Key insights

• Long-Term Targets and Progress

  • 📊 The company discusses improving credit card usage, late fee mitigation, 53rd week impact, and long-term sales targets.
  • 🔄 They also talk about the decline in transactions, revitalizing assortments, and upcoming strategy progress.

• Sales Growth and Store Optimization

  • 📈 Macy's is investing in sales growth and expects improvement by focusing on newness, inventory management, and customer experience. They will close 150 stores but invest in the first 50 with a focus on customer feedback and digital demand recapture.
  • 🛍️ The company is focusing on omnichannel strategy, monetization, and private and market brands. Off-price retail, like backstage, remains important for the overall value equation, and marketplace sales impact net sales and EITDA.
  • 🏬 Macy's plans to focus on improving store productivity, expanding off-mall presence, and launching private brands, anticipating a healthy balance between private and market brands to drive profitability.

• Operational Improvements

  • ⚙️ Macy's is implementing a new strategy to simplify and modernize its operations to achieve cost savings and improved efficiency.
  • 👥 The company is focusing on hiring the best talent while reducing the corporate workforce by 133%. It anticipates a transition year in fiscal 2024 with a focus on investment in digital and luxury segments.
  • 💼 The company is expecting a reduction in overall Capital spend and adjusted diluted EPS while transitioning and investing in an uncertain year, focusing on returning to top and bottom line growth, accelerating free cash flow generation, and creating shareholder value.

• Financial Results and Strategy

  • 💰 Macy's discusses financial results, strategy for fiscal 2024, and a new plan to return to enterprise growth and unlock shareholder value.
  • 📈 The plan involves strengthening the Macy's nameplate, accelerating luxury growth, and simplifying operations.
  • 🏬 The company aims to close underproductive stores, grow other store bases, and monetize assets while focusing on creating a convenient, easy, and frictionless customer experience across channels.
  • 🛒 Macy's aims to optimize its store fleet, focus on product assortment, and enhance the digital experience to achieve consistent sales growth starting in 2025.

Q&A

• What are some key highlights from Macy's strategy progress and long-term sales targets?

  Macy's has been discussing strategies for improving credit card usage, late fee mitigation, the impact of the 53rd week on sales, and long-term sales targets. They are also working on revitalizing assortments and multi-season planning.

• What is impacting Macy's credit income and first-quarter gross margin?

  Factors impacting first-quarter gross margin include inventory, customer experience investments, and the absence of asset sale gains. Credit income is affected by higher credit card balances and delinquencies, leading to higher credit losses.

• How is Macy's planning to enhance its omnichannel strategy and brand relevance?

  Macy's is focusing on an omnichannel strategy and digital outreach to capture demand. They are also emphasizing private and market brands for assortment relevance and continue to view off-price retail as important for the overall value equation.

• What is Macy's approach to store closures and expansion?

  Macy's plans to close underproductive stores and grow other store bases while also investing in the first 50 stores with a focus on customer feedback and digital demand recapture. They are aiming for a healthy balance between private and market brands to drive profitability.

• How does Macy's aim to create a convenient customer experience?

  Macy's is focused on creating a convenient, easy, and frictionless customer experience across channels. They are improving the digital customer experience through personalized communications and efficient checkout.

• What are Macy's plans for store optimization and expansion?

  Macy's plans to optimize its store fleet and focus on product assortment to achieve consistent sales growth starting in 2025. Bloomingdale's and Blue Mercury will expand through small format and digital presence to capitalize on the luxury segment.

• What strategies are in place to strengthen Macy's nameplate and accelerate luxury growth?

  Macy's plans to strengthen its nameplate by closing underproductive stores, refining assortments, and modernizing the shopping environment. Additionally, they aim to accelerate luxury growth and simplify operations by optimizing the store fleet, focusing on product assortment, and enhancing the digital experience.

• How is Macy's planning to accelerate financial improvement and deliver sustainable growth?

  Macy's is implementing a new strategy to simplify and modernize its operations to achieve cost savings and improved efficiency by rationalizing supply chain assets, streamlining fulfillment, and leveraging technology. The company is focusing on hiring the best talent while reducing the corporate workforce by 133%.

• What are Macy's financial results and outlook for fiscal 2024?

  Macy's reported a decline in net sales but a significant improvement in gross margin rate. For fiscal 2024, the company anticipates a transition year focusing on investment in the digital and luxury segments. They expect a reduction in overall Capital spend and adjusted diluted EPS.

• 00:00 Macy's INC fourth quarter 2023 earnings call discusses financial results, strategy for fiscal 2024, and a new plan to return to enterprise growth and unlock shareholder value. The plan involves strengthening the Macy's nameplate, accelerating luxury growth, and simplifying operations. The company aims to close underproductive stores, grow other store bases, and monetize assets. The focus is on creating a convenient, easy, and frictionless customer experience across channels.
• 10:07 Macy's plans to optimize its store fleet, focus on product assortment, and enhance the digital experience. The company aims for consistent sales growth starting in 2025. Bloomingdale's and Blue Mercury will expand through small format and digital presence to capitalize on the luxury segment.
• 19:52 Macy's is implementing a new strategy to simplify and modernize its operations to achieve cost savings and improved efficiency, including rationalizing supply chain assets, streamlining fulfillment, and leveraging technology. The company is focusing on hiring the best talent while reducing the corporate workforce by 133%. The fourth quarter results reflect a decline in net sales but a significant improvement in gross margin rate. Inventory productivity and expense discipline are also key highlights. Looking ahead to fiscal 2024, Macy's anticipates a transition year with a focus on investment in digital and luxury segments. The company is expecting a decline in net sales and plans to provide relative performance data for go-forward versus non-go-forward stores.
• 31:20 The company expects a reduction in overall Capital spend, adjusted diluted EPS, and plans to achieve sustainable and profitable sales growth. The company is transitioning and investing in an uncertain year, focusing on returning to top and bottom line growth, accelerating free cash flow generation, and creating shareholder value.
• 41:25 The company is investing in sales growth and expects improvement in sales and margins by focusing on newness, inventory management, and customer experience. They are closing 150 stores but will invest in the first 50 with a focus on customer feedback and digital demand recapture.
• 50:08 The company is focusing on omnichannel strategy, monetization, and eida expansion. They are also leaning into private and market brands and are committed to ramping up assortment relevance. Off-price retail remains important, and marketplace sales impact net sales and EITDA.
• 59:15 Macy's plans to focus on improving store productivity, expanding off-mall presence, and launching private brands. They anticipate a healthy balance between private and market brands to drive profitability. The first-quarter gross margin is impacted by inventory, customer experience investments, and absence of asset sale gains. Credit income is affected by higher credit card balances and delinquencies.
• 01:07:38 The company discusses improving credit card usage, late fee mitigation, 53rd week impact, and long-term sales targets. They also talk about the decline in transactions, revitalizing assortments, and upcoming strategy progress.