We are enabling disclosure, data the environmental impact of our social compliance policies and of sustai
Slide 19: Environment: Progress on Key Focus Areas
Progress on Key Focus Areas (Additional Ambitions in 2023 Corporate Responsibility Report) Ongoing Complete Ambition Year FY23 Update Progress Fibers & Material Sourcing 40% of private brand products* made with preferred sustainable fibers, as defined by policies for each 2025 35% of Macy’s ke
Slide 20: Diversity, Equity and Inclusion
Diversity, Equity and Inclusion
Slide 21: Diversity, Equity & Inclusion vision and focus areas
DIVERSITY, EQUITY & INCLUSION OUR VISION is to be the beacon of diversity, equity and inclusion for our customers, colleagues and communities OUR MISSION is to embed diversity, equity and inclusion into how we think, act, and operate to help deliver on the Bold New Chapter strategy The work we do to
Slide 22: Diversity, Equity & Inclusion
Diversity, Equity & Inclusion Colleague diversity, across all organizational levels, helps us better engage all customers and achieve our business goals % Female by Job Level 73% 76% 66% 67% 64% 64% 59% 60% FY 2022 FY 2023 • Slight increase of ethnic diversity at the leadership levels • +1pt at Dire
Slide 23: Diversity, Equity & Inclusion: Key Accomplishments
Diversity, Equity & Inclusion Key Accomplishments COLLEAGUE CUSTOMER SUPPLIER COMMUNITY MARKETING Achieved 30% ethnic diverse Conducted in-depth Increased sourcing Continuing $1M funding Continued focus on diverse representation for Director + consumer research to identify pipelines through strategi
Slide 24: News, Features & Recognition through August 2024
Diversity, Equity & Inclusion News, Features & Recognition through August 2024 Awards & Recognition News Articles May 2, 2024 Macy’s Debuts Divine Nine Menswear Collection May 1, 2024 The Divine Nine Black-founded Fraternities Inspired This New Fashion Collection 2024 Corporation of the Year, Finali
Slide 25: Compensation
Compensation
Slide 26: Total Reward Strategies for Colleague Attraction and Retention
Total Reward Strategies for Colleague Attraction and Retention Our goal is to build a rewards strategy that encourages and recognizes performance Highlights: • Minimum wage: $15/hour for all colleagues, companywide. • Path to Growth: Every job matters, and the Path to Growth Incentive plan (PTG) rec
Slide 27: Compensation Programs Grounded in Strong Governance Practices
Compensation Programs Grounded in Strong Governance Practices Align pay with company performance Incentive plans use multiple metrics to reward performance for driving company strategy and strengthening stock valuation Leverage relative total shareholder return metric within our long-term incentive
Slide 28: Executive Compensation Philosophy
Executive Compensation Philosophy • Our executive compensation structure is designed to attract, motivate, and retain leaders with the skills required to formulate and implement our strategic business 2023 Program Design objectives and deliver on our commitment to build long-term shareholder value.
Slide 29: Alignment between Pay and Performance
Strong Alignment between Pay Demonstrated in the outcome of our programs and Performance is at the Core of CEO Realized Compensation (‘000s) Macy's, Inc. Compensation Program • We believe our executive compensation program is competitive, strongly focused on pay-for-performance principles and approp
Slide 30: Governance
Governance 30
Slide 31: Corporate Governance Highlights
Corporate Governance Highlights Diverse Board in terms of gender, ethnicity, experience Lead independent director and skills Annual election of all directors Independent Board Committees Majority voting in uncontested director elections No shareholder rights plan Policy prohibiting pledging and hedg
Slide 32: Corporate Governance Highlights: Board Diversity and Skills
Corporate Governance Highlights Directors provide an effective mix of experience and perspectives, as well as gender, age and racial/ethnic diversity Racial / Ethnic Diversity Director Skills Matrix Asian 13% White 73% 27% Skill/Experience Count of Directors Ethnically Black Diverse 7% Leadership 15
Slide 33: Additional Resources
Additional Resources Quarterly Results Annual Reports and Proxy Statements Corporate Responsibility Report Additional Resources and Reports Policies and Commitments, including: • Preferred Materials Policy • Animal Welfare Policy • Fur Policy • Exotic Skins Policy • Chemical Policy
Slide 34: Appendix
Appendix
Slide 35: 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 36: Changes in Comparable Sales
Changes in Comparable Sales 13 weeks ended August 3, 2024 versus 13 weeks ended July 29, 2023 Macy's First 50 locations Increase in comparable sales on an owned basis (Note 1) 0.8% Impact of departments licensed to third parties (Note 2) 0.2% Increase in comparable sales on an owned-plus-licensed ba
Slide 37: Changes in Comparable Sales
Changes in Comparable Sales 26 weeks ended August 3, 2024 versus 26 weeks ended July 29, 2023 Macy’s, Inc. Go-Forward business Decrease in comparable sales on an owned basis (Note 1) (2.3)% Impact of departments licensed to third parties and marketplace sales (Note 2) 0.9% Decrease in comparable sal
Slide 38: Net Income and Diluted Earnings Per Share, Excluding Certain Items
Net Income and Diluted Earnings Per Share, Excluding Certain Items Millions, except per share figures 26 weeks ended 26 weeks ended August 3, 2024 July 29, 2023 Diluted Earnings Diluted Earnings Net Income Per Share Net Income Per Share As reported $212 $0.75 $133 $0.48 Impairment, restructuring and
Slide 39: Free Cash Flow
Free Cash Flow Millions 26 weeks ended August 3, 2024 Net cash provided by operating activities $137 Purchase of property and equipment (271) Capitalized software (161) Disposition of property and equipment 51 Free Cash Flow $(244)