Core Insights - Agentic AI could represent an estimated $6 billion total cost savings opportunity for major U.S. retailers, potentially boosting profit estimates by up to 20% by 2026 [1][3] - Gap, Macy's, and Victoria's Secret are identified as the top three retailers best positioned to benefit from AI advancements [1] - Wall Street maintains a strong interest in AI-driven margin improvements in the retail sector, which has historically faced challenges with low profits and high inventory levels [2] Cost Savings and Margin Impact - The analysis estimates approximately $6 billion in annual cost savings from agentic AI tools, which include inventory planning, supply chain automation, and automated customer service [3] - If these savings are realized, it could add about 200 basis points to sector margins [3] Skepticism and Practical Applications - There is skepticism regarding the actual implementation and quantification of AI benefits in retail, as noted by Morningstar's senior equity analyst [3][4] - Practical applications of AI in retail include marketing, product recommendations, and inventory management, which could enhance customer targeting and promotion testing [5][6] - Improved demand prediction through AI could reduce markdowns and waste, significantly impacting margins if executed effectively [6] Adoption and Long-term Outlook - While AI adoption is expected to provide some benefits, it is unlikely to transform the retail industry overnight [7]

Core Insights - Seasonal hiring in the retail industry is expected to decline significantly, with projections indicating the addition of under 500,000 positions in Q4 2025, marking the smallest seasonal gain in 16 years and an 8% decrease from the previous year [2][4] Group 1: Hiring Trends - Retailers are facing multiple challenges including tariffs, inflation, and a shift towards automation, which is leading to fewer seasonal hires [3][4] - Major retailers like Target have not disclosed their seasonal hiring plans yet, contrasting with last year when they announced specific hiring numbers [5][6] - Companies such as Spirit Halloween and Bath & Body Works have released their hiring plans, with Spirit planning to hire 50,000 and Bath & Body Works planning to hire 32,000 workers [7][8] Group 2: Economic Indicators - The overall job market has shown signs of slowing, with nonfarm payrolls increasing by only 22,000 in August, significantly below expectations [9][10] - Consumers are under financial pressure due to persistent inflation and high interest rates, which may dampen demand during the holiday season [11] - Reports indicate that consumers plan to spend 5% less on holiday gifts and related expenses this year, marking the first significant drop since 2020 [12]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point, as stocks may lose momentum when their valuations exceed future growth potential [2] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: Macy's Stock Analysis - Macy's (M) has shown significant recent price momentum, with a four-week price change of 36.1%, indicating growing investor interest [4] - Over the past 12 weeks, Macy's stock has gained 58.4%, with a beta of 1.78, suggesting it moves 78% more than the market [5] - Macy's has a Momentum Score of A, indicating a favorable time to invest based on momentum [6] Group 3: 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 [7] - The stock is currently trading at a Price-to-Sales ratio of 0.21, suggesting it is undervalued at 21 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides Macy's, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Core Insights - Macy's Inc. is focusing on its luxury divisions, Bloomingdale's and Bluemercury, as key growth drivers under its Bold New Chapter strategy [1] Financial Performance - In Q2 of fiscal 2025, Bloomingdale's achieved a 4.6% year-over-year increase in net sales and a 5.7% rise in comparable sales, marking record second-quarter sales [2][9] - Bluemercury reported a 1.2% increase in comparable sales, marking its 18th consecutive quarter of growth [2][9] - Nearly half of Macy's customer base earns over $100,000 annually, with Bloomingdale's targeting an even more affluent demographic [6] Strategic Initiatives - Bloomingdale's success is attributed to its unique positioning in the premium contemporary-to-luxury segment, with strong performance across various categories [3] - The new fall campaign "Just Imagine" emphasizes creativity and exclusivity through engaging in-store and digital experiences [4] - Macy's plans to expand Bloomingdale's luxury footprint by adding brands, expanding distribution channels, and opening additional small-format and outlet stores [4] Brand Development - Bluemercury is benefiting from strong demand for dermatological skin care and luxury beauty products, with recent brand introductions reinforcing its high-end beauty destination status [5] - Exclusive collections and new brands have strengthened Macy's luxury strategy and market share [9] Market Positioning - Macy's shares have gained 33.4% in the past month, outperforming the industry's 20.3% growth [8] - Macy's is trading at a forward 12-month price-to-sales ratio of 0.22X, below the industry average of 0.46X [10]

Core Viewpoint - Macy's has shown signs of recovery with its recent quarterly earnings, marking the first sales growth in years, which has positively impacted its stock price by over 25% in two days [2][4]. Company Performance - The company's "Bold New Chapter" turnaround strategy appears to be yielding results, as evidenced by the recent sales growth and the stock price revaluation [3]. - Comparable store sales have increased for the first time in years, contributing to a market capitalization of nearly $5 billion [4]. - Bloomingdale's has reported a 5.7% growth in comparable sales for the recent quarter, while Bluemercury has achieved its eighteenth consecutive quarter of gains [6]. Real Estate and Asset Management - Macy's real estate portfolio is considered valuable, with estimates suggesting it could be worth more than the company's current market capitalization [4]. - Investors have urged the company to leverage its real estate assets and consider spinning off its luxury brands, Bloomingdale's and Bluemercury [5]. - The company is contemplating a sale and leaseback of its real estate portfolio to potentially justify a higher stock price [7]. Historical Context - Macy's has a long history as the largest department store chain in the U.S., with annual sales of $23 billion, but has faced challenges in maintaining customer loyalty due to its acquisition strategy in the past [8][10]. - The company has struggled with customer engagement, but recent efforts indicate a renewed focus on customer-centric strategies [11].

Core Viewpoint - Myriad Uranium Corp. has increased its non-brokered private placement financing from gross proceeds of $125,000 to up to $550,000, issuing up to 2,200,000 units at $0.25 per unit, each comprising one common share and one-half of a common share purchase warrant [1][2]. Group 1: Financing Details - The financing will involve the issuance of units at a price of $0.25, with each unit consisting of one common share and one-half of a warrant, where each full warrant allows the purchase of one share at an exercise price of $0.35 for 24 months [1][2]. - The company plans to use the proceeds from the financing for general working capital [2]. Group 2: Participation and Related Party Transactions - Three board members, including the CEO, will participate in the financing, which is classified as a "related party transaction" under Multilateral Instrument 61-101 [3]. - This participation is exempt from formal valuation and minority shareholder approval requirements as it does not exceed 25% of the company's market capitalization [3]. Group 3: Company Overview - Myriad Uranium Corp. holds a 75% interest in the Copper Mountain Uranium Project in Wyoming, which has historical uranium production and significant exploration potential [5]. - The Copper Mountain project has seen extensive drilling, with approximately 2,000 boreholes drilled and an estimated historical expenditure of C$117 million by Union Pacific for exploration and development [5].

Core Insights - Macy's has launched its "100 Days to Christmas" campaign, featuring the Top 100 Holiday Gifts, a nationwide tour by Santa, exclusive brands, and magical moments [1] Group 1 - The campaign aims to enhance customer engagement and drive sales during the holiday season [1] - The Top 100 Holiday Gifts list is expected to attract consumer interest and boost holiday shopping [1] - Santa's nationwide tour is designed to create memorable experiences for families and promote the Macy's brand [1]

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)