Summary of Macy's, Inc. Conference Call Company Overview - **Company**: Macy's, Inc. - **Key Executives**: Tom Edwards (Chief Operating Officer and Chief Financial Officer) Key Points and Arguments Bold New Chapter Strategy - Macy's is undergoing a transformation through the "bold new chapter" strategy, focusing on strengthening the Macy's nameplate and modernizing operations [1][2] - The strategy includes three main elements: 1. **Strengthening the Macy's Nameplate**: Reinvestment in staffing and merchandising, exemplified by the "Reimagine 125" initiative [4][5] 2. **Accelerating Luxury Business**: Bloomingdale's has seen four consecutive quarters of comp growth, with plans to expand its footprint [5][16] 3. **End-to-End Modernization**: Simplifying supply chain and back-office functions to drive efficiencies and improve customer service [6][7] Financial Performance - Q2 results showed significant growth, with the best performance in 12 quarters, including increased comps for Macy's and Bloomingdale's [3][29] - Adjusted EBITDA and top-line growth exceeded expectations, with Bloomingdale's growing almost 6% comp and Bluemercury around 2% [3][4] - The company is focused on maintaining a strong balance sheet, with no debt maturities until 2030 and a consistent dividend of approximately $50 million per quarter [30][31] Consumer Insights - The consumer has shown resilience despite macroeconomic challenges, with higher-end and middle-tier consumers performing better than lower-tier [8][9] - Macy's is prepared for a more selective consumer in the second half of the year, with clean inventories and a focus on new products [9][10] - The company has embedded a tariff impact of 40 to 60 basis points into its guidance, but has not seen significant consumer impact yet [10][11] Digital and Physical Presence - Macy's operates approximately 500 stores, with plans to reduce the fleet to around 350 by closing underperforming locations [15][16] - Digital presence is critical, with recent website revamps and investments in digital capabilities to enhance customer engagement [15][16] - The loyalty program is integrated with data analytics to better understand consumer preferences and improve communication [19][20] Private Label and Brand Strategy - Private label brands are seen as a growth opportunity, with historical margins being higher due to direct partnerships [21][22] - The company aims to fill market gaps with new private label offerings across all brands [21][22] Competitive Environment - The competitive landscape is evolving, with a focus on customer-led strategies rather than operationally led [26][27] - High net promoter scores indicate improved customer satisfaction and service quality [27][28] Future Outlook - The company anticipates continued growth, with a focus on customer service, brand expansion, and operational efficiencies [46] - Revenue growth is expected to be in the low single-digit range, with mid-single-digit EBITDA growth over the long term [46] AI and Technology Integration - AI is viewed as a significant asset for enhancing personalization, demand planning, and inventory management [35][36] - The company is in the early stages of integrating AI into various operational areas to improve efficiency and customer service [35][36] Additional Important Insights - The emphasis on hospitality and customer service is a key differentiator for Macy's, with investments in staffing and training to enhance the shopping experience [28][37] - The company is leveraging its scale and multi-channel approach to respond effectively to consumer needs and market trends [24][25] This summary encapsulates the critical insights and strategic directions discussed during the conference call, highlighting Macy's commitment to transformation and growth in a competitive retail environment.

Core Insights - Macy's summer giving campaign raised over $2 million to support youth literacy and mental health initiatives through partnerships with Reading Is Fundamental (RIF) and the National Alliance on Mental Illness (NAMI) [1][3][8] - The funds will be allocated to enhance literacy resources and mental health education for children in under-resourced communities [3][8] Campaign Overview - The campaign is part of Macy's social commitment, Mission Every One, focusing on empowering youth and supporting educators and community leaders [1][5] - Macy's has partnered with RIF and NAMI to provide critical resources for literacy and mental health, benefiting students as they prepare for the school year [5][6] Advocate for Youth Awards - The Advocate for Youth Awards were launched to honor teachers and community leaders who promote literacy and mental health [4][6] - Events included read-aloud sessions, book donations, and school supply donations to recognize the contributions of educators [4][7] Impact Statistics - Since 2003, Macy's and RIF have raised over $48 million, providing more than 17 million books and literacy resources [8] - Since 2022, Macy's has raised over $3.3 million for NAMI, supporting nearly 600,000 youth in mental health programs [8]

Group 1 - Macy's Inc. is considered one of the most undervalued retail stocks, with Morgan Stanley raising its price target to $16 from $12 while maintaining an Equal Weight rating [1] - Evercore ISI maintained a Hold rating on Macy's with a price target of $14, while Telsey Advisory raised its price target to $17 from $14, maintaining a Market Perform rating [3] - Macy's operates as an omnichannel retail store managing three brands: Macy's, Bloomingdale's, and Bluemercury, selling a variety of merchandise across 43 US states, the District of Columbia, Guam, and Puerto Rico [4]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum if future growth does not justify high valuations [1] - Identifying the right entry point for fast-moving stocks is challenging, and traditional momentum parameters may not always be reliable [1] Group 2: Bargain Stocks with Momentum - Investing in bargain stocks that have recently shown price momentum may be a safer strategy [2] - The Zacks Momentum Style Score is useful for identifying strong momentum stocks, while the 'Fast-Paced Momentum at a Bargain' screen helps find attractively priced fast-moving stocks [2] Group 3: Macy's Stock Analysis - Macy's (M) has shown a price increase of 5.1% over the past four weeks, indicating growing investor interest [3] - The stock has gained 45.3% over the past 12 weeks, demonstrating sustained positive momentum [4] - Macy's has a beta of 1.78, suggesting it moves 78% more than the market in either direction [4] - The stock has a Momentum Score of B, indicating a favorable time to invest [5] Group 4: Earnings Estimates and Valuation - Macy's has received a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which attract more investor interest [6] - The stock is trading at a Price-to-Sales ratio of 0.22, indicating it is relatively cheap at 22 cents for each dollar of sales [6] - This favorable valuation suggests that Macy's has significant potential for further price appreciation [7]

Core Insights - Macy's shares have increased by approximately 5.5% since the last earnings report, outperforming the S&P 500 [1][2] Financial Performance - Macy's reported Q2 fiscal 2025 adjusted earnings of $0.41 per share, exceeding the Zacks Consensus Estimate of $0.19, but down 22.6% from $0.53 in the previous year [3] - Net sales reached $4,812 million, surpassing the consensus estimate of $4,718 million, although this represents a 2.5% decline from the same quarter last year [4] - Comparable sales increased by 0.8% on an owned basis and 1.9% on an owned-plus-licensed-plus-marketplace basis year-over-year [4] - Net credit card revenues were $153 million, up 22.4% year-over-year, accounting for 3.2% of sales, an increase of 70 basis points from the previous year [5] Brand Performance - Macy's brand comps rose 0.4% year-over-year on an owned basis, while Bloomingdale's saw a 3.6% increase on an owned basis, marking its fourth consecutive quarter of growth [6] - Bluemercury brand comps increased by 1.2% on an owned basis, achieving its 18th consecutive quarter of growth [6] Margins and Expenses - The gross margin for Q2 was 39.7%, down 80 basis points from the previous year due to markdowns and prior tariff impacts [7] - Selling, general and administrative (SG&A) expenses totaled $1.94 billion, a decrease of 1.5% year-over-year, but SG&A as a percentage of total revenues increased to 38.9% [8] EBITDA and Cash Flow - Adjusted EBITDA was reported at $393 million, down 10.3% from $438 million in the prior year, with an adjusted EBITDA margin of 7.9% [9] - The company ended the quarter with cash and cash equivalents of $829 million and long-term debt of $2.43 billion [10] Guidance and Outlook - Macy's updated its FY25 guidance, projecting net sales between $21.15 billion and $21.45 billion, an increase from the previous range of $21 billion to $21.4 billion [11] - Comparable owned-plus-licensed-plus-marketplace sales are expected to decline by 1.5% to 0.5% year-over-year, with adjusted earnings per share projected between $1.70 and $2.05 [12] Market Sentiment - Since the earnings release, there has been a 26.89% upward shift in consensus estimates, indicating positive market sentiment [13] - Macy's holds a Zacks Rank 1 (Strong Buy), suggesting expectations for above-average returns in the coming months [15] Industry Context - Macy's operates within the Zacks Retail - Regional Department Stores industry, where competitor Kohl's reported a revenue decline of 5% in its last quarter [16]

Core Insights - The article provides a comprehensive analysis of Amazon.com and its competitors in the Broadline Retail industry, focusing on financial metrics, market position, and growth prospects to offer insights for investors [1] Company Overview - Amazon.com 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 33.47, which is 0.78x lower than the industry average, indicating potential for growth at a reasonable price [5] - The Price to Book (P/B) ratio of 7.02 is 1.08x higher than the industry average, suggesting the company may be overvalued based on book value [5] - Amazon's Price to Sales (P/S) ratio of 3.53 is 1.56x the industry average, indicating potential overvaluation in relation to sales performance [5] - The Return on Equity (ROE) stands at 5.68%, slightly above the industry average, reflecting efficient use of equity to generate profits [5] - Amazon's EBITDA is $36.6 billion, which is 5.91x above the industry average, demonstrating stronger profitability and cash flow generation [5] - The gross profit of $86.89 billion is 5.23x above the industry average, indicating robust earnings from core operations [5] - Revenue growth of 13.33% surpasses the industry average of 10.76%, showcasing exceptional sales performance [5] Debt-to-Equity Ratio - Amazon's debt-to-equity (D/E) ratio is 0.4, indicating a stronger financial position compared to its top four peers, as it relies less on debt financing [10] - The D/E ratio is a crucial measure for assessing financial structure and risk profile, aiding in informed decision-making [7] Summary of Competitive Position - Amazon's lower P/E ratio compared to peers suggests potential undervaluation, while high P/B and P/S ratios indicate strong market valuation of its assets and sales [8] - The company outperforms its industry peers in ROE, EBITDA, gross profit, and revenue growth, reflecting strong financial performance and growth potential [8]

Core Insights - Investing in stocks based on valuation metrics, particularly the price-to-sales (P/S) ratio, can identify opportunities with strong upside potential, especially for unprofitable or early-stage companies [1][2][3] Valuation Metrics - The P/S ratio compares a company's market capitalization to its revenues, providing a clearer picture of value when earnings are minimal or volatile [2][5] - A P/S ratio below 1 indicates a good bargain, as investors pay less than a dollar for each dollar of revenue generated [6] - The P/S ratio is preferred over the price-to-earnings (P/E) ratio due to the difficulty of manipulating sales figures compared to earnings [7][10] Investment Opportunities - Low P/S stocks can offer compelling opportunities, often trading below their intrinsic value, making them attractive for investors seeking upside potential [3][10] - Companies with low P/S ratios identified as potential investment opportunities include: - Macy's Inc. (M) [4][12] - Oshkosh Corporation (OSK) [4][14] - Green Dot (GDOT) [4][16] - The Mosaic Company (MOS) [4][18] - PagSeguro Digital (PAGS) [4][20] Company Profiles - **Macy's Inc. (M)**: Undergoing a transformation with its Bold New Chapter program, focusing on digital initiatives and omnichannel retailing, currently has a Value Score of A and Zacks Rank 1 [12][13] - **Oshkosh Corporation (OSK)**: Engaged in custom-built vehicles and equipment, focusing on electrification and innovation, currently has a Value Score of B and Zacks Rank 2 [14][15] - **Green Dot (GDOT)**: A leader in prepaid cards and Banking-as-a-Service, with strong partnerships and a solid balance sheet, currently has a Value Score of A and Zacks Rank 1 [16][17] - **The Mosaic Company (MOS)**: A major producer of phosphate and potash, benefiting from strong demand and cost transformation efforts, currently has a Value Score of A and Zacks Rank 2 [18][19] - **PagSeguro Digital (PAGS)**: Offers a suite of financial solutions in Brazil, focusing on digital banking and innovation, currently has a Value Score of B and Zacks Rank 1 [20][21]

Core Insights - Macy's, Inc. is recognized as one of the top retail dividend stocks, highlighting its strong position in the market [1][4] - The company operates under multiple brands, including Macy's, Bloomingdale's, and Bluemercury, and offers a wide range of products [2] Business Strategy - In recent years, Macy's has focused on upgrading its stores, enhancing its online marketplace, and expanding luxury offerings [3] - Key priorities include creating a seamless connection between digital and in-store shopping, adjusting store footprint based on demand, building unique private-label brands, and controlling costs [3] Financial Performance - Macy's has increased its dividend payouts for four consecutive years, currently paying a quarterly dividend of $0.1824 per share with a dividend yield of 4.32% as of September 22 [4]

NEW YORK--(BUSINESS WIRE)--Macy's, Inc. to Participate in 2025 Global Consumer & Retail Conference. ...

This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Dive Brief: CFOs expect tariffs to have a major impact on price growth at their organizations this year as well as in 2026, according to a quarterly survey of finance chiefs by Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta. On average, price growth would be about 30% lower in 2025 and roughly 25% lower in 2026 without the ...