Macy's Inc · NYSE:M
Macy's — Non-Deal Roadshow (September 2022)
36 slides from Macy's's roadshow presentation, September 2022
Slide 1: Shareholder Outreach Off-Season 2022
Shareholder Outreach Off-Season 2022 52909940 September 2022 0
Slide 2: Safe Harbor Statement
Safe Harbor Statement All forward-looking statements are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those in the forwa
Slide 3: Contents
Contents • Polaris strategy to achieve long-term sustainable top and bottom line profitability • Sustainability strategy • Diversity, Equity & Inclusion • Compensation • Governance profile 2
Slide 4: Polaris
* POLARIS
Slide 5: Polaris Strategy Key Pillars
POLARIS STRATEGY Polaris Strategy Win with Deliver fashion and style that meet core and new customer Key Pillars 1 fashion and style needs across all occasions Deliver clear 2 value Build trust and deliver value through simple, easy-to-understand pricing and promotions 3 Excel in digital shopping Pr
Slide 6: Macy's, Inc. is a Transformed Organization
POLARIS STRATEGY Macy’s, Inc. is a Transformed Organization More agile, more profitable and more relevant to customers FY2019 FY2021 Scaled platform and fully integrated team, operating a leading, scaled Digital team worked as a siloed organization website in our categories Delayed closures to maint
Slide 7: Spring Season 2022 Omnichannel Performance Highlights
Spring Season 2022 Omnichannel Performance Highlights Store Locations by Banner +4.9% +5.7% $1,299M COMPARABLE- NET SALES VS ADJUSTED 159 OWNED-PLUS- 2021 EBITDA LICENSED SALES VS. 2021 55 511 Total of 725 across all banners $2.08 +7.3% $1,304M Digital Highlights ADJUSTED INVENTORY VS FREE CASH FLOW
Slide 8: Omnichannel Ecosystem Highlights
POLARIS STRATEGY Omnichannel Ecosystem Highlights Committed to delivering a dynamic integration of physical stores and digital shopping which is the most effective way to meet the needs of an omnichannel customer We are continuing to invest in the business both in high-return opportunities that bene
Slide 9: Strategically deploying capital
POLARIS STRATEGY Strategically deploying capital Strengthening our capital structure, investing in the highest return projects and returning capital to shareholders • Best-positioned for access to bank and capital market funding under all economic scenarios Capital Structure • Maintain investment gr
Slide 10: Social Purpose
Social Purpose 9
Slide 11: Mission Every One
MISSION EVERY ONE Mission Every One Macy’s, Inc. social purpose platform Consumers have a rising expectation that how companies do business is as Creating a brighter future with bold representation for all important as what they sell. Our signature commitment: And so do we. $5B directed to our peopl
Slide 12: Sustainability
Sustainability 11
Slide 13: Sustainability at Macy's, Inc.
POLARIS STRATEGY SUSTAINABILITY Sustainability at Macy’s, Inc. A center of excellence, working with partners across the organization Be the leader in sustainable product offerings, elevating sustainability for new audiences The Sustainability team continues to Shape policies that protect people, the
Slide 14: Sustainability Center of Excellence
SUSTAINABILITY Sustainability Center of Excellence The Sustainability team is organized around four pillars Products Human Rights Environment Governance Private Brand and Human Rights and Operational Disclosure, data Market Brand product Social Compliance environmental analytics, reporting, and sust
Slide 15: Progress on Key Focus Areas
SUSTAINABILITY Progress on Key Focus Areas Published updates to Macy’s, Inc. Sustainability Website in September 2022 Products Human Rights Environment Focusing on increasing customer sales of Raising the bar on our social compliance Disclosing our environmental performance sustainable products whil
Slide 16: Diversity, Equity & Inclusion
BRAND LOVE MESSAGE 19 APRIL 2020 Diversity, Equity & Inclusion 15 15
Slide 17: Diversity, Equity & Inclusion
DIVERSITY, EQUITY & INCLUSION D IVER SITY, We ensure our DE&I efforts touch every part of our business WHAT WE STAND FOR EQU IT Y & Colleague: Reflect the full spectrum of diversity at all levels of our organization IN C LU SION Customer: Ensure every customer is welcomed, accepted, and respected OU
Slide 18: Increased Ethnic Diverse Representation at all Levels
DIVERSITY, EQUITY & INCLUSION Diversity, Equity & Inclusion Increased Ethnic Diverse Representation at all Levels % Ethnic Diversity by Job Level % Female Aug FY 2022 • Led a concerted effort to improve ethnic 74% 73% representation through retention, internal 63% 64% 72% 62% 62% 72% promotions, and
Slide 19: 2022 Key Accomplishments
DIVERSITY, EQUITY & INCLUSION Diversity, Equity & Inclusion 2022 Key Accomplishments COLLEAGUE CUSTOMER SUPPLIER COMMUNITY MARKETING Invested in enterprise-wide Created and launched DE&I Hosted first Vendor Pitch Deepened relationships with Increased diverse programming and learning training to refi
Slide 20: What's Ahead
DIVERSITY, EQUITY & INCLUSION Diversity, Equity & Inclusion What’s Ahead Deliver on Social Purpose Commitments by 2025 • Diversify Leadership: achieve 30% ethnic representation at Director+ levels that more closely reflects our customer base • Diverse Spend: direct $5 billion of the company’s spend
Slide 21: Compensation
Compensation 20
Slide 22: Total Reward Strategies for Attraction and Retention
TOTAL REWARDS STRATEGIES Total Reward Strategies for Attraction and Retention Our goal is to build a rewards strategy that encourages and recognizes performance. Here are some recent highlights: • Minimum wage raised to $15/hour for all colleagues; average base pay is above $17/hour and average tota
Slide 23: Compensation Programs Grounded in Strong Governance Practices
EXECUTIVE COMPENSATION Compensation Programs Grounded in Strong Governance Practices Align pay with company performance Incentive plans use multiple metrics to reward performance for driving company strategy and align to stock price performance Leverage relative total shareholder return metric withi
Slide 24: 2022 Context for Incentive Plan Designs
EXECUTIVE COMPENSATION 2022 Context for Incentive Plan Designs The CMD Committee designed 2022 incentive plans to reflect a return to a more normalized business environment • The plans continue to showcase their purpose to motivate and engage the organization and leadership with clear linkage betwee
Slide 25: Strong Alignment between Pay and Performance
EXECUTIVE COMPENSATION Strong Alignment between Pay and Performance is at the Core of Compensation Program Demonstrated in the design of our programs… …and in the outcome of our programs CEO 2022 Program Design CEO Realized Compensation (‘000s) Base Salary $4,517 Annual $4,350 $4,350 $3,625 $3,625 1
Slide 26: 2022 Short-Term Incentive Plan
EXECUTIVE COMPENSATION 2022 Short-Term Incentive Plan In alignment with the 2022 business plans, plan design focuses key financial metrics of Sales and EBITDA and strategic initiatives The design of the 2022 short-term incentive (STI) plan reflects a continuity from last year, and with a focus on ou
Slide 27: 2022 Long-Term Incentive Plan
EXECUTIVE COMPENSATION 2022 Long-Term Incentive Plan Plan design focuses on both stock price performance and achievement of a key long-term strategic metric Taking a longer view and as we get beyond the pandemic and business normalizes, we are focused on delivering on metrics that will cement our po
Slide 28: Corporate Governance
Corporate Governance 27
Slide 29: Corporate Governance Highlights
CORPORATE GOVERNANACE Corporate Governance Highlights 13 of 14 directors are independent Lead independent director Annual board and committee evaluation Majority voting in uncontested director elections Annual election of all directors No Poison Pill plan Policy prohibiting pledging and hedging Boar
Slide 30: Corporate Governance Highlights
CORPORATE GOVERNANACE Corporate Governance Highlights Directors provide effective mix of experience, fresh ideas, gender, age and racial/ethnic diversity RACIAL/ETHNIC DIVERSITY INDEPENDENCE DIRECTOR AGE 29% • Average age 56.3 years Macy’s 1 4 Ethnically Chairman Diverse and CEO 40 – 49 YRS 50 – 59
Slide 31: Appendix
Appendix 30
Slide 32: 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 33: Changes in Comparable Sales – Macy's, Inc.
Changes in Comparable Sales – Macy's, Inc. 26 weeks ended Macy’s, Inc. July 30, 2022 Increase in comparable sales on an owned basis (Note 1) 5.1% Impact of growth in comparable sales of departments licensed to third parties (Note 2) (0.2%) Increase in comparable sales on an owned plus licensed basis
Slide 34: EBITDA Excluding Certain Items
Earnings Before Interest, Taxes, Depreciation, and Amortization Excluding Certain Items 26 weeks ended In millions July 30, 2022 Most comparable GAAP measure: Net income $561 Net sales 10,948 Net income as a percent to net sales 5.1% Non-GAAP measure: Net income $561 Interest expense, net 89 Losses
Slide 35: Diluted Earnings Per Share, Excluding Certain Items
Diluted Earnings Per Share, Excluding Certain Items 26 weeks ended July 30, 2022 Most comparable GAAP measure: Diluted earnings per share $1.97 Non-GAAP measure: Diluted earnings per share $1.97 Impairment, restructuring and other costs 0.04 Settlement charges - Losses on early retirement of debt 0.
Slide 36: Free Cash Flow
Free Cash Flow 52 weeks ended In millions July 30, 2022 Net cash provided by operating activities $2,050 Purchase of property and equipment (590) Capitalized software (359) Disposition of property and equipment 203 Free Cash Flow $1,304 35