Macy's(M) - 2025 FY - Earnings Call Transcript

Financial Data and Key Metrics Changes - For FY 2024, the company achieved net sales of $22.3 billion, with a comparable sales decline of 0.9% versus 2023, an improvement of 510 basis points [15] - GAAP diluted earnings per share were $2.07, while adjusted diluted earnings per share were $2.64 [15] - Operating cash flow reached nearly $1.3 billion, and the company ended the year with $1.3 billion in cash, an increase of $272 million from the prior year [15] Business Line Data and Key Metrics Changes - Macy's saw four consecutive quarters of positive growth at its first 50 reimagined locations, with initiatives including improved staffing and visual merchandising [16][17] - Bloomingdale's returned to positive annual comparable sales growth, achieving the highest fourth quarter in the company's history [18] - Blue Mercury experienced its fourth consecutive year of positive comparable sales, opening 17 new locations and remodeling seven stores [20] Market Data and Key Metrics Changes - The company closed 64 underperforming Macy's stores and one Bloomingdale's location as part of its strategy to rationalize its store portfolio [27] - The company reported a return to positive digital sales growth in the fourth quarter, indicating a recovery in online shopping performance [17] Company Strategy and Development Direction - The "Bolder Chapter" strategy aims to enhance customer experience and create a more agile business, focusing on improving shopping experiences and operational efficiency [16][21] - The company is committed to ongoing board refreshment, with an average board tenure reduced to 4.2 years, down from 5.3 years last year [29] Management's Comments on Operating Environment and Future Outlook - The management acknowledged the current volatility in the market but expressed confidence in the company's strategy and leadership to navigate these challenges [24] - The company remains committed to enhancing customer experience while strategically investing in growth initiatives [24] Other Important Information - The company returned $192 million to shareholders through quarterly cash dividends, reflecting a 5% increase per share from 2023 [15] - The leadership team is evolving, with Tom Edwards set to join as COO and CFO, indicating a focus on strengthening the company's financial position [22] Q&A Session Summary Question: Plans to sell more of Macy's real estate? - The company is rationalizing and monetizing underperforming store locations as part of its strategy, having closed 64 Macy's and one Bloomingdale's location in 2024 [26][27] Question: Approach to board refreshment? - The company is committed to board refreshment, with a focus on having the right mix of skills and reducing average board tenure [29][30] Question: Dynamic of Macy's vendor relationships? - The company maintains strong vendor relationships and has attracted new vendors as part of its transformation strategy [31][32] Commentary: Appreciation for leadership and store updates? - The management expressed pride in the State Street store and its historical significance, emphasizing ongoing efforts to maintain its legacy [35][36]