Core Insights - Macy's, Inc. reported second-quarter fiscal 2025 results with both top and bottom lines exceeding Zacks Consensus Estimates, although both metrics declined compared to the previous year [1][10] - Comparable sales increased, marking the strongest growth in 12 quarters, prompting the company to raise its fiscal 2025 outlook [1][10] Financial Performance - Adjusted earnings were 41 cents per share, surpassing the consensus estimate of 19 cents, but down 22.6% from 53 cents in the prior year [3] - Net sales reached $4,812 million, exceeding the consensus estimate of $4,718 million, but down 2.5% year over year [4] - Comparable sales increased by 0.8% on an owned basis and 1.9% on an owned-plus-licensed-plus-marketplace basis [4] Brand Performance - Macy's brand comps increased by 0.4% on an owned basis and 1.2% on an owned-plus-licensed-plus-marketplace basis [6] - Bloomingdale's brand comps rose by 3.6% on an owned basis and 5.7% on an owned-plus-licensed-plus-marketplace 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 - Gross margin was 39.7%, meeting estimates but down 80 basis points year over year due to markdowns and prior tariff impacts [7] - Selling, general and administrative (SG&A) expenses were $1.94 billion, down 1.5% year over year, but SG&A as a percentage of total revenues increased to 38.9% [8][9] Guidance and Outlook - The company raised its fiscal 2025 net sales outlook to between $21.15 billion and $21.45 billion, up from the previous range of $21 billion to $21.4 billion [10][16] - Comparable owned-plus-licensed-plus-marketplace sales are projected to decline between 1.5% to 0.5% year over year [16] - Adjusted earnings per share guidance was increased to a range of $1.70 to $2.05, compared to the prior range of $1.60 to $2.00 [17] Financial Snapshot - As of the end of the second quarter, the company had cash and cash equivalents of $829 million, long-term debt of $2.43 billion, and shareholders' equity of $4.45 billion [12] - Merchandise inventories declined by 0.8% year over year [12] - The company repurchased 4 million shares for $50 million during the quarter, with $1.2 billion remaining under its $2 billion share repurchase authorization [13]

A Macy's store in Los Angeles, California, US, on Tuesday, Aug. 15, 2023.. Photographer: Eric Thayer/Bloomberg© 2023 Bloomberg Finance LPThis morning Macy’s beat quarterly earnings expectations and raised its guidance, sending its shares up dramatically in early trading.Now, some 18 months into the department store’s “Bold New Chapter,” it’s worth asking the question: Is this clear evidence that the new strategy is starting to work?Based upon what we learned today, my more charitable answer is somewhere bet ...

Core Viewpoint - Macy's is focusing on high-income households to drive its recovery and has reported better-than-expected second-quarter net sales of $4.8 billion, surpassing Wall Street estimates [1][2]. Group 1: Customer Demographics - More than 50% of Macy's customers come from households earning over $100,000, indicating a shift towards higher-income consumers [3]. - The company has seen a healthier performance in higher income tiers, while exposure to lower income levels has decreased significantly [3]. Group 2: Product Offering and Customer Experience - Macy's is introducing new brands such as Abercrombie Kids, Sam Edelman, Hugo Boss, and Good American to attract customers [4]. - The sales growth is occurring across all its brands, including Bloomingdale's and Bluemercury, as the company aims to improve customer experience by reimagining 125 Macy's locations and enhancing product selection [9]. Group 3: Pricing Strategy and Market Position - The company has begun raising prices on certain items in response to tariffs, although it is too early to assess consumer reactions to these price hikes [10]. - Macy's strategy includes offering a wide range of price points, from off-price to luxury, to avoid reliance on a single market segment [12]. Group 4: Historical Context and Future Outlook - In recent years, Macy's has faced challenges such as slumping sales and store closures, but it has declined a buyout offer, opting instead to focus on its turnaround strategy [11].

Core Insights - Macy's Inc. experienced its strongest comparable sales growth in 12 quarters during the second quarter, with positive performance across its three department store brands: Macy's, Bloomingdale's, and Bluemercury [1][4]. Group 1: Sales Performance - The Macy's nameplate recorded a year-over-year growth in comparable sales of 1.2% across all stores and 1.5% at go-forward stores, which are those not planned for closure [4]. - Bloomingdale's achieved a 5.7% increase in comparable sales, marking its fourth consecutive quarter of growth, while Bluemercury reported a 1.2% increase, its 18th consecutive quarter of gains [6]. Group 2: Strategic Initiatives - The company's growth is attributed to "substantive enterprise-wide improvements" under its "A Bold New Chapter" strategy, which aims to modernize operations and enhance customer experience [2][3]. - The strategy includes closing underperforming locations and investing in areas with growth potential, leading to a more focused and profitable store base [5]. Group 3: Future Outlook - Macy's Inc. raised its 2025 guidance for comparable sales to a range of down 1.5% to down 0.5%, an improvement from the previous guidance of down 2% to down 0.5% [7]. - The company acknowledges the resilience of its customer base but remains cautious about potential impacts from tariffs on demand, suggesting a more selective consumer behavior in future guidance [8].

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Core Insights - Macy's, Inc. has experienced a decline of 13% in its stock value over the past year, but reported strong quarterly results that led to a stock increase of over 10%, reaching its highest level in months [1] Group 1 - The company has been focusing on turnaround strategies that are beginning to show positive results [1] - The recent quarterly performance indicates a potential shift in investor sentiment towards Macy's, suggesting a recovery phase [1]

Market Overview - Stocks ended August higher but showed weakness towards the end of the month, with the S&P 500 falling 0.7% and the Nasdaq Composite losing 0.8% [2] - Broader selling was observed across stocks, bonds, and cryptocurrencies [2] Economic Concerns - Recent market weakness is attributed to concerns over global debt and inflation, with 30-year bond yields nearing 5% and 10-year yields around 4.27% [3] - There are worries about governments' ability to manage rising debt levels without triggering inflation, creating a divergence where the bond market signals higher rates while equity markets anticipate a rate cut [3] Employment Trends - Companies reported higher profitability levels that outpaced revenue gains, with hiring slowing and layoffs occurring, potentially due to AI filling entry-level roles [5] - This trend indicates a shift towards greater efficiency with fewer workers, enhancing profitability but reducing job opportunities [5] Corporate Developments - Kraft and Heinz will split into two separate companies after a decade of merger, as shares have fallen 45% since the merger [7] - Macy's shares rose over 10% in premarket trading after the company raised its full-year guidance, contrasting with trends seen in other retailers [9] Antitrust Ruling - A judge ruled in the government's antitrust case against Alphabet, allowing the company to maintain its Google Chrome browser and continue payments to Apple, which account for 5% of Apple's revenues [6] Historical Context - The period from Memorial Day to Labor Day saw equities perform their best in forty years, suggesting potential positive trends for the remainder of the year [10] - However, September has historically been the worst-performing month for equities, averaging a 2% loss, indicating potential volatility but also opportunities for recovery later in the year [10]

Financial Data and Key Metrics Changes - Macy's Inc. achieved comparable sales growth of 1.9%, marking the strongest performance in 12 quarters, with adjusted EPS of $0.41 exceeding guidance of $0.15 to $0.20 [5][20][24] - Net sales were $4.8 billion, down 2.5% year-over-year, primarily due to the closure of 64 non-GoForward stores, but excluding this impact, sales grew by 0.9% [20][21] - Gross margin was 39.7% of net sales, slightly better than expectations, but down from 40.5% last year, influenced by proactive markdowns and tariff impacts [22][23] Business Line Data and Key Metrics Changes - Macy's comparable sales grew by 1.2%, with GoForward Macy's achieving 1.5% growth, and Reimagined 125 locations up 1.4% [8][21] - Bloomingdale's reported a 5.7% increase in comparable sales, achieving its highest second quarter sales and net promoter score on record [11][12] - Bluemercury experienced a 1.2% growth in comparable sales, marking its 18th consecutive quarter of gains, driven by skincare and recent brand launches [14] Market Data and Key Metrics Changes - The consumer remained resilient through the first half of the year, with a cautious outlook due to tariff uncertainties impacting demand [15][26] - The company anticipates a 40 to 60 basis point tariff impact on gross margin for the full year, compared to a previous expectation of 20 to 40 basis points [16][28] Company Strategy and Development Direction - The "Bold New Chapter" strategy focuses on enhancing customer experience, improving product offerings, and leveraging a multi-brand, multi-channel approach [5][11] - The company aims to close underperforming locations while investing in growth opportunities, particularly in the GoForward business and digital channels [11][16] - Macy's is expanding its private brand portfolio, which is expected to drive differentiation and improve margins [55] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the consumer's resilience, noting strong sales in various categories and a healthy start to the back-to-school season [35][48] - The company is focused on navigating the macroeconomic environment while continuing to invest in growth initiatives [26][90] - Management highlighted the importance of maintaining a balance between leveraging SG&A and driving growth [92] Other Important Information - The company returned $251 million to shareholders through dividends and share repurchases, with approximately $1.2 billion remaining on its share buyback authorization [25] - The balance sheet remains strong, with $829 million in cash and a net long-term debt reduction of approximately $340 million [25] Q&A Session Summary Question: Can you rank the drivers of sequential improvement in same-store sales? - Management noted strong growth across various categories, with July being the strongest month, driven by a healthy start to back-to-school shopping [34][35] Question: What learnings have come from the Reimagined 125 stores? - Positive performance was noted, with local empowerment and improved staffing contributing to better customer experiences and net promoter scores [40][42] Question: How is the company addressing tariff impacts on pricing? - Management is taking a surgical approach to pricing, negotiating with suppliers, and adjusting prices selectively based on category and brand [42][43] Question: What is the outlook for the consumer and guidance for the third quarter? - The consumer is viewed as resilient, but management remains cautious due to potential tariff impacts and is monitoring the situation closely [48][49] Question: How is the company planning to grow its private brands? - The company is reimagining its private brands and has seen positive initial responses, with plans for further growth and differentiation [52][55] Question: What are the expectations for SG&A improvements? - Management expects continued SG&A savings while reinvesting in growth initiatives, with a focus on leveraging expenses in the long term [60][61]

Financial Data and Key Metrics Changes - Macy's Inc. achieved comparable sales growth of 1.9%, with adjusted EPS of $0.41, exceeding guidance of $0.15 to $0.20 [5][18][23] - Net sales were $4.8 billion, down 2.5% year-over-year, primarily due to the closure of 64 non-GoForward stores [18][19] - Gross margin was 39.7% of net sales, slightly better than expectations, impacted by proactive markdowns and tariffs [21][22] Business Line Data and Key Metrics Changes - Macy's brand achieved 1.2% comparable sales growth, driven by GoForward locations which rose 1.5% [6][19] - Bloomingdale's reported a 5.7% increase in comparable sales, marking its fourth consecutive quarter of growth [11][12] - Bluemercury achieved 1.2% comparable sales growth, its 18th consecutive quarter of gains, driven by skincare and new brand launches [13][14] Market Data and Key Metrics Changes - The luxury market remains competitive, but Bloomingdale's is gaining market share through brand expansions and digital growth [12][81] - The consumer remains resilient, with a notable portion of Macy's customer base earning over $100,000 household income [47][48] Company Strategy and Development Direction - The "Bold New Chapter" strategy focuses on enhancing customer experience, expanding product offerings, and optimizing operations [5][14] - The company is investing in Reimagined 125 stores, which have shown positive performance and customer satisfaction [40][41] - Future growth will be supported by expanding private brands and leveraging partnerships with market brands [52][56] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the consumer's resilience but remains prudent due to potential tariff impacts [14][46] - The company anticipates a tariff impact of 40 to 60 basis points on gross margin, adjusting pricing strategies accordingly [25][42] - The outlook for the third quarter and full year includes a cautious view on consumer demand and potential impacts from tariffs [24][25] Other Important Information - The company returned $251 million to shareholders through dividends and share repurchases, with $1.2 billion remaining on the buyback authorization [23][24] - Management emphasized the importance of maintaining a healthy balance sheet and liquidity profile to navigate market challenges [29] Q&A Session Summary Question: Drivers of sequential improvement in same-store sales - Management noted strong growth across various categories, with July being the strongest month, driven by back-to-school shopping [33][34] Question: Learnings from Reimagined 125 stores and expansion plans - Positive performance was noted in both the first and next 75 Reimagined stores, with local empowerment being a key factor [39][40] Question: Consumer sentiment and pricing strategies amid tariffs - Management sees the consumer as resilient but choiceful, with a cautious approach to pricing adjustments based on category performance [46][47] Question: SG&A savings and growth opportunities - SG&A was down nearly $30 million, with continued savings expected in the second half while reinvesting in growth initiatives [60][61] Question: Impact of tariffs on gross margin and future guidance - Tariffs had a notable impact in Q2, with management focused on mitigation strategies and maintaining competitive pricing [80][83] Question: Investments in service and balancing growth with SG&A leverage - Management is committed to investing in customer-facing initiatives while managing costs effectively to drive growth [94][95]

Financial Data and Key Metrics Changes - Macy's Inc. achieved comparable sales growth of 1.9%, with adjusted EPS of $0.41, exceeding guidance of $0.15 to $0.20 [5][6][23] - Net sales were $4.8 billion, down 2.5% year-over-year, primarily due to the closure of 64 non-GoForward stores [18][19] - Gross margin was 39.7% of net sales, slightly better than expectations, impacted by proactive markdowns and tariffs [21][22] Business Line Data and Key Metrics Changes - Macy's comparable sales grew by 1.2%, driven by GoForward Macy's which rose 1.5% [6][19] - Bloomingdale's achieved a 5.7% increase in comparable sales, marking its fourth consecutive quarter of growth [11][12] - Bluemercury reported a 1.2% increase in comparable sales, its 18th consecutive quarter of gains [13] Market Data and Key Metrics Changes - The luxury segment, particularly Bloomingdale's, is gaining market share, with strong performances in ready-to-wear, fine jewelry, and fragrances [12][81] - The overall consumer remains resilient, with a notable portion of Macy's customer base earning over $100,000 household income [47] Company Strategy and Development Direction - The "Bold New Chapter" strategy focuses on enhancing customer experience, improving product offerings, and leveraging a multi-brand, multi-channel approach [5][14] - The company is committed to closing underperforming locations while investing in growth areas, particularly in the GoForward business and digital initiatives [11][15] - Future growth will be supported by expanding private brands and enhancing partnerships with existing brands [52][56] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the consumer's resilience but acknowledged the uncertainty surrounding tariffs and their impact on demand [14][46] - The company plans to reinvest savings from closed stores into initiatives that support long-term growth aspirations [25][29] - Management remains focused on maintaining a healthy balance sheet and improving operational efficiencies [24][29] Other Important Information - The company recognized $16 million in asset sale gains during the quarter [22] - Year-to-date operating cash flow was $255 million, significantly improved from $137 million last year [23] Q&A Session Summary Question: Drivers of sequential improvement in same-store sales - Management noted strong growth across various categories, with July being the strongest month, driven by back-to-school shopping [33][34] Question: Learnings from Reimagined 125 stores and expansion plans - Positive performance was noted in both the first and next 75 Reimagined stores, with local empowerment being a key factor [39][40] Question: Consumer sentiment and pricing strategies amid tariffs - Management indicated a cautious approach to pricing, with surgical price increases based on category and brand performance [41][42] Question: SG&A savings and growth opportunities - SG&A was down nearly $30 million, with continued focus on cost management while reinvesting in growth initiatives [60][61] Question: Bloomingdale's performance amid luxury market pressures - Bloomingdale's has maintained growth and market share, with strong leadership and strategic brand partnerships [81][82] Question: Tariff impacts and mitigation strategies - Tariffs had a notable impact in Q2, with management focused on mitigating future impacts through negotiations and strategic sourcing [83][84] Question: Investments in service and SG&A leverage - Management emphasized the importance of balancing investments in customer-facing initiatives with maintaining operational efficiency [95][96]