Macy's Inc · NYSE:M
Macy's — Q1 2022 Earnings Presentation
31 slides from Macy's's earnings presentation, May 26, 2022
Slide 1: First Quarter 2022 Earnings
First Quarter 2022 Earnings 52909940 Jeff Gennette, Chairman & CEO Adrian Mitchell, CFO 26 May 2022 0
Slide 2: Safe Harbor Statement
Safe Harbor Statement All statements in this presentation that are not statements of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of Macy’s management and
Slide 3: First Quarter Results
First Quarter Results 2
Slide 4: First Quarter Snapshot
First Quarter Snapshot millions, except per share figures and percentages 1Q22 1Q21 Net Sales $5,348 $4,706 Comp sales - owned 12.8% 62.5% Comp sales - owned + licensed 12.4% 63.9% Credit card revenues, net $191 $159 Gross margin $2,117 $1,817 Gross margin rate 39.6% 38.6% Selling, general & adminis
Slide 5: First Quarter Highlights
First Quarter Highlights • Adjusted diluted earnings per share of $1.08 and diluted earnings per share of $0.98 • Comparable sales up 12.8% on an owned basis and up 12.4% on an owned plus licensed basis versus 1Q21 • Digital sales grew 2% versus 1Q21 and 34% versus 1Q19 • Digital penetration was 33%
Slide 6: First Quarter Financial Highlights
First Quarter Financial Highlights millions, except per share figures and percentages 1Q22 Notes Credit Revenue $191 • Performance driven by better-than-expected bad debt levels and higher sales Change to 1Q21 +$32 Gross Margin $2,117 • Merchandise margin improved 50 bps, benefiting from higher AURs
Slide 7: First Quarter Credit Card Revenue
First Quarter Credit Card Revenue Performance Metrics 1Q22 Net Credit Card Revenue $191M, $32M from 1Q21 Net Credit Card Revenue Penetration 3.6% of sales, 20bps vs 1Q21 Digital new accounts 21% vs 1Q21 New accounts 573K, 15% to 1Q21 Proprietary card penetration rate 43.1%, 110 bps to 1Q21 • Digital
Slide 8: Capital Allocation
Capital Allocation • Cash flow from operating activities of $248 million, driven by higher Adjusted EBITDA offset by a working capital outflow of $213 million – Working capital movement is the result of an increase in merchandise inventories net of merchandise payables, and a decrease in accounts pa
Slide 9: Remaining Long-term Debt Maturities, as of April 30, 2022
Remaining Long-term Debt Maturities, as of April 30, 2022 ($M) 6.08% Unsecured Notes New Unsecured Notes 5.27% 566 5.92% 6.13% 592 5.13% 4.30% 6.85% 6.38% 425 425 250 250 193 6.79% 206 6.90% 7.60% 71 13 6 10 Fiscal Year 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037
Slide 10: Brand and Channel Performance
Brand and Channel Performance 9
Slide 11: Most Omnichannel Markets are Growing
Most Omnichannel Markets are Growing Increasing importance of interplay between digital and physical assets Seattle, WA • Omni sales growth: +17% vs 1Q21 Boston, MA • Stores (10 locations): +18% vs 1Q21 • Omni sales growth: +23% vs 1Q21 • Digital sales growth: +16% vs 1Q21 • Stores (11 locations): +
Slide 12: Digital Channel Performance Metrics
Digital Channel Performance Metrics First Quarter 2022 Sales Up 2% to 1Q21 Penetration 33% of net sales vs. 37% in 1Q21 Sales from Mobile Devices* 61% of digital demand sales Number of Visits* 509 million, up 1% to 1Q21 Conversion Rate* 3.8%, down 5% to 1Q21 Vendor Direct % of Digital Sales* 20% Dig
Slide 13: Omnichannel Ecosystem Investment Highlights
Omnichannel Ecosystem Investment Highlights Digital • Mobile App: redesigned to make it even easier for customers to shop their personal style, price check in- store, build favorites lists, manage their Star Rewards, and track orders • Macy’s app active customers increased 14% to 7.4 million* • Live
Slide 14: Omnichannel Ecosystem Investment Highlights
Omnichannel Ecosystem Investment Highlights Store • Full-line Stores: Building new capabilities to ensure the shopping experience is as convenient and compelling as possible • Iterating on store fleet to create a connected, tech-enabled omni ecosystem • Reimagining full in-store experience for custo
Slide 15: Nameplate First Quarter Highlights
Nameplate First Quarter Highlights 1Q22 Comparable sales - owned + licensed Up 10.1% compared to 1Q21 Digital Penetration 33% 1Q22 Comparable sales - owned + licensed Up 26.9% compared to 1Q21 Digital Penetration 35% 1Q22 Comparable sales - owned + licensed Up 25.2% compared to 1Q21 Digital Penetrat
Slide 16: Macy's First Quarter Customer Highlights
Macy’s First Quarter Customer Highlights ~44.4M active customers shopped ~29.1M Star Rewards active members the Macy’s brand* made up ~69% of the total Macy's brand owned-plus-licensed sales* +14% compared to 1Q21 +6 ppt compared to 1Q21 15
Slide 17: Macy's Merchandising Update
Macy’s Merchandising Update Wide assortment of categories, products and brands gives Macy’s the ability to meet and flex with customer demand Top Performing Categories • Fragrances, dresses, men’s clothing, women’s shoes and furnishings Reinventing Private Brands • Private brands provide higher marg
Slide 18: Macy's Backstage Highlights
End of Q1 2022 End of FY2021 Macy’s Stores Opened 23 48 Backstage Stores within Stores 22 46 Highlights Freestanding 1 2 Total Store Count 292 271 Stores within Stores 283 263 Freestanding 9 8 • Comparable sales for Backstage locations store-within-store locations open more than one year saw high si
Slide 19: Bloomingdale's and Bluemercury Highlights
Bloomingdale’s and Bluemercury Highlights • 1Q22 comparable sales on an owned-plus-licensed basis up 26.9% compared to 1Q21 • Approximately 4.0 million active customers shopped, on a trailing twelve- month basis, a 21% increase over the prior year period • Continued to see strong performance from lu
Slide 20: Guidance
Guidance 19
Slide 21: 2022 Full-year Guidance
2022 Full-year Guidance 2022 GUIDANCE as of 5/26/2022 2022 GUIDANCE as of 2/22/2022 $24,460 million to $24,700 million, $24,460 million to $24,700 million, Net sales flat to +1.0% growth vs. 2021 flat to +1.0% growth vs. 2021 Comparable owned-plus-licensed sales three-year CAGR Approximately 1.1% to
Slide 22: Second Quarter 2022 Guidance
Second Quarter 2022 Guidance Second Quarter Net sales $5,480 million to $5,550 million 2022 * Adjusted diluted EPS $0.84 to $0.94 Guidance • Gross margin rate expected to be no lower than rate in second quarter of 2019, reflecting: • Anticipation for higher fuel costs within our supply chain network
Slide 23: Macy's, Inc. Store Count – As of April 30, 2022
Macy’s, Inc. Store Count – As of April 30, 2022 End of 1Q22 Change in Locations from FY21 Boxes Locations Macy's Department Stores* 500 446 Macy's Furniture 52 47 Macy's Furniture Clearance 2 2 Freestanding Backstage 9 9 +1 Macy's Small Format 5 5 Stores converted to Fullfilment Centers 2 2 Total Ma
Slide 24: Appendix
Appendix 23
Slide 25: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures The company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures provide users of the company's financial information with add
Slide 26: Changes in Comparable Sales – Macy's Inc.
Changes in Comparable Sales – Macy's Inc. 13 weeks ended 13 weeks ended Macy’s, Inc. April 30, 2022 May 1, 2021 Increase in comparable sales on an owned basis (Note 1) 12.8% 62.5% Impact of growth in comparable sales of departments licensed to third parties (0.4%) 1.4% (Note 2) Increase in comparabl
Slide 27: Changes in Comparable Sales- Macy's, Bloomingdale's and Bluemercury brands
Changes in Comparable Sales- Macy’s brand, Bloomingdale’s brand and Bluemercury brand 13 weeks ended Macy’s April 30, 2022 Increase in comparable sales on an owned basis (Note 1) 10.7% Impact of growth in comparable sales of departments licensed to third parties (Note 2) (0.6%) Increase in comparabl
Slide 28: EBITDA Excluding Certain Items
Earnings Before Interest, Taxes, Depreciation, and Amortization Excluding Certain Items 13 weeks ended 13 weeks ended In millions April 30, 2022 May 1, 2021 Most comparable GAAP measure: Net income $286 $103 Net sales 5,348 4,706 Net income as a percent to net sales 5.3% 2.2% Non-GAAP measure: Net i
Slide 29: Net Income, Excluding Certain Items
Net Income, Excluding Certain Items 13 weeks ended 13 weeks ended In millions April 30, 2022 May 1, 2021 Most comparable GAAP measure: Net income $286 $103 Non-GAAP measure: Net income $286 $103 Impairment, restructuring and other costs 8 19 Losses on early retirement of debt 31 11 Income tax impact
Slide 30: Diluted Earnings Per Share, Excluding Certain Items
Diluted Earnings Per Share, Excluding Certain Items 13 weeks ended 13 weeks ended April 30, 2022 May 1, 2021 Most comparable GAAP measure: Diluted earnings per share $0.98 $0.32 Non-GAAP measure: Diluted earnings per share $0.98 $0.32 Impairment, restructuring and other costs 0.03 0.06 Losses on ear
Slide 31: Free Cash Flow
Free Cash Flow 13 weeks ended In millions April 30, 2022 Net cash provided by operating activities $248 Purchase of property and equipment (171) Capitalized software (90) Disposition of property and equipment 73 Free Cash Flow $60 30