Financial Data and Key Metrics Changes - First quarter net sales reached 4.4 billion to 0.16, above the guidance range of 0.15, compared to 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] Company Strategy and Development Direction - The company is focused on its "Bold New Chapter" strategy, which includes strengthening and reimagining Macy's, accelerating luxury, and modernizing operations [8][12] - The reimagined 125 locations outperformed the rest of the Macy's fleet, with a negative comp of 0.8% compared to a negative 2.1% for the total Macy's nameplate [12][30] - The company aims to diversify sourcing to mitigate tariff impacts, with 20% of products originating from China, down from over 50% pre-pandemic [19] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the second quarter, noting stronger performance in March and April compared to February [45] - The company anticipates a more choiceful consumer and plans to navigate an uncertain promotional environment [22][35] - Management highlighted the importance of maintaining a healthy inventory to sales ratio while being disciplined with inventory commitments [22][39] Other Important Information - The company plans to invest approximately 800 million in capital expenditures to support long-term growth [38] - SG&A expenses were relatively flat at 1.9 billion, with a percentage of total revenue at 39.9%, reflecting lower net sales [32] Q&A Session Summary Question: Sales guidance and consumer pressure - Management reaffirmed the annual sales guidance, noting stronger performance in March and April compared to February, and expressed cautious optimism for the rest of the year [44][45] Question: Impact of tariffs on pricing - Pricing is gradually being impacted by tariffs, with limited pricing seen in the second quarter, and management is negotiating with suppliers to manage costs [52][56] Question: Actions to capture market share - The company is focusing on product flow, improving marketing quality, and enhancing in-store experiences to capture market share [66] Question: Gross margin pressure in Q2 - Management indicated that gross margin pressure in Q2 will be influenced by markdowns and tariffs, with a focus on maintaining competitive pricing [68][69] Question: Inventory planning amid tariffs - The company plans to remain disciplined in inventory management, avoiding over-purchasing to mitigate tariff impacts [90] Question: Consumer health across income cohorts - Consumer health remains under pressure, but there is a positive response to newness and good value, particularly in categories like fine jewelry and big-ticket items [113][115]
Macy's(M) - 2026 Q1 - Earnings Call Transcript