Macy’s, Inc. Reports Fourth Quarter and Full-Year 2023 Results
- Macy’s reported a fourth-quarter diluted EPS of $(0.26) and adjusted diluted EPS of $2.45.
- The fourth-quarter gross margin rate was 37.5%, up 340 basis points year-over-year.
- The company achieved full-year 2023 net sales guidance and exceeded adjusted earnings guidance.
- Macy’s ended the year with over $1 billion of cash on the balance sheet and generated $1.3 billion of operating cash flow.
- The company announced 'A Bold New Chapter' strategy to challenge the status quo and enhance customer experience.
- The strategy aims to deliver growth and unlock shareholder value.
- Net sales for the fourth quarter of 2023 were $8.1 billion, down 1.7% compared to the fourth quarter of 2022.
- Digital sales decreased by 4% compared to the fourth quarter of 2022.
- Comparable sales for Macy’s were down 6.0% on an owned basis and down 4.7% on an owned-plus-licensed basis.
- Other revenue decreased by $64 million in the fourth quarter of 2023, representing 3.1% of net sales.
- Net credit card revenue declined by 26% from 2022 to $195 million.
- Full-year 2023 net sales were $23.1 billion, down 5.5% versus 2022.
- Digital sales for the full year decreased by 7% compared to 2022.
- Comparable sales for Macy’s were down 6.9% on an owned basis and down 6.0% on an owned-plus-licensed basis.
- Other revenue for the full year was $774 million, down $233 million from 2022, representing 3.4% of net sales.
Insights
Examining the financial results of Macy's, Inc., several key figures stand out. The reported fourth quarter gross margin rate increase to 37.5% is significant, surpassing the previous year's rate by 340 basis points. This improvement suggests efficacious inventory management and cost control measures, likely reflecting positively on the company's operational efficiency. However, it's crucial to assess whether this margin expansion is sustainable or a result of temporary factors such as reduced promotional activity or a favorable product mix.
Another point of interest is the reported net sales decline of 1.7% in the fourth quarter and 5.5% for the full year. In the context of a challenging retail environment, this decline could be indicative of broader consumer trends and competitive pressures. The decrease in digital sales, particularly, may raise concerns about the company's e-commerce strategy in an increasingly online retail market.
The non-cash asset impairment charge of approximately $950 million, primarily related to planned store closures, is indicative of a strategic shift and an effort to optimize the brick-and-mortar footprint. Stakeholders should consider the long-term benefits of such restructuring, despite the short-term earnings hit.
Lastly, the 2024 guidance suggests a cautious outlook, with an anticipated net sales range and a flat to slight increase in comparable owned plus licensed plus marketplace sales. This conservative forecast could be a reflection of management's expectations of the current retail climate and planned investments.
The retail sector is undergoing a transformation and Macy's strategy, 'A Bold New Chapter,' is an attempt to adapt to these changes. The focus on enhancing customer experience and delivering growth is timely, as retailers must innovate to maintain relevance. However, the decline in customer traffic and comparable sales raises questions about the effectiveness of current strategies and the company's ability to attract and retain customers in a competitive landscape.
It is also worth noting that the decrease in credit card revenue due to higher net credit losses could reflect broader economic factors such as rising consumer debt levels or a potential deterioration in consumer credit quality. This could have implications for future revenue streams from credit operations.
Investors and analysts should monitor the execution of the new strategy and its impact on customer engagement, market share and financial performance. The ability to leverage its iconic brand and improve omnichannel experiences will be critical in determining Macy's success in a retail industry that is increasingly dominated by online players and shifting consumer preferences.
Macy's initiative to reposition itself through 'A Bold New Chapter' reflects an industry-wide need for traditional brick-and-mortar retailers to innovate in the face of digital disruption. The emphasis on improving the omnichannel experience is crucial, as consumers increasingly expect seamless integration between online and offline channels. The flat performance in brick-and-mortar sales versus the decline in digital sales suggests that Macy's physical stores continue to hold value for customers, potentially as experiential spaces rather than just transactional outlets.
The reported strength in specific categories such as beauty and off-price segments like Macy's Backstage indicates that there are pockets of growth within the retail sector. These trends align with consumer demand for value and quality, which Macy's appears to be capitalizing on. However, the softness in women's shoes and cold-weather apparel highlights the challenges of predicting and responding to consumer trends.
As Macy's plans to close approximately 150 locations, it is essential to scrutinize the impact on local markets, employee displacement and brand perception. The closures, while potentially improving operational efficiency, must be balanced against the risk of losing customer touchpoints and the potential erosion of market presence.
Fourth quarter diluted EPS of
Fourth quarter gross margin rate of
Achieved full-year 2023 net sales guidance and exceeded adjusted earnings guidance
Ended the year with over
Announces “A Bold New Chapter,” a strategy to challenge the status quo to fundamentally reposition the company, enhance the customer experience, deliver growth and unlock shareholder value
“I am grateful to all our teams for their continued commitment to our customers during the holiday season. Throughout the fourth quarter, we delivered an improved omnichannel experience, with effective merchandising and a clear demonstration of value that resulted in a strong close to the year,” said Tony Spring, chief executive officer of Macy’s, Inc. “Our portfolio of iconic and globally recognized nameplates, healthy balance sheet and fortified operations position us to execute A Bold New Chapter. This strategy is designed to create a more modern Macy’s, Inc. that is expected to generate meaningful value for our shareholders in the years ahead.”
Fourth Quarter 2023 Highlights
Comparisons are to the fourth quarter 2022 unless noted otherwise. Financial highlights are reported on a 14-week basis for the fourth quarter of 2023 and on a 13-week basis for the fourth quarter of 2022 unless otherwise noted. Please refer to note 1 within the financial tables regarding reclassifications of certain prior year metrics.
-
Diluted loss per share of
$0.26 $2.45 -
This compares to diluted earnings per share of
$1.83 $1.88 -
Diluted loss per share in the fourth quarter of 2023 included
$1.0 billion $950 million
-
This compares to diluted earnings per share of
-
Net sales of
$8.1 billion 1.7% versus the fourth quarter of 2022.-
Digital sales decreased
4% versus the fourth quarter of 2022. - Brick-and-mortar sales were roughly flat versus the fourth quarter of 2022.
-
Digital sales decreased
-
Comparable sales, on a 13-week basis, were down
5.4% on an owned basis and down4.2% on an owned-plus-licensed basis. -
Highlights of the company's nameplates include:
-
Macy’s comparable sales, on a 13-week basis, were down
6.0% on an owned basis and down4.7% , on an owned-plus-licensed basis.- The Macy’s nameplate saw strength in beauty, particularly fragrances and prestige cosmetics, and its Backstage off-price business while women’s shoes saw continued softness along with relatively weaker performance in cold-weather apparel and accessories.
-
Bloomingdale’s comparable sales, on a 13-week basis, were down
1.5% on an owned basis and down1.6% on an owned-plus-licensed basis.- The Bloomingdale’s nameplate saw strength in beauty, women’s contemporary sportswear and the Bloomingdale’s the Outlets business, while men’s and designer handbags continued to be soft.
-
Bluemercury comparable sales, on a 13-week basis, were up
2.3% on an owned basis.- The Bluemercury nameplate continued to see strength in skincare and color cosmetic categories.
-
Macy’s comparable sales, on a 13-week basis, were down
-
Other revenue of
$255 million $64 million -
Represented
3.1% of net sales, 80 basis points lower than the fourth quarter of 2022. -
Net credit card revenue declined
26% from 2022 to$195 million
-
Represented
-
Gross margin for the quarter was
37.5% , up from34.1% in the fourth quarter of 2022.- Merchandise margin improved 260 basis points year over year, primarily due to lower clearance markdowns.
- Delivery expenses as a percentage of net sales improved 80 basis points from the prior year, reflecting better inventory allocation and ongoing efforts to improve the supply chain.
-
Selling, general and administrative (“SG&A”) expense of
$2.4 billion $51 million -
SG&A expense as a percent of total revenue was
28.7% , 10 basis points higher compared to the fourth quarter of 2022 due to lower total revenue. - SG&A expense dollars benefited from the company’s commitment to ongoing expense discipline, partially offset by investments in the business.
-
SG&A expense as a percent of total revenue was
Full-Year 2023 Highlights
Comparisons are to full-year 2022 unless noted otherwise. Comparisons to 2019 are provided, where appropriate, to benchmark performance. Financial highlights are reported on a 53-week basis for 2023 and a 52-week basis for 2022 unless otherwise noted. Please refer to note 1 within the financial tables regarding reclassifications of certain prior year metrics.
-
Diluted earnings per share of
$0.38 $3.50 -
This compares to a diluted earnings per share of
$4.19 $4.48
-
This compares to a diluted earnings per share of
-
Net sales of
$23.1 billion 5.5% versus 2022.-
Digital sales decreased
7% versus 2022. -
Brick-and-mortar sales decreased
5% versus 2022.
-
Digital sales decreased
-
Comparable sales, on a 52-week basis, down
6.9% on an owned basis and down6.0% on an owned-plus-licensed basis versus 2022. -
Customer counts for the company’s nameplates totaled:
- 41.2 million active customers shopped the Macy’s nameplate
- 4.0 million active customers shopped the Bloomingdale’s nameplate
- Approximately 711 thousand active customers shopped the Bluemercury nameplate
-
Other revenue of
$774 million $233 million -
Represented
3.4% of net sales, 70 basis points lower than 2022. - The year-over-year decline, as expected, reflects the impact of higher net credit losses in the portfolio.
-
Represented
-
Gross margin for the year was
38.8% , up from37.4% in 2022.- Merchandise margin improved 80 basis points from 2022 largely due to lower clearance markdowns and improved freight costs, partially offset by changes in category mix and elevated shortage.
- Delivery expense as a percent of net sales improved 60 basis points from 2022 primarily due to improved carrier rates from contract renegotiations and improvements in inventory allocation.
-
Inventory was up approximately
2% versus 2022 and down approximately16% versus 2019.-
Inventory turnover for the year decreased approximately
2% versus 2022 and increased approximately12% versus 2019.
-
Inventory turnover for the year decreased approximately
-
SG&A expense of
$8.4 billion $86 million -
SG&A expense as a percent of total revenue was
35.1% , 190 basis points higher than 2022, driven by the year-over year decline in total revenue. - The decrease in SG&A expense dollars reflects continued expense discipline, partially offset by investments in the business.
- The year-over-year change also includes the impact of minimum wage increases for store colleagues that were fully implemented as of May 1, 2022.
-
SG&A expense as a percent of total revenue was
A Bold New Chapter
Today, the company also announces, A Bold New Chapter, a strategy designed to challenge the status quo to fundamentally reposition the company, enhance the customer experience, deliver growth and unlock shareholder value. Developed by the Macy’s, Inc. leadership team, with the full support of the board of directors, the strategy aligns the organization to reinvigorate relationships with customers through improved shopping experiences with relevant assortments and compelling value. Details of the strategy can be viewed at www.macysinc.com/investors.
“Over the past several years, we have taken proactive actions to fortify our operations, including strengthening our balance sheet, managing expenses and tightening inventory controls,” said Adrian Mitchell, chief operating and chief financial officer, Macy’s, Inc. “The dedicated work of our teams delivered a solid close to 2023 and provides a strong foundation for us to execute A Bold New Chapter.”
Financial Highlights
All amounts in millions except percentages and per share figures |
Fourth Quarter |
|
Full Year |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net sales |
$ |
8,120 |
|
|
$ |
8,264 |
|
|
$ |
23,092 |
|
|
$ |
24,442 |
|
Comparable Sales |
|
|
|
|
|||||||||||
Owned |
|
(5.4 |
%) |
|
(6.9 |
%) |
|||||||||
Owned plus licensed |
|
(4.2 |
%) |
|
(6.0 |
) % |
|||||||||
Gross margin |
$ |
3,044 |
|
|
$ |
2,814 |
|
|
$ |
8,949 |
|
|
$ |
9,136 |
|
Gross margin rate |
|
37.5 |
% |
|
|
34.1 |
% |
|
|
38.8 |
% |
|
|
37.4 |
% |
Selling, general and administrative expenses |
$ |
2,405 |
|
|
$ |
2,456 |
|
|
$ |
8,375 |
|
|
$ |
8,461 |
|
Impairment, restructuring and other costs |
$ |
(1,007 |
) |
|
$ |
(16 |
) |
|
$ |
(1,027 |
) |
|
$ |
(41 |
) |
Net Income (loss) |
$ |
(71 |
) |
|
$ |
508 |
|
|
$ |
105 |
|
|
$ |
1,177 |
|
Earnings before interest, taxes, depreciation and amortization (EBITDA) |
$ |
156 |
|
|
$ |
887 |
|
|
$ |
1,156 |
|
|
$ |
2,568 |
|
Diluted earnings (loss) per share (EPS) |
$ |
(0.26 |
) |
|
$ |
1.83 |
|
|
$ |
0.38 |
|
|
$ |
4.19 |
|
Adjusted Net income |
$ |
685 |
|
|
$ |
524 |
|
|
$ |
973 |
|
|
$ |
1,259 |
|
Adjusted EBITDA |
$ |
1,168 |
|
|
$ |
910 |
|
|
$ |
2,317 |
|
|
$ |
2,648 |
|
Adjusted Diluted EPS |
$ |
2.45 |
|
|
$ |
1.88 |
|
|
$ |
3.50 |
|
|
$ |
4.48 |
|
2024 Guidance
Macy’s, Inc. introduces 2024 guidance in a transition and investment year that reflects continued operational progress and investments in key customer-focused initiatives in support of its new strategy. The full outlook for 2024, presented on a 52-week basis, can be found in the presentation posted to www.macysinc.com/investors.
|
Fiscal 2024 |
Net sales |
|
Comparable owned plus licensed plus marketplace sales change (52 week basis for both 2024 and 2023) |
Down ~ |
Adjusted diluted earnings per share |
|
Adjusted diluted EPS excludes any potential impact from the proposed credit card late fee ruling. Additionally, the impact of any potential future share repurchases associated with the company’s current share repurchase authorization is not considered.
The company does not provide reconciliations of the forward-looking non-GAAP measures of comparable owned plus licensed plus marketplace sales change and adjusted diluted earnings per share to the most directly comparable forward-looking GAAP measures because the timing and amount of excluded items are unreasonably difficult to fully and accurately estimate. See Important Information Regarding Financial Measures.
Conference Call and Webcasts
A webcast of Macy's, Inc.’s call with analysts and investors to report its fourth quarter and full-year 2023 sales and earnings will be held today (February 27, 2024) at 8:00 a.m. ET. Macy’s, Inc.’s webcast, along with the associated presentation, is accessible to the media and general public via the company's website at www.macysinc.com/investors. To participate in the call, analysts and investors may call 1-877-407-0832. A replay of the conference call will be available on the company’s website or by calling 1-877-660-6853, using passcode 13744146 about three hours after the conclusion of the call. Additional information on Macy’s, Inc., including past news releases, is available at www.macysinc.com/pressroom.
Important Information Regarding Financial Measures
Please see the final pages of this news release for important information regarding the calculation of the company’s non-GAAP financial measures.
About Macy’s, Inc.
Macy’s, Inc. (NYSE: M) is a trusted source for quality brands through our iconic nameplates – Macy’s, Bloomingdale’s and Bluemercury. Headquartered in
Forward-Looking Statements
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 and are subject to significant risks and uncertainties. Actual results could differ materially from those expressed in or implied by the forward-looking statements contained in this release because of a variety of factors, including Macy’s ability to successfully implement A Bold New Chapter strategy, including the ability to realize the anticipated benefits within the expected time frame or at all, conditions to, or changes in the timing of proposed real estate and other transactions, prevailing interest rates and non-recurring charges, the effect of potential changes to trade policies, store closings, competitive pressures from specialty stores, general merchandise stores, off-price and discount stores, manufacturers’ outlets, the Internet and catalogs and general consumer spending levels, including the impact of the availability and level of consumer debt, possible systems failures and/or security breaches, Macy’s reliance on foreign sources of production, including risks related to the disruption of imports by labor disputes, regional or global health pandemics, and regional political and economic conditions, the effect of weather, inflation, and labor shortages, the amount and timing of future dividends and share repurchases, our ability to execute on our strategies or achieve expectations related to environmental, social, and governance matters, and other factors identified in documents filed by the company with the Securities and Exchange Commission, including under the captions “Forward-Looking Statements” and “Risk Factors” in the company’s Annual Report on Form 10-K for the year ended January 28, 2023. Macy’s disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
MACY’S, INC.
Consolidated Statements of Income (Loss) (Unaudited) (All amounts in millions except percentages and per share figures) |
|||||||||||||||||||
|
14 Weeks Ended February 3, 2024 |
|
13 Weeks Ended January 28, 2023 |
||||||||||||||||
|
$ |
|
% to
|
|
% to
|
|
$ |
|
% to
|
|
% to
|
||||||||
Net sales |
$ |
8,120 |
|
|
|
|
|
|
$ |
8,264 |
|
|
|
|
|
||||
Other revenue (Note 1) |
|
255 |
|
|
3.1 |
% |
|
|
|
319 |
|
|
3.9 |
% |
|
|
|||
Total revenue |
|
8,375 |
|
|
|
|
|
|
|
8,583 |
|
|
|
|
|
||||
Cost of sales |
|
(5,076 |
) |
|
(62.5 |
%) |
|
|
|
|
(5,450 |
) |
|
(65.9 |
%) |
|
|
||
Selling, general and administrative expenses |
|
(2,405 |
) |
|
|
|
(28.7 |
%) |
|
|
(2,456 |
) |
|
|
|
(28.6 |
%) |
||
Gains on sale of real estate |
|
41 |
|
|
|
|
0.5 |
% |
|
|
15 |
|
|
|
|
0.2 |
% |
||
Impairment, restructuring and other costs |
|
(1,007 |
) |
|
|
|
(12.0 |
%) |
|
|
(16 |
) |
|
|
|
(0.2 |
) |
||
Operating income (loss) |
|
(72 |
) |
|
|
|
(0.9 |
%) |
|
|
676 |
|
|
|
|
7.9 |
% |
||
Benefit plan income (expense), net |
|
1 |
|
|
|
|
|
|
|
(1 |
) |
|
|
|
|
||||
Settlement charges |
|
(5 |
) |
|
|
|
|
|
|
(7 |
) |
|
|
|
|
||||
Interest expense, net |
|
(27 |
) |
|
|
|
|
|
|
(31 |
) |
|
|
|
|
||||
Income (loss) before income taxes |
|
(103 |
) |
|
|
|
|
|
|
637 |
|
|
|
|
|
||||
Federal, state and local income tax benefit (expense) (Note 2) |
|
32 |
|
|
|
|
|
|
|
(129 |
) |
|
|
|
|
||||
Net income (loss) |
$ |
(71 |
) |
|
|
|
|
|
$ |
508 |
|
|
|
|
|
||||
Basic earnings (loss) per share |
$ |
(0.26 |
) |
|
|
|
|
|
$ |
1.87 |
|
|
|
|
|
||||
Diluted earnings (loss) per share |
$ |
(0.26 |
) |
|
|
|
|
|
$ |
1.83 |
|
|
|
|
|
||||
Average common shares: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic |
|
275.0 |
|
|
|
|
|
|
|
272.2 |
|
|
|
|
|
||||
Diluted |
|
275.0 |
|
|
|
|
|
|
|
278.5 |
|
|
|
|
|
||||
End of period common shares outstanding |
|
274.2 |
|
|
|
|
|
|
|
271.3 |
|
|
|
|
|
||||
Supplemental Financial Measures: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross Margin (Note 3) |
$ |
3,044 |
|
|
37.5 |
% |
|
|
|
$ |
2,814 |
|
|
34.1 |
% |
|
|
||
Depreciation and amortization expense |
$ |
232 |
|
|
|
|
|
|
$ |
219 |
|
|
|
|
|
||||
MACY’S, INC.
Consolidated Statements of Income (Unaudited) (All amounts in millions except percentages and per share figures) |
|||||||||||||||||||
|
53 Weeks Ended February 3, 2024 |
|
52 Weeks Ended January 28, 2023 |
||||||||||||||||
|
$ |
|
% to
|
|
% to
|
|
$ |
|
% to
|
|
% to
|
||||||||
Net sales |
$ |
23,092 |
|
|
|
|
|
|
$ |
24,442 |
|
|
|
|
|
||||
Other revenue (Note 1) |
|
774 |
|
|
3.4 |
% |
|
|
|
|
1,007 |
|
|
4.1 |
% |
|
|
||
Total revenue |
|
23,866 |
|
|
|
|
|
|
|
25,449 |
|
|
|
|
|
||||
Cost of sales |
|
(14,143 |
) |
|
(61.2 |
%) |
|
|
|
|
(15,306 |
) |
|
(62.6 |
%) |
|
|
||
Selling, general and administrative expenses |
|
(8,375 |
) |
|
|
|
(35.1 |
%) |
|
|
(8,461 |
) |
|
|
|
(33.2 |
%) |
||
Gains on sale of real estate |
|
61 |
|
|
|
|
0.3 |
% |
|
|
89 |
|
|
|
|
0.3 |
% |
||
Impairment, restructuring and other costs |
|
(1,027 |
) |
|
|
|
(4.3 |
%) |
|
|
(41 |
) |
|
|
|
(0.2 |
%) |
||
Operating income |
|
382 |
|
|
|
|
1.6 |
% |
|
|
1,730 |
|
|
|
|
6.8 |
% |
||
Benefit plan income, net |
|
11 |
|
|
|
|
|
|
|
20 |
|
|
|
|
|
||||
Settlement charges |
|
(134 |
) |
|
|
|
|
|
|
(39 |
) |
|
|
|
|
||||
Interest expense, net |
|
(135 |
) |
|
|
|
|
|
|
(162 |
) |
|
|
|
|
||||
Losses on early retirement of debt |
|
— |
|
|
|
|
|
|
|
(31 |
) |
|
|
|
|
||||
Income before income taxes |
|
124 |
|
|
|
|
|
|
|
1,518 |
|
|
|
|
|
||||
Federal, state and local income tax expense (Note 2) |
|
(19 |
) |
|
|
|
|
|
|
(341 |
) |
|
|
|
|
||||
Net income |
$ |
105 |
|
|
|
|
|
|
$ |
1,177 |
|
|
|
|
|
||||
Basic earnings per share |
$ |
0.38 |
|
|
|
|
|
|
$ |
4.28 |
|
|
|
|
|
||||
Diluted earnings per share |
$ |
0.38 |
|
|
|
|
|
|
$ |
4.19 |
|
|
|
|
|
||||
Average common shares: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic |
|
274.2 |
|
|
|
|
|
|
|
274.7 |
|
|
|
|
|
||||
Diluted |
|
278.2 |
|
|
|
|
|
|
|
281.1 |
|
|
|
|
|
||||
End of period common shares outstanding |
|
274.2 |
|
|
|
|
|
|
|
271.3 |
|
|
|
|
|
||||
Supplemental Financial Measures: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross Margin (Note 3) |
$ |
8,949 |
|
|
38.8 |
% |
|
|
|
$ |
9,136 |
|
|
37.4 |
% |
|
|
||
Depreciation and amortization expense |
$ |
897 |
|
|
|
|
|
|
$ |
857 |
|
|
|
|
|
||||
MACY’S, INC.
Consolidated Balance Sheets (Unaudited) (millions) |
|||||
|
February 3,
|
|
January 28,
|
||
ASSETS: |
|
|
|
||
Current Assets: |
|
|
|
||
Cash and cash equivalents |
$ |
1,034 |
|
$ |
862 |
Receivables |
|
293 |
|
|
300 |
Merchandise inventories |
|
4,361 |
|
|
4,267 |
Prepaid expenses and other current assets |
|
401 |
|
|
424 |
Total Current Assets |
|
6,089 |
|
|
5,853 |
Property and Equipment – net |
|
5,308 |
|
|
5,913 |
Right of Use Assets |
|
2,305 |
|
|
2,683 |
Goodwill |
|
828 |
|
|
828 |
Other Intangible Assets – net |
|
430 |
|
|
432 |
Other Assets |
|
1,286 |
|
|
1,157 |
Total Assets |
$ |
16,246 |
|
$ |
16,866 |
LIABILITIES AND SHAREHOLDERS’ EQUITY: |
|
|
|
||
Current Liabilities: |
|
|
|
||
Merchandise accounts payable |
$ |
1,913 |
|
$ |
2,053 |
Accounts payable and accrued liabilities |
|
2,434 |
|
|
2,750 |
Income taxes |
|
83 |
|
|
58 |
Total Current Liabilities |
|
4,430 |
|
|
4,861 |
Long-Term Debt |
|
2,998 |
|
|
2,996 |
Long-Term Lease Liabilities |
|
2,986 |
|
|
2,963 |
Deferred Income Taxes |
|
745 |
|
|
947 |
Other Liabilities |
|
950 |
|
|
1,017 |
Shareholders' Equity |
|
4,137 |
|
|
4,082 |
Total Liabilities and Shareholders’ Equity |
$ |
16,246 |
|
$ |
16,866 |
MACY’S, INC.
Consolidated Statements of Cash Flows (Unaudited) (Note 4) (millions) |
|||||||
|
53 Weeks Ended February 3, 2024 |
|
52 Weeks Ended January 28, 2023 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
105 |
|
|
$ |
1,177 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Impairment, restructuring and other costs |
|
1,027 |
|
|
|
41 |
|
Settlement charges |
|
134 |
|
|
|
39 |
|
Depreciation and amortization |
|
897 |
|
|
|
857 |
|
Benefit plans |
|
4 |
|
|
|
17 |
|
Stock-based compensation expense |
|
47 |
|
|
|
54 |
|
Gains on sale of real estate |
|
(61 |
) |
|
|
(89 |
) |
Deferred income taxes |
|
(244 |
) |
|
|
(38 |
) |
Amortization of financing costs and premium on acquired debt |
|
10 |
|
|
|
11 |
|
Changes in assets and liabilities: |
|
|
|
||||
(Increase) decrease in receivables |
|
7 |
|
|
|
(3 |
) |
(Increase) decrease in merchandise inventories |
|
(99 |
) |
|
|
116 |
|
(Increase) decrease in prepaid expenses and other current assets |
|
18 |
|
|
|
(66 |
) |
Decrease in merchandise accounts payable |
|
(113 |
) |
|
|
(129 |
) |
Decrease in accounts payable and accrued liabilities |
|
(347 |
) |
|
|
(174 |
) |
Increase (decrease) in current income taxes |
|
24 |
|
|
|
(75 |
) |
Change in other assets and liabilities |
|
(104 |
) |
|
|
(123 |
) |
Net cash provided by operating activities |
|
1,305 |
|
|
|
1,615 |
|
Cash flows from investing activities: |
|
|
|
||||
Purchase of property and equipment |
|
(631 |
) |
|
|
(888 |
) |
Capitalized software |
|
(362 |
) |
|
|
(407 |
) |
Disposition of property and equipment |
|
86 |
|
|
|
137 |
|
Other, net |
|
(6 |
) |
|
|
(11 |
) |
Net cash used by investing activities |
|
(913 |
) |
|
|
(1,169 |
) |
Cash flows from financing activities: |
|
|
|
||||
Debt issued |
|
961 |
|
|
|
2,809 |
|
Debt issuance costs |
|
(1 |
) |
|
|
(21 |
) |
Debt repaid |
|
(963 |
) |
|
|
(3,100 |
) |
Debt repurchase premium and expenses |
|
— |
|
|
|
(29 |
) |
Dividends paid |
|
(181 |
) |
|
|
(173 |
) |
Increase (decrease) in outstanding checks |
|
2 |
|
|
|
(181 |
) |
Acquisition of treasury stock |
|
(38 |
) |
|
|
(601 |
) |
Net cash used by financing activities |
|
(220 |
) |
|
|
(1,296 |
) |
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
172 |
|
|
|
(850 |
) |
Cash, cash equivalents and restricted cash beginning of period |
|
865 |
|
|
|
1,715 |
|
Cash, cash equivalents and restricted cash end of period |
$ |
1,037 |
|
|
$ |
865 |
|
MACY’S, INC.
Consolidated Financial Statements (Unaudited) |
||
|
||
Notes: |
||
(1) |
|
Other Revenue is inclusive of the following amounts due to the reclassification of Macy’s Media Network net revenue from SG&A to Other Revenue. Reclassifications were made to the prior year’s amounts to conform with the classifications of such amounts in the most recent year. All amounts in millions except percentages. |
|
14 Weeks Ended February 3, 2024 |
|
13 Weeks Ended January 28, 2023 |
||||||||
|
$ |
|
% to
|
|
$ |
|
% to
|
||||
Credit card revenues, net |
$ |
195 |
|
2.4 |
% |
|
$ |
262 |
|
3.2 |
% |
Macy's Media Network revenue, net |
|
60 |
|
0.7 |
% |
|
|
57 |
|
0.7 |
% |
Other Revenue |
$ |
255 |
|
3.1 |
% |
|
$ |
319 |
|
3.9 |
% |
|
|
|
|
|
|
|
|
||||
Net Sales |
$ |
8,120 |
|
|
|
$ |
8,264 |
|
|
||
|
|
|
|
|
|
|
|
||||
|
53 Weeks Ended February 3, 2024 |
|
52 Weeks Ended January 28, 2023 |
||||||||
|
$ |
|
% to
|
|
$ |
|
% to
|
||||
Credit card revenues, net |
$ |
619 |
|
2.7 |
% |
|
$ |
863 |
|
3.5 |
% |
Macy's Media Network revenue, net |
|
155 |
|
0.7 |
% |
|
|
144 |
|
0.6 |
% |
Other Revenue |
$ |
774 |
|
3.4 |
% |
|
$ |
1,007 |
|
4.1 |
% |
|
|
|
|
|
|
|
|
||||
Net Sales |
$ |
23,092 |
|
|
|
$ |
24,442 |
|
|
||
(2) |
|
Income tax benefit of |
|
|
|
|
|
Income tax expense of |
|
|
|
(3) |
|
Gross margin is defined as net sales less cost of sales. |
|
|
|
(4) |
|
Restricted cash of |
MACY’S, INC.
Important Information Regarding Non-GAAP Financial Measures
The company reports its financial results in accordance with
The company does not provide reconciliations of the forward-looking non-GAAP measures of comparable owned plus licensed sales change and adjusted diluted earnings per share to the most directly comparable forward-looking GAAP measures because the timing and amount of excluded items are unreasonably difficult to fully and accurately estimate. For the same reasons, the company is unable to address the probable significance of the unavailable information, which could be material to future results.
Non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, the company's financial results prepared in accordance with GAAP. Certain of the items that may be excluded or included in non-GAAP financial measures may be significant items that could impact the company's financial position, results of operations or cash flows and should therefore be considered in assessing the company's actual and future financial condition and performance. Additionally, the amounts received by the company on account of sales of departments licensed to third parties are limited to commissions received on such sales. The methods used by the company to calculate its non-GAAP financial measures may differ significantly from methods used by other companies to compute similar measures. As a result, any non-GAAP financial measures presented herein may not be comparable to similar measures provided by other companies.
MACY’S, INC.
Important Information Regarding Non-GAAP Financial Measures (All amounts in millions except percentages and per share figures) |
||||||||
Changes in Comparable Sales |
||||||||
|
14 Weeks Ended February 3, 2024 vs. 13 Weeks Ended January 28, 2023 |
|||||||
|
Macy’s, Inc. |
|
Macy’s |
|
Bloomingdale’s |
|||
Decrease in comparable sales on an owned basis (Note 5) |
(5.4 |
%) |
|
(6.0 |
%) |
|
(1.5 |
%) |
Comparable sales impact of departments licensed to third parties (Note 6) |
1.2 |
% |
|
1.3 |
% |
|
(0.1 |
%) |
Decrease in comparable sales on an owned plus licensed basis |
(4.2 |
%) |
|
(4.7 |
%) |
|
(1.6 |
%) |
|
53 Weeks Ended February 3, 2024 vs. 52 Weeks Ended January 28, 2023 |
|||||||
|
Macy's, Inc. |
|
Macy's |
|
|
|||
Decrease in comparable sales on an owned basis (Note 5) |
(6.9 |
%) |
|
(7.6 |
%) |
|
(2.7 |
%) |
Comparable sales impact of departments licensed to third parties (Note 6) |
0.9 |
% |
|
1.0 |
% |
|
(0.4 |
%) |
Decrease in comparable sales on an owned plus licensed basis |
(6.0 |
%) |
|
(6.6 |
%) |
|
(3.1 |
%) |
Notes: |
||
(5) |
|
Represents the period-to-period percentage change in net sales from stores in operation for one full fiscal year during the 14 and 53 weeks ended February 3, 2024, and the 13 and 52 weeks ended January 28, 2023, adjusting for the 53rd week in fiscal 2023. Such calculation includes all digital sales and excludes commissions from departments licensed to third parties. Stores impacted by a natural disaster or undergoing significant expansion or shrinkage remain in the comparable sales calculation unless the store, or material portion of the store, is closed for a significant period of time. Definitions and calculations of comparable sales may differ among companies in the retail industry. |
|
|
|
(6) |
|
Represents the impact of including the sales of departments licensed to third parties occurring in stores in operation throughout the year presented and the immediately preceding year and all online sales, including Marketplace sales, adjusting for the 53rd week in fiscal 2023, in the calculation of comparable sales. Macy’s and Bloomingdale’s license third parties to operate certain departments in its stores and online and receive commissions from these third parties based on a percentage of their net sales, while Bluemercury does not participate in licensed or Marketplace businesses. In its financial statements prepared in conformity with GAAP, the company includes these commissions (rather than sales of the departments licensed to third parties and Marketplace) in its net sales. The company does not, however, include any amounts in respect of licensed department or Marketplace sales (or any commissions earned on such sales) in its comparable sales in accordance with GAAP (i.e., on an owned basis). The amounts of commissions earned on sales of departments licensed to third parties and from the digital Marketplace are not material to its net sales for the periods presented. |
|
|
|
Non-GAAP financial measures, excluding certain items below, are reconciled to the most directly comparable GAAP measure as follows:
- EBITDA and adjusted EBITDA are reconciled to GAAP net income.
- Adjusted net income is reconciled to GAAP net income.
- Adjusted diluted earnings per share is reconciled to GAAP diluted earnings per share.
EBITDA and Adjusted EBITDA
|
14 Weeks Ended February 3, 2024 |
|
13 Weeks Ended January 28, 2023 |
|||
Net income (loss) |
$ |
(71 |
) |
|
$ |
508 |
Interest expense, net |
|
27 |
|
|
|
31 |
Federal, state and local income tax expense (benefit) |
|
(32 |
) |
|
|
129 |
Depreciation and amortization |
|
232 |
|
|
|
219 |
EBITDA |
|
156 |
|
|
|
887 |
Impairment, restructuring and other costs |
|
1,007 |
|
|
|
16 |
Settlement charges |
|
5 |
|
|
|
7 |
Adjusted EBITDA |
$ |
1,168 |
|
|
$ |
910 |
|
53 Weeks Ended February 3, 2024 |
|
52 Weeks Ended January 28, 2023 |
||
Net income |
$ |
105 |
|
$ |
1,177 |
Interest expense, net |
|
135 |
|
|
162 |
Losses on early retirement of debt |
|
— |
|
|
31 |
Federal, state and local income tax expense |
|
19 |
|
|
341 |
Depreciation and amortization |
|
897 |
|
|
857 |
EBITDA |
|
1,156 |
|
|
2,568 |
Impairment, restructuring and other costs |
|
1,027 |
|
|
41 |
Settlement charges |
|
134 |
|
|
39 |
Adjusted EBITDA |
$ |
2,317 |
|
$ |
2,648 |
Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share
|
14 Weeks Ended February 3, 2024 |
|
13 Weeks Ended January 28, 2023 |
||||||||||||
|
Net Income (Loss) |
|
Diluted Earnings (Loss) Per Share |
|
Net Income |
|
Diluted Earnings Per Share |
||||||||
As reported |
$ |
(71 |
) |
|
$ |
(0.26 |
) |
|
$ |
508 |
|
|
$ |
1.83 |
|
Impairment, restructuring and other costs |
|
1,007 |
|
|
|
3.60 |
|
|
|
16 |
|
|
|
0.06 |
|
Settlement charges |
|
5 |
|
|
|
0.02 |
|
|
|
7 |
|
|
|
0.02 |
|
Income tax impact of certain items identified above |
|
(256 |
) |
|
|
(0.91 |
) |
|
|
(7 |
) |
|
|
(0.03 |
) |
As adjusted to exclude certain items above |
$ |
685 |
|
|
$ |
2.45 |
|
|
$ |
524 |
|
|
$ |
1.88 |
|
|
53 Weeks Ended February 3, 2024 |
|
52 Weeks Ended January 28, 2023 |
||||||||||||
|
Net Income |
|
Diluted Earnings Per Share |
|
Net Income |
|
Diluted Earnings Per Share |
||||||||
As reported |
$ |
105 |
|
|
$ |
0.38 |
|
|
$ |
1,177 |
|
|
$ |
4.19 |
|
Impairment, restructuring and other costs |
|
1,027 |
|
|
|
3.69 |
|
|
|
41 |
|
|
|
0.15 |
|
Settlement charges |
|
134 |
|
|
|
0.48 |
|
|
|
39 |
|
|
|
0.14 |
|
Losses on early retirement of debt |
|
— |
|
|
|
— |
|
|
|
31 |
|
|
|
0.11 |
|
Income tax impact of certain items identified above |
|
(293 |
) |
|
|
(1.05 |
) |
|
|
(29 |
) |
|
|
(0.11 |
) |
As adjusted to exclude certain items above |
$ |
973 |
|
|
$ |
3.50 |
|
|
$ |
1,259 |
|
|
$ |
4.48 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240227850623/en/
Media – Chris Grams
communications@macys.com
Investors – Pamela Quintiliano
investors@macys.com
Source: Macy’s, Inc.
FAQ
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What was the adjusted diluted EPS for Macy’s in the fourth quarter?
