Macy's, Inc. Q2 FY2025 earnings call

• Tony Spring highlighted the success of the Bold New Chapter strategy, with strong comp sales across segments, improved customer experience, and progress in reimagining Macy's, accelerating luxury with Bloomingdale's and Bluemercury, and simplifying operations.
• Tom Edwards discussed financial results, including net sales, gross margin, SG&A expense, adjusted EBITDA, cash flow, balance sheet strengthening through financing transactions, and inventory management.

Macy's Inc. achieved a comparable sales growth of 1.9%, with GoForward businesses delivering 2.2% comparable sales growth. Macy's had 1.2% comparable sales growth, led by GoForward Macy's at 1.5% including Reimagined 125 at 1.4%. Bloomingdale's saw a 5.7% comparable sales growth, achieving its highest second quarter sales and net promoter score on record. Bluemercury had 1.2% comparable sales growth for its 18th consecutive quarter. Macy's Inc. net sales were $4.8 billion, Bloomingdale's net sales were up 4.6%, and Bluemercury net sales were up 3.3%. Revenue contribution: Macy's Inc. net sales made up a significant portion, with Bloomingdale's and Bluemercury also contributing meaningfully to the overall revenue.

• Fiscal year guidance revised to net sales $21.15 to $21.45 billion, comparable sales down 1.5% to up 0.5%, adjusted EPS $1.70 to $2.05.
• Third quarter guidance: net sales $4.5 to $4.6 billion, comparable sales down 1.5% to up 0.5%, adjusted EPS loss of $0.20 to $0.15 including asset sale gains.
• Assumes current tariff rates, with a 40 to 60 basis point impact to gross margin, primarily flowing through the fourth quarter.

• Tariffs posing a risk to gross margin, with an incremental impact of 40 to 60 basis points compared to prior expectations.
• Consumer uncertainty and fluid macro environment affecting sales and guidance assumptions.

Q: Matthew Boss asked about the sequential improvement in same-store sales and momentum in the third quarter.

A: Tony Spring responded that there was strong growth across categories, July was the strongest month, and there was a good start to back to school, but caution was needed due to tariff environment.

Q: Dana Telsey inquired about learnings from Reimagined 125 stores and pricing with tariffs.

A: Tony Spring talked about positive performance in Reimagined 125 stores due to better staffing, visual merchandising, and local empowerment; Tom Edwards added on tariffs, mentioning increased impact and mitigation efforts.

Q: Blake Anderson asked about consumer tone change.

A: Tony Spring said consumer was resilient but cautious guidance was maintained due to tariff impact.

Q: Oliver Chen asked about private brands and comps needed.

A: Tony Spring discussed progress in private brands and Tom Edwards talked about SG&A leverage and gross margin opportunities.

Q: Alex Straton asked about SG&A improvement and Bloomingdale's comp acceleration.

A: Tom Edwards discussed SG&A savings and Tony Spring talked about Bloomingdale's strong momentum.

Q: Ryan Boldron asked about traffic, ticket, and tariffs.

A: Tony Spring and Tom Edwards discussed traffic improvement, inventory position, and tariff mitigation.

Q: Tracy Kogan asked about price increases and elasticity.

A: Tony Spring and Tom Edwards talked about early price increases, consumer response, and multi-brand advantage.

Q: Michael Benetti asked about Bloomingdale's, tariffs, and credit.

A: Tony Spring and Tom Edwards discussed Bloomingdale's growth, tariff impact, and credit portfolio strength.

Q: Paul Carney asked about tariff impact next year.

A: Tony Spring and Tom Edwards talked about early stages of tariff mitigation and future guidance.

Q: Jay Sole asked about balance between leverage and growth.

A: Tony Spring and Tom Edwards discussed investment balance, customer-facing initiatives, and SG&A leverage.

Q: Janet Kloppenburg asked about markdowns, pricing, and tariffs next year.

A: Tony Spring and Tom Edwards talked about markdowns, consumer resilience, and future tariff clarity.