Macy's Inc · NYSE:M
Macy's — Q1 2021 Earnings Presentation
24 slides from Macy's's earnings presentation, May 18, 2021
Slide 1: First Quarter 2021 Earnings
First Quarter 2021 Earnings 52909940 Jeff Gennette, Chairman & CEO Adrian Mitchell, CFO 18 May 2021 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 1Q21 1Q20 1Q19 Net Sales $4,706 $3,017 $5,504 Comp sales - owned 62.5% (45.3%) 0.6% Comp sales - owned + licensed 63.9% (45.4%) 0.7% Credit card revenues, net $159 $131 $172 Gross margin $1,817 $516 $2,101 Gross margin rate 38
Slide 5: First Quarter Highlights
First Quarter Highlights • Net income of $103 million, with diluted EPS of $0.32 • Adjusted net income of $126 million and adjusted diluted EPS of $0.39 • Adjusted diluted EPS, excluding asset sale gains, up $0.04 compared to 1Q19 • Results exceeded expectations for the quarter • Adjusted EBITDA mar
Slide 6: Q1 2021 Polaris Update
Q1 2021 Polaris Update Win with Deliver Clear Excel in Digital Enhance Store Modernize Enable Fashion & Style Value Shopping Experience Supply Chain Transformation Improved mix drove Improving and Improved Improved sales trend Continuing to update Welcomed new Chief success across expanding location
Slide 7: First Quarter Earnings Highlights
First Quarter Earnings Highlights (Comparison to 1Q19 included below to more appropriately benchmark our performance) millions, except percentages 1Q21 Notes Credit Revenue $159 • Good credit health in our customers continuing • Decline to 1Q19 due to lower net sales and lower profit share from lowe
Slide 8: Digital Channel: 1Q21 Highlights
Digital Channel: 1Q21 Highlights Performance Metrics 1Q21 (unless otherwise noted) Sales Up 32% to 1Q19 Penetration 37% of net sales Sales from Mobile Devices* 60% of digital demand sales Average Number of Unique Visits* 505 million, up 22% to LY Conversion Rate* 4.0%, up 9% to LY Vendor Direct % of
Slide 9: 1Q21 Customer Profile
Star Rewards Loyalty Members Platinum Gold Silver Bronze 1Q21 Customer Sales $1.2B $570M $418M $582M Profile 1Q21 Active Customers 2.4M 2.4M 2.9M 3.2M Average Spend per Customer $496 $233 $143 $184 Average Visits 4.3 2.5 1.6 1.8 Average Spend per Visit $114 $93 $87 $102 Under 40 18% 20% 19% 27% Dive
Slide 10: Credit Card Revenue
Credit Card Revenue Performance Metrics 1Q21 New accounts 500K, Down 33% to 1Q19 Proprietary card penetration rate 42.0%, Down 430 bps to 1Q19 • Net credit card revenue of $159 million • Up $28 million from 1Q20 • Down $13 million from 1Q19 • Represented 3.4% of sales • 90 bps lower than 1Q20 • 30 b
Slide 11: Brand First Quarter Highlights
Brand First Quarter Highlights 1Q21 Comparable sales - owned + licensed Down 10.4% compared to 1Q19; 6.5pt improvement to 4Q20 Digital Penetration 37% 1Q21 Comparable sales - owned + licensed Down 7.1% compared to 1Q19; 11pt improvement to 4Q20 Digital Penetration 40% 1Q21 Comparable sales - owned +
Slide 12: Backstage Highlights
End of Q1 2021 End of Q4 2020 Macy’s Stores Opened in 1Q21 33 - Backstage Total Store Count 256 223 Highlights Stores within Stores 250 217 Freestanding 6 6 FY2021 Store Count Goal 270 - • Backstage store-within-store comparable sales were approximately 35 points higher than Macy’s stores overall co
Slide 13: Capital Allocation: First Quarter Highlights
Capital Allocation: First Quarter Highlights Finished the quarter without drawing from the asset-backed credit facility Free cash flow* of $403 million in 1Q21 Cash flow from operating activities of $494 million, up from $(38) million in 1Q19; variance due to EBITDA growth as well as lower payables,
Slide 14: 2021 Expectations
2021 Expectations 2021 EXPECTATIONS 2021 EXPECTATIONS Revised as of 2/23/2021 $21,725 million to $22,225 million $19.75 billion to $20.75 billion Net sales Increase between 25% and 28% compared to 2020 Increase between 14% and 20% compared to 2020 Digital Approximately $8 billion Annual penetration
Slide 15: 2021 Expectations – Seasonal/Q2
2021 Expectations – Seasonal/Q2 From a seasonal standpoint • 60% of Adjusted EBITDA excluding asset sales gains will be generated in the second half, with the majority of that coming in the fourth quarter • Asset sale gains for the remainder of the year are not expected until the fourth quarter 2Q21
Slide 16: Macy's, Inc. Store Count – As of May 1, 2021
Macy’s, Inc. Store Count – As of May 1, 2021 End of 4Q20 End of 1Q21 Change in Store Locations from 4Q20 Boxes Store Locations Boxes Store Locations Macy's Flagships * 16 11 16 11 Macy's Magnets * 429 384 429 384 Macy's Core * 445 395 445 395 Macy's Neighborhood * 63 58 63 58 Macy's Furniture 52 47
Slide 17: Appendix
Appendix 16
Slide 18: 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 ad
Slide 19: Changes in Comparable Sales – Macy's Inc.
Changes in Comparable Sales – Macy's Inc. May 1, 2021 versus May 1, 2021 versus 13 weeks 13 weeks ended Macy’s, Inc. ended May 2, 2020 May 4, 2019 Increase (decrease) in comparable sales on an owned basis (Note 1) 62.5% (10.5%) Impact of growth in comparable sales of departments licensed to third pa
Slide 20: Changes in Comparable Sales by Brand
Changes in Comparable Sales- Macy’s brand, Bloomingdale’s brand and Bluemercury brand Versus 13 weeks Macy’s ended May 4, 2019 Decrease 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) 0.3% Decrease in compa
Slide 21: EBITDA Excluding Certain Items and Asset Sale Gains
Earnings (Loss) Before Interest, Taxes, Depreciation, and Amortization Excluding Certain Items and Asset Sale Gains 13 weeks ended 13 weeks ended 13 weeks ended In millions May 1, 2021 May 2, 2020 May 4, 2019 Most comparable GAAP measure: Net income (loss) $103 $(3,581) $136 Net sales 4,706 3,017 5,
Slide 22: Net Income (Loss), Excluding Certain Items and Asset Sale Gains
Net Income (Loss), Excluding Certain Items and Asset Sale Gains 13 weeks ended 13 weeks ended 13 weeks ended In millions May 1, 2021 May 2, 2020 May 4, 2019 Most comparable GAAP measure: Net income (loss) $103 $(3,581) $136 Non-GAAP measure: Net income (loss) $103 $(3,581) $136 Impairment, restructu
Slide 23: Diluted EPS, Excluding Certain Items and Asset Sale Gains
Diluted Earnings (Loss) Per Share, Excluding Certain Items and Asset Sale Gains 13 weeks ended 13 weeks ended 13 weeks ended May 1, 2021 May 2, 2020 May 4, 2019 Most comparable GAAP measure: Diluted earnings (loss) per share $0.32 $(11.53) $0.44 Non-GAAP measure: Diluted earnings (loss) per share $0
Slide 24: Free Cash Flow
Free Cash Flow 13 weeks ended 13 weeks ended 13 weeks ended In millions May 1, 2021 May 2, 2020 May 4, 2019 Net cash provided (used) by operating activities $494 $(164) $(38) Purchase of property and equipment (61) (122) (204) Capitalized software (38) (38) (60) Disposition of property and equipment