Macy's Inc · NYSE:M
Macy's — Q2 2020 Earnings Presentation
19 slides from Macy's's earnings presentation, Sep 2, 2020
Slide 1: Second Quarter 2020 Earnings
Second Quarter 2020 Earnings Jeff Gennette, Chairman & CEO | Felicia Williams, Interim CFO September 2, 2020
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT All statements in this press release 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 an
Slide 3: Second Quarter Snapshot
SECOND QUARTER SNAPSHOT millions, except per share figures and percentages 2Q20 Spring 20 Net Sales $ 3,559 $ 6,576 Comp sales - owned (34.7)% (40.0)% Comp sales - owned + licensed (35.1)% (40.2)% Credit card revenues, net $ 168 $ 299 Gross margin $ 841 $ 1,357 Gross margin rate 23.6% 20.6% Selling,
Slide 4: Second Quarter Highlights
SECOND QUARTER HIGHLIGHTS • Better-than-expected second quarter performance across all three brands – Macy’s, Bloomingdale’s, Bluemercury • Stores reopened stronger than anticipated, digital remained strong throughout quarter, Luxury outpaced our expectations • Star Rewards loyalty program members’
Slide 5: Second Quarter Highlights
SECOND QUARTER HIGHLIGHTS 2Q20 Spring 20 Notes • Year-over-year decline largely due to recent shift by consumers to debit cards and cash Credit Revenue $168 million $299 million • New accounts were down significantly due to store closures (we derive about (-$8 million to LY) (-$49 million to LY) 85%
Slide 6: Maintaining Financial Flexibility
MAINTAINING FINANCIAL FLEXIBILTY • Completed approximately $4.5 billion of new financing during the quarter. • This included $1.3 billion of senior secured notes, as well as a new $3.2 billion asset-based credit facility. We used the proceeds of the notes offering, along with cash on hand, to repay
Slide 7: 2020 Expectations
2020 EXPECTATIONS 2020 EXPECTATIONS Comp sales - owned + licensed Down low- to mid-20's for the Fall season Annual digital sales penetration of mid-40%. Digital High-teens digital increase in the Fall season. Low- to mid-teens increase for full year digital sales. Stores Q2 exit rate holds through F
Slide 8: Our Vision Is To Be The Leading Multi-Branded Fashion Retailer
OUR VISION IS TO BE THE LEADING MULTI-BRANDED FASHION RETAILER FROM OFF-PRICE TO LUXURY, FROM ONLINE TO OFFLINE, FROM ON-MALL TO OFF-MALL WE WILL OFFER CONVENIENT ACCESS TO THE FULLNESS OF OUR BRANDS. Our customers want great fashion Our customers are omni-shoppers. Our customers come to us for the
Slide 9: We Have Refined Our Polaris Strategies
WE HAVE REFINED OUR POLARIS STRATEGIES WITH A FOCUS ON HOW EACH WILL STRENGTHEN & REINFORCE EACH OTHER CUSTOMER FASHION DIGITAL strengthen CUSTOM ER We will develop a high We will build on our We will strategically R E L AT I O N S H I P S engagement customer fashion authority by invest across the e
Slide 10: Polaris Strategies Drive Competitive Advantage & Differentiation
POLARIS STRATEGIES DRIVE COMPETITIVE ADVANTAGE & DIFFERENTIATION TO FIRST RECOVER THE BUSINESS THEN DRIVE BOTH TOP- AND BOTTOM-LINE GROWTH strengthen curate accelerate optimize reset CUSTOMER QUALITY DIGITAL OMNI COST RELATIONSHIPS FASHION GROWTH NETWORK BASE ✓ Improve end-to-end ✓ Evolve role of th
Slide 11: Polaris Will Stabilize and Grow Gross Margin and Right-Size Cost Base
POLARIS WILL STABILIZE AND GROW GROSS MARGIN AND RIGHT-SIZE COST BASE GROSS MARGIN AND SG&A IMPROVEMENT TARGETS ~ $2.1 billion Marketing 1 Supply2 Chain Stores 3 Corporate 4 5 2022 run-rate 6 & other savings SG&A Gross Margin Target of ~$1.5 billion Target of ~$600 million 11
Slide 12: Macy's, Inc. Store Count
MACY’S, INC. Macy’s, Inc.STORE StoreCOUNT Count End of 4Q19 End End of 1Q20 of 2Q2 End of 2Q20 Change in Store Locations from 4Q19 Boxes Store Locations Boxes Store Locations Boxes Store Locations Macy's Flagships 16 11 16 11 16 11 Macy's Magnets 431 385 430 384 429 384 -1 Macy's Core 447 396 446 39
Slide 13: Full Line Macy's Brand and Bloomingdale's Department Stores
FULL LINE MACY’S BRAND AND BLOOMINGDALE’S DEPARTMENT STORES Location Owned Sales 2 Owned Sales per Owned Sales per Neighborhood Quintile Count 3 ($ million) Location ($ million) Square Foot ($) Location Count4 • Locations are ranked by incremental, 4-wall 1 2019 – FULL YEAR EBITDA , from high to Fif
Slide 14: Reconciliation of GAAP to Non-GAAP Financial Measures
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (ALL AMOUNTS IN MILLIONS EXCEPT FOR PERCENTAGES AND PER SHARE FIGURES) The company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial
Slide 15: Changes in Comparable Sales
CHANGES IN COMPARABLE SALES 13 Weeks Ended 26 Weeks Ended August 1, 2020 August 1, 2020 Decrease in comparable sales on an owned basis (Note 1) (34.7)% (40.0)% Impact of growth in comparable sales of departments licensed to third (0.4)% (0.2)% parties (Note 2) Decrease in comparable sales on an owne
Slide 16: Net Income (Loss), Excluding Certain Items and Gains on Sale of Real Estate
NET INCOME (LOSS), EXCLUDING CERTAIN ITEMS AND GAINS ON SALE OF REAL ESTATE 13 Weeks Ended 13 Weeks Ended August 1, 2020 August 3, 2019 Most comparable GAAP measure: Net income (loss) $(431) $86 Non-GAAP measure: Net income (loss) $(431) $86 Restructuring, impairment and other costs 242 2 Settlement
Slide 17: Diluted Earnings (Loss) Per Share, Excluding Certain Items
DILUTED EARNINGS (LOSS) PER SHARE, EXCLUDING CERTAIN ITEMS AND GAINS ON SALE OF REAL ESTATE 13 Weeks Ended 13 Weeks Ended August 1, 2020 August 3, 2019 Most comparable GAAP measure: Diluted earnings (loss) per share $(1.39) $0.28 Non-GAAP measure: Diluted earnings (loss) per share $(1.39) $0.28 Rest
Slide 18: Net Income (Loss), Excluding Certain Items and Gains on Sale of Real Estate
NET INCOME (LOSS), EXCLUDING CERTAIN ITEMS AND GAINS ON SALE OF REAL ESTATE 26 Weeks Ended 26 Weeks Ended August 1, 2020 August 3, 2019 Most comparable GAAP measure: Net income (loss) $(4,012) $223 Non-GAAP measure: Net income (loss) $(4,012) $223 Impairment, restructuring and other costs 3,426 3 Se
Slide 19: Diluted Earnings (Loss) Per Share, Excluding Certain Items
DILUTED EARNINGS (LOSS) PER SHARE, EXCLUDING CERTAIN ITEMS AND GAINS ON SALE OF REAL ESTATE 26 Weeks Ended 26 Weeks Ended August 1, 2020 August 3, 2019 Most comparable GAAP measure: Diluted earnings (loss) per share $(12.91) $0.71 Non-GAAP measure: Diluted earnings (loss) per share $(12.91) $0.71 Im