Financial Data and Key Metrics Changes - First quarter net sales reached $4.6 billion, exceeding guidance of $4.4 billion to $4.5 billion [9][29] - Comparable owned plus licensed plus marketplace sales declined by 1.2%, better than the guidance of a decline of 4.5% to 2.5% [9][29] - Adjusted diluted EPS was $0.16, above the guidance range of $0.12 to $0.15, compared to $0.27 last year [11][33] - Gross margin was $1.8 billion or 39.2% of net sales, flat compared to the prior year [32] Business Line Data and Key Metrics Changes - Macy's net sales were down 6.5%, with comparable sales down 2.1% [30] - Bloomingdale's net sales increased by 2.6%, with comparable sales rising by 3.8% [31] - Blue Mercury net sales were up 0.8%, with comparable sales increasing by 1.5% [31] - Backstage outperformed the total Macy's fleet, while Marketplace achieved approximately 40% GMV growth [12] Market Data and Key Metrics Changes - International tourism negatively impacted comparable sales by about 30 basis points [10] - The go-forward business comps outperformed total, declining by 0.9% [10] - The luxury segment showed resilience, with Bloomingdale's and Blue Mercury continuing their positive comp trends [14][15] Company Strategy and Development Direction - The company is focused on its "Bold New Chapter" strategy, emphasizing omni-channel performance and reimagining store locations [8][9] - The strategy includes strengthening Macy's, differentiating luxury offerings, and modernizing operations [15][16] - The company aims to leverage generative AI to modernize its supply chain and improve inventory allocation [9][12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the second quarter, noting improved performance in May compared to earlier months [43][44] - The company is navigating uncertainties related to tariffs and consumer behavior, with a focus on maintaining flexibility in inventory commitments [22][23] - Management highlighted the importance of strategic pricing decisions to offset tariff impacts while remaining competitive [45][46] Other Important Information - The company closed 64 underperforming locations as part of its strategy [25] - The impact of tariffs is estimated to affect annual gross margin by roughly 20 to 40 basis points [20] - The company plans to invest in customer-facing initiatives funded by savings from closed locations [32][38] Q&A Session Summary Question: Sales guidance and consumer pressure - Management reaffirmed annual sales guidance, noting stronger performance in March and April compared to February, with cautious optimism for the rest of the year [43][44] Question: Strategic pricing decisions - Pricing adjustments are being made selectively, with a focus on maintaining value for customers while managing tariff impacts [45][46] Question: Impact of tariffs on pricing and consumer willingness - Pricing is gradually being integrated into the system, with limited increases observed in the second quarter [51][52] Question: Actions to capture market share - The company is enhancing product offerings, improving marketing quality, and enhancing in-store experiences to capture market share [65][66] Question: Reimagine 125 performance and future plans - Management remains optimistic about the Reimagine 125 initiative, with improvements noted in March and May [75][76] Question: SG&A guidance range - The SG&A guidance range provides flexibility to navigate various scenarios amid uncertainty [78][79] Question: Consumer health and category performance - Consumer health remains under pressure, but there is a positive response to newness and value [114][115]

Financial Data and Key Metrics Changes - First quarter net sales reached $4.6 billion, exceeding guidance of $4.4 billion to $4.5 billion, with a decline of 5.1% year-over-year [7][27] - Adjusted diluted EPS was $0.16, above the guidance range of $0.12 to $0.15, compared to $0.27 last year [9][32] - Comparable sales (comps) declined 1.2%, better than the guidance of a decline of 4.5% to 2.5% [7][27] - Gross margin was $1.8 billion or 39.2% of net sales, flat compared to the prior year [31] Business Line Data and Key Metrics Changes - Macy's net sales were down 6.5% with comps down 2.1% [28] - Bloomingdale's net sales increased by 2.6% with comps rising 3.8% [30] - Blue Mercury's net sales were up 0.8% with comps increasing 1.5% [30] - Backstage outperformed full-line stores by several hundred basis points, while Marketplace achieved approximately 40% GMV growth [11] Market Data and Key Metrics Changes - International tourism negatively impacted comps by about 30 basis points [8] - Go forward business comps declined 0.9%, outperforming total comps [8] - The luxury segment showed resilience with Bloomingdale's and Blue Mercury continuing positive comp trends [12][14] Company Strategy and Development Direction - The company is focused on its "Bold New Chapter" strategy, emphasizing omni-channel performance and improving customer experience [6][10] - The strategy includes strengthening and reimagining Macy's, accelerating luxury offerings, and modernizing operations [10][14][15] - The company aims to diversify sourcing to mitigate tariff impacts, reducing reliance on China from over 50% pre-pandemic to 20% currently [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the second quarter, noting improved performance in May compared to earlier months [43][44] - The company anticipates a more choiceful consumer and plans to navigate a competitive promotional landscape [21][34] - Management highlighted the importance of maintaining a healthy inventory to sales ratio while being disciplined with inventory commitments [21][22] Other Important Information - The company closed 64 underperforming locations last year as part of its strategy [24] - Capital expenditures are expected to be approximately $800 million, reflecting a commitment to long-term growth [37] - The company plans to return approximately $152 million to shareholders through dividends and share repurchases [33] Q&A Session Summary Question: Sales guidance and consumer pressure - Management reaffirmed annual sales guidance, noting stronger performance in March and April compared to February, with cautious optimism for the rest of the year [43][44] Question: Strategic pricing decisions - Pricing adjustments are being made selectively, with a focus on maintaining value for consumers while navigating tariff impacts [45][46] Question: Impact of tariffs on pricing - Pricing is gradually being integrated into the system, with limited pricing seen in Q2, and negotiations with vendors are ongoing [50][51] Question: Actions to capture market share - The company is focusing on product diversity, improved marketing, and enhanced in-store experiences to capture market share [59][62] Question: Inventory planning amid tariffs - The company plans to remain disciplined with inventory flow and avoid over-purchasing to mitigate tariff impacts [86][87] Question: Consumer health across income cohorts - Consumer health remains under pressure, but discretionary spending is showing signs of improvement, particularly in categories like fine jewelry [108][110]