Core Insights - The article provides a comprehensive analysis of Amazon.com in comparison to its major competitors in the Broadline Retail industry, focusing on financial metrics, market position, and growth prospects [1] Company Overview - Amazon is the leading online retailer, with retail-related revenue accounting for approximately 75% of total revenue, followed by Amazon Web Services (15%), advertising services (5% to 10%), and other segments [2] - International sales contribute 25% to 30% of Amazon's non-AWS revenue, with Germany, the United Kingdom, and Japan being the leading markets [2] Financial Metrics Comparison - Amazon's Price to Earnings (P/E) ratio is 35.28, which is 0.79x lower than the industry average, indicating potential undervaluation [5] - The Price to Book (P/B) ratio of 7.39 exceeds the industry average by 1.11x, suggesting the stock may be trading at a premium relative to its book value [5] - Amazon's Price to Sales (P/S) ratio of 3.72 is 1.62x the industry average, indicating it might be considered overvalued based on sales performance [5] - The Return on Equity (ROE) stands at 5.68%, which is 0.18% above the industry average, reflecting efficient use of equity to generate profits [5] - Amazon's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is $36.6 billion, which is 5.91x above the industry average, indicating stronger profitability [5] - The gross profit of $86.89 billion is 5.24x above the industry average, showcasing higher earnings from core operations [5] - Revenue growth of 13.33% exceeds the industry average of 11.18%, indicating strong sales performance [5] Debt to Equity Ratio - Amazon's debt-to-equity (D/E) ratio is 0.4, indicating a lower reliance on debt financing compared to its top 4 peers, which suggests a more favorable balance between debt and equity [10] - The D/E ratio comparison allows for a concise evaluation of financial health and risk profile within the industry [8] Summary of Performance - Overall, Amazon.com demonstrates strong financial performance and growth potential, outperforming its industry peers in key metrics such as ROE, EBITDA, gross profit, and revenue growth [8]

Core Viewpoint - Macy's raised its fiscal year outlook after reporting better-than-expected quarterly results, particularly in same-store sales growth, leading to a significant increase in share price [1][4]. Financial Performance - Second quarter revenue decreased by 2.53% to $4.81 billion, surpassing expectations of $4.71 billion [2]. - Adjusted earnings per share fell by 41% to $0.41, exceeding the forecast of $0.18 [2]. - Same-store sales grew by 1.9%, marking the best growth in 12 quarters, while analysts had predicted a decline of 0.51% [2]. Segment Performance - Bloomingdale's and Bluemercury reported same-store sales increases of 3.6% and 1.2%, respectively [3]. - The strong performance in these segments contributed to the overall positive outlook for the company [3]. Outlook and Guidance - Macy's now projects revenue between $21.15 billion and $21.45 billion, slightly above the previous range of $21 billion to $21.4 billion [4]. - Adjusted earnings are expected to be between $1.70 and $2.05, an increase from the prior range of $1.60 to $2.00 [5]. - For 2025, same-store sales are anticipated to decline by 0.5% to 1.5% year-over-year, an improvement from the previous expectation of a 2.0% decline [4]. Market Context - Despite the positive quarterly results, Macy's stock was down nearly 19.5% year-to-date prior to the earnings report, contrasting with the S&P 500's 9% gain [6].

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents Macy's, Inc.'s unaudited consolidated financial statements, including income, comprehensive income, balance sheets, equity, cash flows, and detailed accounting notes [Consolidated Statements of Income](index=3&type=section&id=Consolidated%20Statements%20of%20Income) 13 Weeks Ended August 2, 2025 vs. August 3, 2024 | Metric | August 2, 2025 (millions) | August 3, 2024 (millions) | Change | | :-------------------------------- | :------------- | :------------- | :----- | | Net sales | $4,812 | $4,937 | (2.5%) | | Total revenue | $4,999 | $5,096 | (1.9%) | | Operating income | $149 | $222 | (32.8%) | | Net income | $87 | $150 | (42.0%) | | Basic EPS | $0.32 | $0.54 | (40.7%) | | Diluted EPS | $0.31 | $0.53 | (41.5%) | 26 Weeks Ended August 2, 2025 vs. August 3, 2024 | Metric | August 2, 2025 (millions) | August 3, 2024 (millions) | Change | | :-------------------------------- | :------------- | :------------- | :----- | | Net sales | $9,411 | $9,783 | (3.8%) | | Total revenue | $9,791 | $10,096 | (3.0%) | | Operating income | $242 | $346 | (30.0%) | | Net income | $124 | $212 | (41.5%) | | Basic EPS | $0.45 | $0.77 | (41.6%) | | Diluted EPS | $0.44 | $0.75 | (41.3%) | [Consolidated Statements of Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) - For both the 13 and 26 weeks ended August 2, 2025, and August 3, 2024, **total comprehensive income was equal to net income**, as other comprehensive income (net of tax) was zero or negligible[15](index=15&type=chunk) [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) - Total Assets decreased from **$16,402 million** on February 1, 2025, to **$15,551 million** on August 2, 2025[18](index=18&type=chunk) - Total Liabilities decreased from **$11,850 million** on February 1, 2025, to **$11,199 million** on August 2, 2025[18](index=18&type=chunk) - Shareholders' Equity decreased from **$4,552 million** on February 1, 2025, to **$4,451 million** on August 2, 2025[18](index=18&type=chunk) - Merchandise Inventories were **$4,342 million** as of August 2, 2025, a slight decrease from **$4,468 million** on February 1, 2025, and **$4,378 million** on August 3, 2024[18](index=18&type=chunk) [Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) - Shareholders' Equity remained at **$4,451 million** from May 3, 2025, to August 2, 2025, after starting at **$4,552 million** on February 1, 2025[22](index=22&type=chunk) - Stock repurchases for the 26 weeks ended August 2, 2025, totaled **$153 million**[22](index=22&type=chunk) - Common stock dividends paid for the 26 weeks ended August 2, 2025, totaled **$101 million**[22](index=22&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) - Net cash provided by operating activities increased to **$255 million** for the 26 weeks ended August 2, 2025, from **$137 million** in the prior year[28](index=28&type=chunk) - Net cash used by investing activities decreased to **$262 million** for the 26 weeks ended August 2, 2025, from **$373 million** in the prior year[28](index=28&type=chunk) - Net cash used by financing activities increased significantly to **$471 million** for the 26 weeks ended August 2, 2025, from **$152 million** in the prior year, primarily due to debt transactions and stock repurchases[28](index=28&type=chunk) - Cash, cash equivalents and restricted cash decreased to **$832 million** as of August 2, 2025, from **$1,310 million** at the beginning of the period[28](index=28&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [1. Organization and Summary of Significant Accounting Policies](index=9&type=section&id=1.%20Organization%20and%20Summary%20of%20Significant%20Accounting%20Policies) - Macy's, Inc. operates as an omni-channel retail organization under three nameplates: Macy's, Bloomingdale's, and Bluemercury, selling a wide range of merchandise[30](index=30&type=chunk) - Effective February 4, 2024, the Company changed its inventory valuation method from LIFO retail inventory method (RIM) to the LIFO cost method for improved accuracy, transparency, and comparability[35](index=35&type=chunk) - The One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, is not expected to materially impact the estimated fiscal 2025 effective tax rate but is expected to decrease fiscal 2025 cash tax payments[39](index=39&type=chunk) - The Company is evaluating the impacts of ASU 2023-09 (Income Tax Disclosures, effective FY2026), ASU 2024-03 (Expense Disaggregation Disclosures, effective FY2028), and ASU 2025-05 (Credit Losses for Accounts Receivable, effective FY2027)[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) [2. Earnings Per Share](index=11&type=section&id=2.%20Earnings%20Per%20Share) - Diluted EPS for the 13 weeks ended August 2, 2025, was **$0.31**, down from **$0.53** for August 3, 2024[45](index=45&type=chunk) - Diluted EPS for the 26 weeks ended August 2, 2025, was **$0.44**, down from **$0.75** for August 3, 2024[45](index=45&type=chunk) - Stock options (**5.9 million shares**) and restricted stock units (**1.0 million shares**) were outstanding but excluded from diluted EPS computation for August 2, 2025, as their inclusion would have been antidilutive or performance conditions were not met[45](index=45&type=chunk) [3. Revenue](index=12&type=section&id=3.%20Revenue) - Net sales represented **96%** of total revenue for both the 13 and 26 weeks ended August 2, 2025[47](index=47&type=chunk) Revenue Breakdown (26 Weeks Ended August 2, 2025) | Revenue Type | Amount (millions) | | :-------------------------- | :---------------- | | Total Net Sales | $9,411 | | Credit card revenues, net | $306 | | Macy's Media Network revenue, net | $74 | | Total Other Revenue | $380 | | Total Revenue | $9,791 | - Macy's accounted for **84%** and **83%** of the Company's net sales for the 13 and 26 weeks ended August 2, 2025, respectively[50](index=50&type=chunk) - Digital sales accounted for **31%** and **32%** of net sales for the 13 and 26 weeks ended August 2, 2025, respectively[50](index=50&type=chunk) - Credit card revenues increased to **$306 million** for the 26 weeks ended August 2, 2025, from **$242 million** in the prior year, driven by a strong credit portfolio and active management of net credit card losses[48](index=48&type=chunk)[57](index=57&type=chunk) [4. Financing Activities](index=14&type=section&id=4.%20Financing%20Activities) - Debt repayments for the 26 weeks ended August 2, 2025, totaled **$650 million**, including **$6 million** short-term debt and **$644 million** long-term debt[60](index=60&type=chunk) - On July 29, 2025, Macy's Retail Holdings, LLC issued **$500 million** in **7.375%** senior notes due 2033[60](index=60&type=chunk) - The Company recognized a **$13 million loss** on extinguishment of debt in Q2 2025 due to tender offers and redemptions of senior notes and debentures[63](index=63&type=chunk) - On April 9, 2025, the ABL Credit Facility was reduced from **$3,000 million** to **$2,100 million** and extended to April 2030[64](index=64&type=chunk) - Approximately **12.6 million shares** were repurchased for **$151 million** during the 26 weeks ended August 2, 2025, with **$1,224 million** remaining under the share repurchase authorization[70](index=70&type=chunk) [5. Retirement Plans](index=15&type=section&id=5.%20Retirement%20Plans) - Defined contribution plan expense for the 401(k) Qualified Defined Contribution Plan was **$44 million** for the 26 weeks ended August 2, 2025[75](index=75&type=chunk) - The Pension Plan reported a net benefit of **$(19) million** for the 26 weeks ended August 2, 2025[75](index=75&type=chunk) - Supplementary Retirement Plan expense was **$13 million** for the 26 weeks ended August 2, 2025[75](index=75&type=chunk) [6. Fair Value Measurements](index=16&type=section&id=6.%20Fair%20Value%20Measurements) - The total fair value of marketable equity and debt securities was **$38 million** as of August 2, 2025, classified as Level 1[77](index=77&type=chunk) - The fair value of long-term debt was **$2,336 million** as of August 2, 2025, compared to a carrying amount of **$2,626 million**[80](index=80&type=chunk) - The Company concluded that goodwill and intangible assets with indefinite lives were not impaired in its annual assessment as of May 2025[81](index=81&type=chunk) [7. Supplier Finance Programs](index=17&type=section&id=7.%20Supplier%20Finance%20Programs) - Outstanding obligations related to suppliers participating in SCF programs were **$136 million** as of August 2, 2025, recorded within merchandise accounts payable[83](index=83&type=chunk) - The Company's obligations to its suppliers are not impacted by a supplier's participation in the SCF programs[82](index=82&type=chunk) [8. Segments](index=17&type=section&id=8.%20Segments) - Macy's, Inc. aggregates all its operations into a single reporting segment due to similar business activities, economic environments, and key economic metrics across its brands[85](index=85&type=chunk) - The Chief Executive Officer, Tony Spring, acts as the Chief Operating Decision Maker (CODM) and reviews segment performance based on net income, with disaggregation of depreciation and amortization from selling, general and administrative expenses[86](index=86&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Macy's, Inc.'s financial condition and results of operations, covering its 'A Bold New Chapter' strategy, performance, liquidity, capital resources, and non-GAAP reconciliations [Quarterly Overview and Company Strategy](index=18&type=section&id=Quarterly%20Overview%20and%20Company%20Strategy) - The Company is executing its 'A Bold New Chapter' strategy, focusing on enhancing the omni-channel shopping experience, strengthening the Macy's nameplate, accelerating luxury growth, and simplifying operations[89](index=89&type=chunk) - Macy's delivered its strongest second quarter net promoter score on record, with Reimagine 125 locations outperforming the rest of the Macy's fleet in traffic, average order value, and net promoter scores[89](index=89&type=chunk) - Bloomingdale's achieved its highest second quarter sales and net promoter score on record, and Bluemercury achieved its 18th consecutive quarter of comparable sales growth[89](index=89&type=chunk) Comparable Sales (Q2 2025 vs. Q2 2024) | Metric | Owned Basis | O+L+M Basis | | :-------------------------------- | :---------- | :---------- | | Macy's, Inc. | +0.8% | +1.9% | | Macy's, Inc. go-forward business | +1.1% | +2.2% | | Macy's | +0.4% | +1.2% | | Reimagine 125 locations | +1.1% | +1.4% | | Bloomingdale's | +3.6% | +5.7% | | Bluemercury | +1.2% | +1.2% | [Results of Operations](index=20&type=section&id=Results%20of%20Operations) [Comparison of the Second Quarter of 2025 and the Second Quarter of 2024](index=20&type=section&id=Comparison%20of%20the%20Second%20Quarter%20of%202025%20and%20the%20Second%20Quarter%20of%202024) - Net sales decreased by **$125 million (2.5%)** to **$4,812 million**, primarily due to the closing of 64 non-go-forward locations (approximately **$170 million** impact)[93](index=93&type=chunk) - Other revenue increased by **$28 million**, mainly driven by credit card revenues due to a strong credit portfolio and active management of net credit card losses[94](index=94&type=chunk) - Gross margin rate declined **80 basis points** to **39.7%**, attributed to proactive markdowns on early Spring assortments and the flow-through of product bought under **145%** China tariffs[95](index=95&type=chunk) - Selling, general and administrative (SG&A) expenses decreased by **$29 million (1.5%)** but increased as a percent of total revenue to **38.9%** from **38.7%** due to declining net sales[96](index=96&type=chunk) - Operating income decreased to **$149 million (3.0% of total revenue)** from **$222 million (4.4% of total revenue)** in the prior year[92](index=92&type=chunk) [Comparison of the 26 Weeks Ended August 2, 2025 and August 3, 2024](index=22&type=section&id=Comparison%20of%20the%2026%20Weeks%20Ended%20August%202%2C%202025%20and%20August%203%2C%202024) - Net sales for the first half of 2025 decreased by **$372 million (3.8%)** to **$9,411 million**, primarily due to the closing of 64 non-go-forward locations (approximately **$340 million** impact)[101](index=101&type=chunk) - Other revenue increased by **$67 million** to **$380 million**, mainly from a **$64 million** increase in credit card revenues and a **$3 million** increase in Macy's Media Network revenue[102](index=102&type=chunk) - Gross margin rate decreased **40 basis points** to **39.5%**, driven by proactive markdowns and the flow-through of **145%** China tariffs[103](index=103&type=chunk) - SG&A expenses decreased by **$28 million (0.7%)** but increased as a percent of total revenue to **39.4%** from **38.5%** due to declining net sales[104](index=104&type=chunk) - Operating income decreased to **$242 million (2.5% of total revenue)** from **$346 million (3.4% of total revenue)** in the prior year[100](index=100&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) - The Company's principal sources of liquidity are cash from operations, cash on hand, and the Amended & Extended ABL Credit Facility[108](index=108&type=chunk) - Management believes current liquidity sources will be sufficient to satisfy anticipated needs for working capital, capital expenditures, and cash dividends for at least the next twelve months and the foreseeable future[109](index=109&type=chunk) - Capital allocation goals include maintaining a healthy balance sheet, achieving investment-grade credit metrics, investing in long-term profitable growth, and returning capital to shareholders through dividends and share repurchases[110](index=110&type=chunk) - Cash and cash equivalents were **$829 million** as of August 2, 2025, an increase of **$183 million** from August 3, 2024[111](index=111&type=chunk) - Borrowing availability under the ABL Credit Facility was **$1,957 million** as of August 2, 2025, after accounting for standby letters of credit[111](index=111&type=chunk) [Operating Activities](index=24&type=section&id=Operating%20Activities) - Net cash provided by operating activities increased to **$255 million** for the first half of 2025, up from **$137 million** in the prior year, driven by decreased working capital requirements and lower cash taxes paid[112](index=112&type=chunk)[113](index=113&type=chunk) [Investing Activities](index=24&type=section&id=Investing%20Activities) - Capital expenditures were **$343 million** in the first half of 2025, down from **$432 million** in the prior year, primarily focused on digital, technology, and omni-channel capabilities[114](index=114&type=chunk) [Financing Activities](index=24&type=section&id=Financing%20Activities) - Dividends paid totaled **$100 million** in the first half of 2025, up from **$96 million** in the prior year[115](index=115&type=chunk) - Approximately **12.6 million shares** were repurchased for **$151 million** in the first half of 2025 under the existing share repurchase program; no shares were repurchased in the prior year[117](index=117&type=chunk) - On July 29, 2025, the Company issued **$500 million** in **7.375%** senior unsecured notes due 2033, redeemed **$393 million** of senior notes/debentures, and completed a tender offer for **$251 million** of senior notes/debentures, resulting in a **$13 million loss** on extinguishment of debt[118](index=118&type=chunk) - On April 9, 2025, the ABL Credit Facility was amended, reducing it from **$3,000 million** to **$2,100 million** and extending its maturity to April 2030, with no outstanding borrowings[118](index=118&type=chunk) [Contractual Obligations](index=25&type=section&id=Contractual%20Obligations) - There were no material changes to the Company's contractual obligations and commitments outside the ordinary course of business since February 1, 2025[119](index=119&type=chunk) [Guarantor Summarized Financial Information](index=25&type=section&id=Guarantor%20Summarized%20Financial%20Information) - The Company had **$1,941 million** in senior unsecured notes outstanding as of August 2, 2025, which are fully and unconditionally guaranteed by Macy's, Inc. but are structurally subordinated to all existing and future secured indebtedness[120](index=120&type=chunk) Summarized Balance Sheets (Obligor Group, August 2, 2025) | Asset/Liability | Amount (millions) | | :-------------- | :---------------- | | Current Assets | $993 | | Noncurrent Assets | $5,620 | | Current Liabilities | $1,450 | | Noncurrent Liabilities | $6,995 | Summarized Statement of Operations (Obligor Group, 26 Weeks Ended August 2, 2025) | Metric | Amount (millions) | | :-------------------------- | :---------------- | | Net sales | $372 | | Consignment commission income | $1,453 | | Other revenue | $63 | | Cost of sales | $(154) | | Operating loss | $(713) | | Loss before income taxes | $(322) | | Net loss | $(117) | [Important Information Regarding Non-GAAP Financial Measures](index=26&type=section&id=Important%20Information%20Regarding%20Non-GAAP%20Financial%20Measures) - The Company uses non-GAAP financial measures such as comparable sales (O+L+M basis), EBITDA, Adjusted EBITDA, and Core Adjusted EBITDA to provide additional useful information for evaluating operating performance, sales growth, and operational efficiency[125](index=125&type=chunk) Non-GAAP Reconciliation (26 Weeks Ended August 2, 2025) | Metric | Amount (millions) | | :-------------------------- | :---------------- | | Net income (GAAP) | $124 | | EBITDA | $687 | | Adjusted EBITDA | $717 | | Core Adjusted EBITDA | $685 | - Adjusted diluted earnings per share for the 26 weeks ended August 2, 2025, was **$0.57**, compared to GAAP diluted EPS of **$0.44**[134](index=134&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no material changes to the Company's market risk exposure since the filing of its 2024 Form 10-K - There have been no material changes to the Company's market risk as described in the 2024 10-K[135](index=135&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) The Company's Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of August 2, 2025, and no material changes to internal control over financial reporting occurred during the quarter - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of August 2, 2025[136](index=136&type=chunk) - No changes in the Company's internal control over financial reporting occurred during the most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[137](index=137&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The Company is involved in various legal proceedings incidental to its normal course of business but does not anticipate any of them to have a material adverse effect on its financial position or results of operations - The Company does not expect any current legal proceedings to have a material adverse effect on its financial position or results of operations[139](index=139&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) This section updates the Company's risk factors, specifically revising the 'Supply Chain and Third-Party Risks' to highlight increased dependencies on vendors, potential disruptions from geopolitical tensions (e.g., U.S.-China trade dispute, tariffs), and the uncertain impact of price increases and reduced demand on profitability - The 'Supply Chain and Third-Party Risks' section has been revised to emphasize dependence on vendors, potential disruptions from geopolitical tensions, and the impact of price increases and reduced demand[140](index=140&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) - New tariffs imposed by the Trump Administration on products from over 90 countries, including China, are expected to lead to strategic price increases across product categories, with uncertain impacts on gross margin and consumer demand[144](index=144&type=chunk) - The Company is evaluating sourcing options and working with vendors to mitigate tariff impacts, but these strategies may not be effective or timely[147](index=147&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides details on the Company's common stock repurchases during the second quarter of 2025 under its existing share repurchase program - The Company repurchased **3,965 thousand shares** of common stock at an average price of **$12.61** per share during the period of July 6, 2025 - August 2, 2025[150](index=150&type=chunk) - As of August 2, 2025, **$1,224 million** remained available under the **$2,000 million** share repurchase program authorized on February 22, 2022[150](index=150&type=chunk) [Item 5. Other Information](index=31&type=section&id=Item%205.%20Other%20Information) This section includes cautionary statements regarding forward-looking information, outlining various risks and uncertainties that could affect future results, and confirms that no directors or officers engaged in Rule 10b5-1 or non-Rule 10b5-1 trading arrangement changes during the quarter [Forward-Looking Statements](index=31&type=section&id=Forward-Looking%20Statements) - The report contains forward-looking statements subject to various risks and uncertainties, including the Company's ability to successfully implement its 'A Bold New Chapter' strategy, competitive pressures, and changes in economic conditions[151](index=151&type=chunk)[154](index=154&type=chunk) - Key risks include supply chain disruptions, labor shortages, wage pressures, rising inflation, geopolitical conditions, trade restrictions, tariffs, and the impact of weather and natural disasters[151](index=151&type=chunk)[154](index=154&type=chunk) [Trading Arrangements](index=32&type=section&id=Trading%20Arrangements) - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the fiscal quarter ended August 2, 2025[153](index=153&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including indentures, certifications from the CEO and CFO, and the iXBRL formatted financial statements - Key exhibits include the Indenture for Macy's Retail Holdings, LLC's **7.375%** Senior Notes due 2033, certifications of the Chief Executive Officer and Chief Financial Officer, and the iXBRL formatted financial statements[157](index=157&type=chunk) SIGNATURES [SIGNATURES](index=34&type=section&id=SIGNATURES) The report is duly signed on behalf of Macy's, Inc. by Tracy M. Preston, Chief Legal Officer and Corporate Secretary, and Paul Griscom, Senior Vice President and Controller, dated September 10, 2025 - The report was signed by Tracy M. Preston, Chief Legal Officer and Corporate Secretary, and Paul Griscom, Senior Vice President and Controller[160](index=160&type=chunk) - The signing date of the report is September 10, 2025[161](index=161&type=chunk)

Company Overview - Bluemercury's CEO, Maly Bernstein, is departing the company, with her last day being September 26, 2023 [1] - A successor has not yet been named, and Bernstein's next career move is currently unknown [2] Growth Strategy - Bernstein was instrumental in developing Bluemercury's growth strategy, which included plans for 30 new store openings and 30 remodels over the next three years [3] - The brand's focus has expanded beyond skin care and makeup to include fragrances and wellness products, featuring brands like Vyrao and House of Bō, as well as supplements from Biocol Labs and Act + Acre [3] Financial Performance - Bluemercury reported a 3% increase in net sales and a 1.2% rise in comparable sales during the second quarter, despite a decline in consumer sentiment towards luxury beauty [4] - The growth was driven by dermatological skin care and new product launches from brands such as Byredo, Victoria Beckham Beauty, and Charlotte Tilbury [4] Leadership and Future Direction - Under Bernstein's leadership, Bluemercury achieved 18 consecutive quarters of comparable sales growth, and the current CEO of Bloomingdale's, Olivier Bron, plans to maintain the existing strategy without immediate changes [5][6] - Bron emphasized the positive customer response to Bluemercury's aspirational-to-luxury positioning and curated assortments, indicating a commitment to continue building on the brand's momentum [6]

Group 1 - Macy's is celebrating the 40th anniversary of its ready-to-wear brand I.N.C., highlighting its legacy in fashion and trends [1] - To commemorate this milestone, Macy's has partnered with award-winning CFDA designer Christian Siriano, who will serve as the Creative Director and Curator for the fall fashion collection [1] - The new collection aims to celebrate decades of glamour, confidence, and fashion authority, honoring the brand's heritage while looking forward to its future [1]

Core Insights - Macy's stock has increased by 37% over the past month, but its operating performance and financial situation appear poor, with significant risks tied to economic downturns and reliance on discretionary spending [2] Financial Performance - In Q2 2025, Macy's reported revenue of $5.6 billion, a 4% decrease year-over-year, with net income at $210 million, down 22%, and adjusted EBITDA at $480 million, also lower than the previous year [3] - Free cash flow decreased to $120 million due to declining sales trends and increased promotional efforts [3] - The balance sheet shows $3.9 billion in debt against $800 million in cash, limiting financial flexibility [3] Valuation - Macy's trades at a price-to-earnings ratio of 8.1, significantly lower than the S&P 500's 23.9, and has a free cash flow multiple of 17.8 compared to the S&P 500's 21 [4] Growth Trends - Over the last three years, Macy's revenues have declined at an average annual rate of -4.4%, while the S&P 500 grew at 5.3% [5] - In the past twelve months, sales fell by -3.8% from $24 billion to $23 billion, with a recent quarterly revenue decrease of -4.1% year-over-year to $4.8 billion [5] Profitability - Macy's operating income for the past year was $879 million, yielding a 3.9% margin, with net income at $558 million and a 2.4% margin, all below S&P 500 averages [6] Financial Stability - Macy's has a high debt-to-equity ratio of 124.9%, significantly above the S&P 500 average of 20.5%, and cash constitutes only 5.8% of total assets compared to the index's 7.2% [7] Economic Resilience - Macy's stock has underperformed the S&P 500 during economic downturns, with a 71.7% drop during the 2022 inflation crisis compared to a 25.4% decline in the S&P 500 [8] - During the 2020 Covid pandemic, Macy's stock fell 75.5%, while the S&P 500 experienced a peak-to-trough decline of 33.9% [8] Investment Appeal - Despite low valuation, Macy's combination of weak growth and profitability makes the stock less appealing to investors [9]

Group 1 - Barclays raised the target price for Macy's from $12 to $15 while maintaining a "hold" rating [1]

Group 1 - Goldman Sachs raised the target price for Macy's from $13 to $14.5 while maintaining a "Neutral" rating [1]

Group 1: NIO (NIO.US) - The core viewpoint is that NIO's performance in the first half of 2025 shows signs of recovery, with sales and revenue growth, but losses persist [1] - Total revenue reached 31.043 billion yuan (approximately 4.333 billion USD), marking a 13.5% increase year-on-year [2] - Vehicle deliveries amounted to 114,200 units, reflecting a 30.6% year-on-year growth [2] - Net loss expanded to 11.745 billion yuan (approximately 1.64 billion USD), an increase of 1.515 billion yuan compared to the previous year [2] - Comprehensive gross margin improved to 9.07%, up 1.11 percentage points [2] - Cash reserves increased to 27.2 billion yuan by the end of Q2, a rise of 1.2 billion yuan quarter-on-quarter [2] - R&D expenditure in Q2 was 3.01 billion yuan, down 6.6% year-on-year [2] - The strong rebound in Q2 was driven by a 71.2% quarter-on-quarter increase in delivery volume and the initial success of a multi-brand strategy [3] - The gross margin recovery is attributed to cost reductions from self-developed technologies and product structure optimization [3] - CEO Li Bin stated that the cash flow is sufficient to support operations for the next 12 months [3] - The company faces challenges with ongoing losses, high operational costs, and a debt ratio of 93.39% [4] - Li Bin set ambitious targets for Q4, aiming for monthly deliveries of 50,000 vehicles and achieving breakeven [5][6] - Long-term goals include achieving a 20% gross margin and profitability by 2026, with a focus on scaling operations to reduce costs [6] Group 2: Salesforce (CRM.US) - Salesforce's Q2 2025 revenue and profit exceeded market expectations, but the Q3 revenue guidance was conservative, leading to a post-earnings stock decline [9] - Q2 revenue reached 10.24 billion USD, a nearly 10% year-on-year increase, marking the first near double-digit growth in six quarters [10] - Adjusted EPS was 2.91 USD, up nearly 14%, significantly surpassing expectations [10] - Remaining performance obligations (RPO) grew to 29.4 billion USD, an 11% year-on-year increase, indicating stable market demand [10] - The Q3 revenue guidance is slightly below expectations, projected between 10.24 billion and 10.29 billion USD, reflecting a growth of 8% to 9% [12] - Salesforce raised its full-year revenue guidance to between 41.1 billion and 41.3 billion USD, aligning with analyst expectations [12] - Despite exceeding expectations, the stock has declined approximately 23% year-to-date, with concerns about short-term growth slowing [13] Group 3: Macy's (M.US) - Macy's Q2 2025 results significantly surpassed market expectations, with a notable turnaround in same-store sales [15] - Total revenue was 5 billion USD, exceeding the 4.9 billion USD market expectation [16] - Same-store sales grew by 1.9%, marking the highest growth rate in nearly 12 quarters [17] - The company's multi-brand strategy, particularly the performance of Bloomingdale's and Bluemercury, contributed to growth [17] - Inventory management improved, with a 0.8% year-on-year decrease in inventory [18] - Despite revenue exceeding expectations, net profit fell by 42% year-on-year, and gross margin declined from 40.5% to 39.7% [19] - The company faces macroeconomic pressures, including tariffs and cautious consumer spending [19] - Macy's raised its full-year revenue guidance based on strong Q2 performance [20] - Following the earnings release, Macy's stock surged by 20.68% [21] Group 4: Broadcom (AVGO.US) - Broadcom's Q3 2025 results significantly exceeded market expectations, driven by explosive growth in AI-related business [23] - Total revenue reached 15.95 billion USD, a 22% year-on-year increase [24] - AI business revenue surged by 63% to 5.2 billion USD, accounting for nearly one-third of total revenue [24] - Adjusted EPS was 1.69 USD, a 36.3% increase [24] - Free cash flow reached a record 7 billion USD, up 47% year-on-year [24] - The company provided an optimistic revenue outlook for Q4, projecting 17.4 billion USD, above Wall Street expectations [28] - Broadcom is collaborating with major clients to develop AI training and inference acceleration chips, aiming to capture market share [28] - Following the earnings announcement, Broadcom's stock rose nearly 5% [29] Group 5: Lululemon (LULU.US) - Lululemon's Q2 2025 results were mixed, with earnings exceeding expectations but revenue falling short [31] - Revenue was 2.53 billion USD, slightly below the 2.54 billion USD market expectation, reflecting a 7% year-on-year increase [32] - Comparable store sales grew by 1%, below the expected 3.7% [32] - The Americas market faced challenges, with comparable sales down 4% due to increased competition and a slowing growth environment [33] - International markets, particularly China, showed strong performance with a 15% increase in comparable sales [33] - The company has adjusted its product strategy and marketing efforts to address market challenges [34] - Lululemon lowered its full-year revenue guidance due to weak North American demand and increased tariffs impacting margins [35] - Following the earnings release, Lululemon's stock dropped over 15% [36]

Core Insights - The session is part of the Goldman Sachs 32nd Annual Global Retailing Conference, focusing on the retail sector [1] Company Overview - Macy's is represented by Tony Spring, Chairman and CEO, and Tom Edwards, COO and CFO [1]