Slide 1: Macy's, Inc. Third Quarter 2023 Earnings Presentation
Macy’s, Inc. Third Quarter 2023 Earnings Presentation November 16, 2023
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: CEO quote on third quarter results
"I'd like to thank our teams for executing well during the quarter. We delivered better-than-expected top and bottom line third quarter results and are entering the holiday period in a healthy inventory position. Our portfolio of nameplates are leading gift-giving destinations across the value spect
Slide 4: 3Q23 Financial Results
3Q23 Financial Results In millions, except per share figures and percentages Net Sales $4,860 -7.1% from 3Q22 Net sales were slightly above the high-end of outlook. Digital penetration of net sales was 31%, flat versus 3Q22. Comparable owned plus licensed Comparable owned sales change (O+L) sales ch
Slide 5: 3Q23 Financial Results (continued)
3Q23 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) $1,958 40.3% $312 6.2% $0.15 of net sales of total revenue -3.4% from 3Q22 +160 bps from 3
Slide 6: Capital Allocation Highlights
Capital Allocation Highlights Year-to-date free cash flow outflow of $555M • Cash flow from operating activities of $158M • Capital expenditures of $749M • 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 national brands matrix and benefit gross margin. • Pleased with performance of both I.N.C. and On 34th. • In September 2023, Macy's rolled out the next phase of
Slide 8: Nameplate Performance
Nameplate Performance
Slide 9: 3Q23 Highlights: Macy's
3Q23 Highlights Net Sales Comparable O+L Sales Top Categories -7.9% -6.7% Beauty Versus 3Q22 Versus 3Q22 Women’s Career 1 Customer Highlights Sportswear ~41.3M ~30.0M Men’s Tailored Apparel active customers1 Star Rewards active member accounts1 ~72% of Macy’s comp O+L sales were made up by Star Rewa
Slide 10: 3Q23 Highlights: Bloomingdale's
3Q23 Highlights Net Sales Comparable O+L Sales Top Categories -2.6% -4.4% Beauty Versus 3Q22 Versus 3Q22 Women's Contemporary Apparel Customer Highlights1 ~4.0M ~2.6M Shoes active customers1 Loyallist active member accounts1 ~84% of total Bloomingdale’s O+L sales were made up by Loyallist members Ad
Slide 11: 3Q23 Highlights: Bluemercury
3Q23 Highlights Net Sales Comparable Sales Top Categories +2.5% +2.5% Skincare Versus 3Q22 Versus 3Q22 Color Customer Highlights1 ~683k ~995k active customers1 Loyalty member accounts2 ~86% of total Bluemercury sales were made up by loyalty customers Additional Highlights Realized 11th consecutive q
Slide 12: Looking Ahead…
Looking Ahead… Targeting sustainable annual net sales and comparable owned-plus-licensed sales growth* beginning in FY24 * Even in an environment where macro pressures persist. Based on the timing and anticipated impact of several roll-outs. Investments are reflected in FY23 SG&A and CapEx assumptio
Slide 13: FY23 Guidance
FY23 Guidance (on a 53-week basis unless otherwise noted) FY23 Guidance (as of 11/16/2023) FY23 Guidance (as of 8/22/2023) Net sales $22.9 billion to $23.2 billion $22.8 billion to $23.2 billion Comparable Owned + Licensed sales Approximately down 7% to down 6% from 2022 Approximately down 7.5% to d
Slide 14: 4Q23 Guidance
4Q23 Guidance 4Q23 Guidance (as of 11/16/2023) Reflects a 14 week period Net sales $7.95 billion to $8.25 billion Gross margin rate At least 220 basis points better than 4Q22 Adjusted diluted EPS* $1.85 to $2.10 Inventories Roughly flat relative to last year on a percentage basis and down approximat
Slide 15: Additional Business Metrics
Additional Business Metrics
Slide 16: Store Count – As of October 28, 2023
Store Count – As of October 28, 2023 End of 3Q23 Change in Locations from FY22 Boxes Locations Macy's Department Stores 494 440 -1 Macy's Small Format 11 11 3 Macy's Furniture 51 46 — Macy's Furniture Clearance 1 1 — Freestanding Backstage 9 9 — Stores converted to Fullfilment Centers 2 2 — Total Ma
Slide 17: Remaining Long-term Debt Maturities
Remaining Long-term Debt Maturities, as of October 28, 2023
Slide 18: Appendix
Appendix
Slide 19: 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 20: Changes in Comparable Sales – Macy's, Inc.
Changes in Comparable Sales – Macy's, Inc. Versus 13 weeks ended Versus 13 weeks ended Macy’s, Inc. October 29, 2022 October 30, 2021 Decrease in comparable sales on an owned basis (Note 1) (7.0%) (3.1%) Impact of departments licensed to third parties (Note 2) 0.7% 0.4% Decrease in comparable sales
Slide 21: Changes in Comparable Sales – Macy's and Bloomingdale's brands
Changes in Comparable Sales- Macy’s and Bloomingdale’s brands Versus 13 weeks ended Macy’s October 29, 2022 Decrease in comparable sales on an owned basis (Note 1) (7.6%) Impact of departments licensed to third parties (Note 2) 0.9% Decrease in comparable sales on an owned plus licensed basis (6.7%)
Slide 22: EBITDA Excluding Certain Items
Earnings Before Interest, Taxes, Depreciation, and Amortization Excluding Certain Items 13 weeks ended 13 weeks ended Millions, except percentages October 28, 2023 October 29, 2022 Most comparable GAAP measure: Net income $43 $108 Total revenue $5,038 $5,467 Net income as a percent to total revenue
Slide 23: Net Income, Excluding Certain Items
Net Income, Excluding Certain Items 13 weeks ended 13 weeks ended Millions October 28, 2023 October 29, 2022 Most comparable GAAP measure: Net income $43 $108 Non-GAAP measure: Net income $43 $108 Impairment, restructuring and other costs 15 15 Settlement charges 7 32 Income tax impact of certain it
Slide 24: Diluted Earnings Per Share, Excluding Certain Items
Diluted Earnings Per Share, Excluding Certain Items 13 weeks ended 13 weeks ended October 28, 2023 October 29, 2022 Most comparable GAAP measure: Diluted earnings per share $0.15 $0.39 Non-GAAP measure: Diluted earnings per share $0.15 $0.39 Impairment, restructuring and other costs 0.05 0.05 Settle
Slide 25: Free Cash Flow
Free Cash Flow 39 weeks ended Millions October 28, 2023 Net cash provided by operating activities $158 Purchase of property and equipment (485) Capitalized software (264) Disposition of property and equipment 36 Free Cash Flow $(555)