Q1 2024 Macy's Inc Earnings Call

Operator: Greetings and welcome to the Macy's Inc. first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to Pamela Quintiliano, Vice President of Investor Relations. Pamela, you may begin.

Greetings and welcome to the Macy's, Inc. First quarter 2024 earnings call. At this time, all participants are in a listen only mode.

Speaker Change: <unk> and answer session will follow the formal presentation, if anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded I would now like to turn the call over to Pamela Quintile Yano, Vice President of Investor Relations Pamela you may begin.

Pamela Nagler Quintiliano: Thank you, Operator. Good morning, everyone, and thanks for joining us.

Speaker Change: Thank you operator, good morning, everyone and thanks for joining us.

Pamela Nagler Quintiliano: With me on the call today are Tony Spring, our chairman and CEO, and Adrian Mitchell, our COO and CFO. Along with our first quarter 2024 press release, a presentation has been posted on the investor section of our website, macy'sinc.com, and is being displayed live during today's webcast. Unless otherwise noted, the comparisons we provide will be versus 2023.

Speaker Change: With me on the call today are Tony Spring, our chairman and CEO and Adrian Mitchell, our CLO and CFO, along with our first quarter 2024 press release, a presentation has been posted on the investors section of our website Macy's, Inc. Dot com and its being displayed lives during today's webcast.

Speaker Change: Unless otherwise noted comparisons we provide will be versus 2023, all references to our prior expectation outlook or guidance refer to information provided on our February 27 earnings call unless otherwise noted. In addition, all references to comp sales growth throughout todays prepared remarks represent comparable.

Pamela Nagler Quintiliano: All references to our prior expectations, outlook, or guidance refer to information provided on our February 27th earnings call, unless otherwise noted. In addition, all references to comp sales growth throughout today's prepared remarks represent comparable owned plus licensed plus marketplace sales growth and owned plus licensed sales growth for our store locations, unless otherwise noted. All forward-looking statements are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Speaker Change: Plus license plus marketplace sales growth and owned plus licensed sales growth for our store location unless otherwise noted.

Pamela Nagler Quintiliano: These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and assumptions mentioned today. A detailed discussion of these factors and uncertainties is contained in our filings with the Securities and Exchange Commission. In discussing the results of our operations, we will be providing certain non-GAAP financial measures. You can find additional information regarding these non-GAAP financial measures, as well as others, in the Investors section of our website. Today's call is being webcast on our website. A replay will be available approximately two hours after the conclusion of this call. With that, I'll turn it over to Tony.

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 the expectations and assumptions mentioned today.

Speaker Change: Detailed discussion of these factors and uncertainties is contained in our filings with the Securities and Exchange Commission.

Speaker Change: In discussing the results of our operations, we will be providing certain non-GAAP financial measures you can find additional information regarding these non-GAAP financial measures as well as others on the investors section of our website.

Speaker Change: Today's call is being webcast on our website a replay will be available approximately two hours. After the conclusion of this call with that I'll turn it over to Tony.

Antony Spring: Thanks, Pam, and good morning, everyone. On today's call, we will provide updates on our Bold New Chapter strategy, as well as our first quarter results and second quarter and full year outlook. But first, let's discuss the current macroclimate. Our customers across all three nameplates continue to benefit from strong wage and job growth. However, inflationary pressures persist, and they're feeling that pinch. The outlook provided on our fourth-quarter earnings call, as well as today's update, assumes our customers will continue to carefully scrutinize their discretionary purchases.

Antony Spring: Thanks, Pam and good morning, everyone on today's call, we will provide updates on our bold new chapter strategy as well as our first quarter results and second quarter and full year outlooks, but first let's discuss the current macro climate our customers across all three named place continue to benefit from strong wage and GE.

Antony Spring: Growth, however, inflationary pressures persist and they're feeling that pinch the.

Antony Spring: The outlook provided on our fourth quarter earnings call as well as todays update assumes our customers will continue to carefully scrutinize their discretionary purchases.

Antony Spring: We are reading and reacting to the dynamic economic environment and competitive promotional landscape in real-time. Regardless of income tier, we know our customers respond to fashion newness at compelling price points in an engaging environment. We continue to evaluate inventory depth and composition to ensure we strike the right balance.

Antony Spring: We are reading and reacting to the dynamic economic environment and competitive promotional landscape in real time, regardless of income tier we know our customer responds to fashion newness at compelling price points and an engaging environment, we continue to evaluate inventory depth and composition to ensure we strike the right.

Antony Spring: Balance.

Antony Spring: Despite the ongoing pressure on the consumer we are confident in our ability to return to profitable growth as we execute on the pillars of our Boulder chapter strategy, which are one to strengthen the macys nameplate two to accelerate luxury growth and three to simplify and modernize end to end operations.

Antony Spring: Despite the ongoing pressure on the consumer, we are confident in our ability to return to profitable growth as we execute on the pillars of our bold new chapter strategy, which are, one, to strengthen the Macy's nameplate, two, to accelerate luxury growth, and three, to simplify and modernize end-to-end operations. This morning, we are pleased to report that, although it's early days, we are on or ahead of plan across all three pillars and that our first quarter EPS results exceeded our outlook. Now, a brief update on our Bold New Chapter progress.

Antony Spring: <unk>.

Antony Spring: This morning, we are pleased to report that although early days, we are on or ahead of plan across all three pillars and that our first quarter EPS results exceeded our outlook.

Antony Spring: At our largest nameplate, Macy's, the customer is responding well to our omni-channel initiatives across product, presentation, and experience. In luxury, we are pleased with Bloomingdale's advanced contemporary growth and acceleration of digital. While at Blue Mercury, skin care remains a differentiator and a standout. For both nameplates, we are evaluating new store opportunities that will strengthen our ability to accelerate Omni growth. In end-to-end operations, we are actively advancing solutions to consolidate capacity, increase automation, and reduce costs across the network.

Antony Spring: Now a brief update on our bold new chapter progress.

Antony Spring: At our largest nameplate Macy's the customers responding well to our omni channel initiatives across product presentation and experience.

Antony Spring: And luxury we are pleased with bloomingdale's advanced contemporary growth an acceleration of digital.

Antony Spring: While at Blue Mercury skin care remains a differentiator and a standout for both nameplates, we're evaluating new store opportunities that will strengthen our ability to accelerate omni growth.

Antony Spring: And end to end operations, we are actively advancing on solutions to consolidate capacity increase automation and reduce costs across the network.

Antony Spring: And for our non-go-forward Macy's locations and distribution centers, given our strong balance sheet, we are able to be thoughtful and strategic with our approach to monetization. We have good traction thus far and are encouraged by the pace of dealmaking. The entire Macy's Inc. organization is focused on understanding and meeting the evolving needs and preferences of our customers. They are committed to our future and making sure that our bold new chapter is a success.

Antony Spring: And for a non go forward Macy's locations and distribution centers, given our strong balance sheet, we are able to be thoughtful and strategic with our approach to monetization. We have good traction thus far and are encouraged by the pace of dealmaking.

Antony Spring: The entire Macy's, Inc. Organization is focused on understanding and meeting the evolving needs and preferences of our customers.

Antony Spring: They are committed to our future and making sure our bold new chapters of success.

Antony Spring: The level of enthusiasm and engagement is palpable, and every single function is working together to get a better result. I am pleased to report that the first quarter net sales of $4.8 billion were near the high end of our outlook, and adjusted EPS of $0.27 was above our outlook. By nameplate, Macy's was in line with our expectations. Comps were down 0.4% and were led by our first 50 locations, which registered a 3.4% comp gain.

Antony Spring: The level of enthusiasm and engagement is palpable and every single function is working together to get a better result.

Antony Spring: I am pleased to report that the first quarter net sales of 4.8 billion were near the high end of our outlook and adjusted EPS of <unk> 27 was above our outlook.

Antony Spring: By nameplate Macy's was in line with our expectations comps were down <unk>, 4% and were led by our first 50 locations, which registered a 3.4% comp gain.

Antony Spring: The first 50 serve as pilots to test new ideas that are based on customer feedback. Results are encouraging, as they are an early indicator for the go-forward Macy's fleet and ultimately the entire Macy's Inc. go-forward business' ability to return to growth. The first 50 represent what we can do when we deliver on our customers' expectations. During the first quarter, we enhanced merchandising through an elevated product rollout. The full price and planned promotional sell-through of new and expanded assortments has been strong. Importantly, our vendor partners are embracing our journey. They are joining us and helping us raise the bar on both the quality and the differentiation of our assortments, and we truly appreciate their commitment and support.

Antony Spring: The first 50 surface pilots to test new ideas that are based on customer feedback.

Antony Spring: <unk> are encouraging as they are an early indicator for the go forward Macy's fleet and ultimately the entire Macy's Inc. Go forward businesses ability to return to growth.

Antony Spring: The first 50 represent what we can do when we deliver on our customers' expectations. During the first quarter, we enhanced merchandising through elevated product rollouts.

Antony Spring: Full price than planned promotional sell throughs of new and expanded Assortments has been strong.

Antony Spring: Importantly, our vendor partners are embracing our journey they are joining with us and helping us raise the bar on both the quality and the differentiation of our Assortments and we truly appreciate their commitment and support.

Antony Spring: During the quarter, we also piloted new marketing and animation, bringing retail as a theater to life. Activations included personal styling sessions, fashion shows, beauty services such as fragrance bottle engraving, and craft stations. Our customers were engaged, and these events served as strong traffic and sales drivers. Rounding out our first 50 conversations, during the quarter, we shifted store staffing to key merchandise departments and to the checkout area and added visual merchandise staff. These changes were well-received by our customers. Net promoter scores improved roughly 500 basis points year over year and were over 250 basis points above all other Macy's stores. However, improvements are not limited to our first 50.

Antony Spring: During the quarter, we also piloted new marketing and animation, bringing retail us theater to life Activations included personal styling sessions fashion shows beauty services, such as fragrance bottle engraving and craft stations. Our customers. We are engaged in these events serve as strong traffic and sales drivers.

Antony Spring: Rounding out our first 50 conversation during the quarter, we shifted store staffing to key merchandise departments and to the checkout area and added visual merchandise staffing.

Antony Spring: These changes were well received by our customers net promoter scores improved roughly 500 basis points year over year and were over 250 basis points above all other Macy's stores.

Antony Spring: Improvements are not limited to our first 50 across the entire Macy's nameplate, we are offering product newness in our most important categories within apparel, we introduced and expanded distribution in several market brands to address areas of opportunity, where we have experienced softness in both women's and men's assortments.

Antony Spring: Across the entire Macy's nameplate, we are offering product newness in our most important categories. For Apparel, we introduced and expanded distribution in several market brands to address areas of opportunity where we have experienced weakness in both women's and men's assortments. Customers are responding well to Donna Karan, which is a new brand for us, where we're seeing no price resistance. We also expanded distribution and content for Free People, French Connection, Karl Lagerfeld, and Hugo Boss, just to name a few. However, positive customer response to fashion newness was partially offset by weakness in select warmer weather categories.

Antony Spring: Customers are responding well to Donna Karan, which is a new brand for us where we're seeing no price resistance. We also expanded distribution and content of free people French connection Karl Lagerfeld, and Hugo boss just to name a few.

Antony Spring: Positive customer response to fashion newness was partially offset by weakness in select warmer weather categories.

Antony Spring: Our private brand apparel initiative is moving forward as planned. We have completed the majority of our brand exits and reimagined and launched several new ones. During the quarter, INC and Style & Co., which have led the initiative, continue to outperform Macy's Women's Apparel. This summer, we are refreshing our kids' brands, epic threads, and first impressions. And later this year, we'll introduce a new men's contemporary private brand, which will be the last launch of this phase. In the near term, as this transition continues, we expect private brand sales volumes to remain depressed relative to historic levels and to realize improvements beginning later in the year.

Antony Spring: Our private brand apparel initiative is moving forward as planned we have completed the majority of our brand exits and re imagine has launched several new ones during the quarter.

Antony Spring: I N C in style and co which have led the initiative continued to outperform the macys women apparel segment. This summer we are refreshing our kids brands epic threads and first impressions and later this year, we'll introduce our new men's contemporary private brand, which would be the last launch of this phase.

Antony Spring: In the near term as this transition continues we expect private brand sales volumes to remain depressed relative to historic levels and to realize improvements beginning later in the year.

Antony Spring: As a reminder, in fiscal 2023, private brands represented about 15% of Macy's sales, reflecting the exit of several heritage women's brands. Beyond apparel, accessories were better than expected, with strengths in women's shoes and fine jewelry offset by ongoing weakness in handbags. Beauty continued to be a standout and key traffic driver, driven primarily by fragrances. Our selection of brands, including Chanel, Dior, YSL, Carolina Herrera, and Valentino, as well as our strong presentation online and in stores, keeps our customers engaged. In Big Ticket and Home, the overall business remains challenged, although we've seen some recent traction in certain categories. We believe there is an opportunity to recover lost sales.

Antony Spring: As a reminder, in fiscal 'twenty twenty-three private brands represented about 15% of Macy's sales, reflecting the exit of several heritage women's brands.

Antony Spring: Beyond apparel accessories was better than expectations with strength in women's shoes, and fine jewelry offset by ongoing weakness in handbags.

Antony Spring: Beauty continues to be a standout and key traffic driver driven primarily by fragrances, our selection of brands, including Chanel to your Y S. L Carolina Herrera and Valentino.

Antony Spring: As well as our strong presentation online and in stores keeps our customers engaged.

Antony Spring: And big ticket in home the overall business remains challenged although we've seen some recent traction in certain categories. We believe there is an opportunity to recover lost sales. The team is actively working on the market brand matrix and we plan to begin a complete refresh of our home private brands in fiscal 2025.

Antony Spring: The team is actively working on the market brand matrix, and we plan to begin a complete refresh of our home private brands in fiscal 2025. Digital is also an important part of our Bold New Chapter strategy. It serves as both a gateway to the Macy's brand and as a source of commerce and omni-engagement. Under new leadership, the team is making progress on optimizing the customer journey, including addressing places of greatest friction and enhancing and expanding the shopping experience across platforms. Recently, we launched an online baby registry with over 150 new brands, which has been well received. In addition, Marketplace provides an opportunity to serve our customers better and gain a greater share of their wallets.

Antony Spring: Digital is also an important part of our bold new chapter strategy. It serves as both a gateway to the Macy's brand and as a source of commerce and omni engagement.

Antony Spring: Under new leadership, the team is making progress on optimizing the customer journey, including addressing places of greatest friction and enhancing and expanding the shopping experience across platforms.

Antony Spring: Recently, we launched an online baby registry with over 150, new brands, which has been well received.

Antony Spring: In addition, marketplace provides an opportunity to serve our customer better and gain a greater share of their wallet. For example, this year, we're offering a compelling selection of electronics for father's day and the graduation season.

Antony Spring: For example, this year we're offering a compelling selection of electronics for Father's Day and the graduation season. Our digital and marketing teams are working together closely to leverage Macy's iconic events and create a modern and cohesive experience. We kicked off the spring season in Herald Square with our 49th annual Flower Show, where we partnered with Christian Dior to create floral installations using 16,000 individual plants representing over 50 varieties.

Antony Spring: Our digital and marketing teams are working together closely to leverage macys iconic events and create a modern and cohesive experience.

Antony Spring: We kicked off the spring season in Herald square with our 49th annual Flower show, where we partner with Christian do our parfums to create floral installations using 16000 individual plants representing over 50 varieties.

Antony Spring: The installation centered around different do you our sense and were supported by interactive components, including an online activation about the origins of Mr. Your.

Antony Spring: The installations centered around different Dior scents and were supported by interactive components, including an online activation about the origins of Miss Dior. We are excited for our newest marketing campaign, The Greatest Hits of Summer, which represents the beginning of a modern interpretation of the Macy's brand and is the first under our new head of marketing. Finally, during the quarter, we opened a 31,000 square foot, small format Macy's in Mount Laurel, New Jersey.

Antony Spring: We are excited for our newest marketing campaign, the greatest hits of summer, which represents the beginning of a modern interpretation of the Macy's brand and as of the first under our new head of marketing.

Speaker Change: Finally during the quarter, we opened a 31000 square foot small format Macy's in Mount Laurel, New Jersey with each new opening we continue to learn and adjust we remain on track to introduce 11 more this year, bringing the total to 24 by year end.

Antony Spring: With each new opening, we continue to learn and adjust. We remain on track to introduce 11 more this year, bringing the total to 24 by year end. Turning to luxury, Bloomingdale's and Blue Mercury continue to be bright spots within our portfolio. Both foster brand love and loyalty through unique customer experiences and a curated selection of market and private brands across price ranges. At Bloomingdale's, our first quarter results were in line with our expectations.

Speaker Change: Turning to luxury bloomingdale's and Blue Mercury continued to be bright spots within our portfolio.

Speaker Change: Both foster brand love and loyalty through the unique customer experiences and curated selection of market in private brands across price points.

Speaker Change: At Bloomingdale's first quarter results were in line with our expectations, while our customer is not immune to macro pressures and has become more judicious with their spend the power of bloomingdale's position in the upscale market is its diversification across categories and price points. It has the flexibility and the tools to quickly adjust.

Antony Spring: While a customer is not immune to macro pressures and has become more judicious with their spend, the power of Bloomingdale's position in the upscale market is its diversification across categories and price ranges. It has the flexibility and the tools to quickly adjust to the market, allowing it to gain wallet share even as there are shifts in popular categories and brands. During the quarter, Bloomingdale's top two household income brackets and loyalty tiers increased their total spend.

Speaker Change: To the market, allowing it to gain wallet share even if there are shifts in popular categories and brands.

Speaker Change: During the quarter Bloomingdale's top two household income brackets and loyalty tiers increase their total spend.

Antony Spring: Contemporary apparel, including brands like Legence and Mother and Sankissette, just to name a few, continue to be well-received. Along with the beauty category, they serve as powerful engines for growth. And our private brands at Bloomingdale's are a complement to our contemporary matrix. During the quarter, Aqua registered a double-digit year-over-year increase in its ready-to-wear sales, benefiting from its quiet, luxury-inspired collaboration with celebrity stylist Liat Barak.

Speaker Change: Contemporary apparel, including brands like La Johnson mother, and sank a stat just to name a few continue to be well received along with the beauty category. They serve as powerful engines for growth.

Speaker Change: And our private brands at Bloomingdale's or a complement to our contemporary matrix during the quarter Aqua registered a double digit year over year increase and it's ready to wear sales benefiting from the quiet luxury inspired collaboration with celebrity stylist that Barack.

Antony Spring: Looking ahead, we have several exciting upcoming collaborations on the horizon. We remain committed to growing the Bloomingdale's physical footprint and associated digital presence and are on track to open roughly 15 new Bloomies and Bloomingdale's The Outlet locations through fiscal 26, including three later this year. Comps at both concepts are continuing to outperform the broader fleet, giving us confidence in our expansion strategy. Digital continues to be a strength and a great expression of the Bloomingdale's brand.

Speaker Change: Looking ahead, we have several exciting upcoming collaborations on the horizon.

Speaker Change: We remain committed to growing the bloomingdale's physical footprint and associated digital presence and are on track to open roughly 15, new Bloom is and bloomingdale's the outlet locations through fiscal 'twenty six including three later this year comps at both concepts are continuing to outperform the broader fleet, giving us confidence in our expand.

Speaker Change: <unk> strategy.

Speaker Change: Digital continues to be a strength and great expression of the Bloomingdale's brand, we have a highly engaged customer who appreciates the depth and breadth of our offering across price points. This has been complemented by marketplace, which enriches our assortment and content helps us gain wallet share amongst loyal customers and introduce new customers to bloomingdales.

Antony Spring: We have a highly engaged customer who appreciates the depth and breadth of our offering across price points. This has been complemented by Marketplace, which enriches our assortment and content, helps us gain wallet share amongst loyal customers, and introduces new customers to Bloomington. At Blue Mercury, we experienced our 13th consecutive quarter of comp growth, driven by continued strength in skin care and the expansion of key brand partners including Cicely Paris, SkinCeuticals, and Augustinus Bodder.

Speaker Change: At Blue Mercury, we experienced our 13th consecutive quarter of comp growth driven by continued strength in skincare and the expansion of key brand partners, including Sicily, Paris skin suitor goals and Augusta units Baader.

Antony Spring: Our plans to open at least 30 new locations and remodel about 30 others are underway, with one new location and three remodels slated for the second quarter. These stores will incorporate learnings from our recent Bronxville and New Canaan remodels to inform our future stores, including an elevated aesthetic that improves the luxury perception of Blue Mercury, an expanded assortment, and an enhanced selling model, which has had a positive impact on the client experience.

Speaker Change: Our plans to open at least 30, new locations and remodel about 30, others are underway with one new location and three remodels slated for the second quarter.

Speaker Change: These stores will incorporate learnings from our recent Bronxville, new Canaan remodels to inform our future stores, including an elevated aesthetic which improves the luxury perception of Bloomberg right, an expanded assortment and an enhanced selling model, which has had a positive impact on the client experience.

Antony Spring: Overall, we continue to view fiscal 2024 as a transition and investment year for Macy's Inc. Although it is early stages, we are proud of the progress we are making on our bold new chapter strategy. Our teams are collaborating to make quick and strategic decisions, and we're making investments to create an improved experience that will better serve our customers and set the foundation for our future. With that, I'll hand it over to Adrian to provide more detail on our recent performance and our outcomes.

Speaker Change: Overall, we continue to view fiscal 2024, as a transition and investment year for Macy's Inc. Although early stages. We are proud of the progress we are making on our bold new chapter strategy. Our teams are collaborating to make quick and the strategic decisions and we're making investments to create an improved experience that will better serve our customer.

Speaker Change: And sets the foundation for our future.

Speaker Change: With that I'll hand, it over to Adrian to provide more detail on our recent performance and our outlook.

Adrian V. Mitchell: Thank you, Tony, and good morning, everyone. Let me start by thanking our teams for their support of our bold new chapter strategy. As I've been out in the field visiting our stores and distribution centers, I've been impressed with the dedication and commitment to our customers. As Tony mentioned, we're encouraged by early progress across all three pillars of our strategy and the positive impact our investments are having on the go-forward Macy's, Inc. enterprise and our largest nameplate, Macy's.

Adrian V. Mitchell: Thank you Tony and good morning, everyone.

Adrian V. Mitchell: Let me start by thanking our teams for their support of our bold new chapter strategy as I've been out in the field visiting our stores and distribution centers I've been impressed with the dedication and commitment to our customers.

As Tony mentioned, we're encouraged by early progress across all three pillars of our strategy and the positive impact of our investments are having on the go forward Macy's, Inc, enterprise and our largest nameplate Macy's.

Adrian V. Mitchell: Total Macy's Inc. enterprise comps were down 0.3% year-over-year, and net sales were $4.8 billion, down 2.7% from last year, and near the high end of our outlook. For the Go Forward Macy's business, defined as Macy's, Bloomingdale's, and Blue Mercury Go Forward locations plus digital, comps rose 0.1% year over year. We are pleased with the emerging trend.

Speaker Change: Total Macy's, Inc. Enterprise comps were down <unk>, 3% year over year, and net sales were $4 $8 billion down two 7% to last year and near the high end of our outlook.

Speaker Change: For the go forward Macy's, Inc business defined as Macy's Bloomingdale's and Blue Mercury go forward locations, plus digital comps rose 1% year over year.

Speaker Change: We are pleased with the emerging trends we view our first 50 locations go forward Macy's nameplate and go forward Macy's Inc. Business as evidence that our bold new chapter investments are working and they are what we are tracking most closely as predictors of our ability to return to profitable growth.

Adrian V. Mitchell: We view our first 50 locations, the Go Forward Macy's nameplate, and Go Forward Macy's Inc. business as evidence that our bold new chapter investments are working, and they are what we are tracking most closely as predictors of our ability to return to profitable growth. At the Macy's nameplate, comps were down 0.4%, and net sales were down 3.3%, while go-forward business comps were flat to last year. Our first 50, which we view as the leading indicator of go-forward store growth, achieved a positive 3.4% comp. To size that business, these locations represented about 15% of the Macy's Inc. go-forward enterprise and close to 20% of Macy's nameplate go-forward sales last year.

Speaker Change: At the Macy's nameplate comps were down <unk>, 4% and net sales were down three 3%. While go forward business comps were flat to last year.

Speaker Change: Our first 50, which we view as the leading indicator of go forward store growth achieved a positive three 4% comp.

Speaker Change: Size that business. These locations represented about 15% of the Macy's Inc. Go forward enterprise and close to 20% up in Macys nameplate go forward sales last year.

Adrian V. Mitchell: The first 50 comp results compare to a negative 1.3% in the remaining GoForward locations which have not yet received growth investment, a positive 0.1% for all go-forward locations and a negative 4.5% for all non-go-forward locations. At our luxury nameplates, Bloomingdale's comms were up 0.3% and net sales were up 0.5%, and Blue Mercury comps were up 4.3%, and net sales rose 4%. Turning to the rest of the P&L, other revenues were $154 million, down 19.4% from the prior year. Net credit card revenues declined $45 million, or 27.8%, from the prior year to $117 million. Delinquency rates and net credit losses were both higher than last year, but in line with our expectations.

Speaker Change: The first 50 comp results compared to a negative one 3% in the remaining go forward locations, which have not yet received the growth investments.

Speaker Change: Positive <unk>, 1% for all go forward locations and a negative four 5% for all non go forward locations.

Speaker Change: At our luxury nameplates bloomingdale's comps were up 3% and net sales were up 5% and Blue Mercury comps were up four 3% and net sales rose 4%.

Speaker Change: Turning to the rest of the P&L other revenues were $154 million down 19, 4% from the prior year.

Speaker Change: Net credit card revenues declined $45 million or 27, 8% from the prior year to $117 million delinquency.

Speaker Change: See rates and net credit losses were both higher than last year, but in line with our expectations.

Adrian V. Mitchell: Macy's media network revenue rose 27.6% to $37 million as the team continued to increase vendor engagement. Gross Margin Rate declined 80 basis points to 39.2%, a steeper decline than our outlook, primarily reflecting additional discounting for slower-moving, warm-weather products.

Speaker Change: These media network revenue was 27, 6% to $37 million as the team continued to increase vendor engagement.

Gross margin rate declined 80 basis points to 39, 2% the decline was steeper than our outlook, primarily reflecting additional discounting for slower moving warm weather products.

Adrian V. Mitchell: We recognize that our customers are searching for newness at the right value, and we're responding appropriately to ensure we deliver on both. Discounting pressure was partially offset by better delivery expense, which improved 20 basis points as a percent of sale. End-of-quarter inventories were up 1.7% year over year. Entering the second quarter, we are delivering fresh goods and are well-positioned for the summer.

Speaker Change: We recognize that our customer is searching for newness at the right value and we're responding appropriately to ensure we deliver on both discounting pressure was partially offset by better delivery expense, which improved 20 basis points as a percent of sales.

Speaker Change: And of course, the inventories were up one 7% year over year entering the second quarter, we are delivering fresh goods and are well positioned for the summer season.

Adrian V. Mitchell: Next, SG&A expense was 1.9 billion dollars, down 2% from the prior year and better than our expectations, reflecting our continued cost disability. As a percent of total revenue, SG&A was 38.2%, 50 basis points higher than last year due to the decline in total revenue. Adjusted Diluted EPS was $0.27.

Speaker Change: Next SG&A expense was $1 $9 billion down 2% from the prior year and better than our expectations, reflecting our continued cost discipline.

Speaker Change: As a percent of total revenue SG&A was 38, 2% 50 basis points higher than last year due to the decline in total revenue.

Speaker Change: Adjusted diluted EPS was <unk> 27. This compares to our previously provided outlook of 10 cents to 16 and 56 cents in the prior year.

Adrian V. Mitchell: This compares to our previously provided outlook of $0.10 to $0.16 and $0.56 in the prior year. Turning to cash and capital allocation, for the quarter, cash generated from operating activities was $129 million, while capital expenditures totaled $229 million. Free cash flow with an outflow of $96 million, a year-over-year improvement of $70 million, and we paid $48 million in cash dividends. We will continue to deploy capital prudently to ensure financial flexibility and a healthy balance sheet that supports our longer-term growth aspirations. With that in mind, let's discuss how we are approaching the remainder of 2024.

Speaker Change: Turning to cash and capital allocation for the quarter cash generated from operating activities was $129 million, while capital expenditures totaled $229 million.

Speaker Change: Free cash flow was an outflow of $96 million a year over year improvement of $70 million.

Speaker Change: And we paid $48 million in cash dividends, we will continue to deploy capital prudently to ensure financial flexibility and a healthy balance sheet that supports our longer term growth aspirations.

Speaker Change: With that let's discuss how we are approaching the remainder of 2024.

Adrian V. Mitchell: We are raising our annual EPS outlook and narrowing our sales range to reflect a portion of our first quarter earnings. While we are encouraged by recent results and early traction on our bold new chapter strategy, we're also cognizant of the dynamic macro environment we are operating in. With continued pressure on the consumer and the majority of the year ahead, our second quarter and full year outlook provides flexibility to respond to the competitive landscape and the promotional environment.

Speaker Change: We are raising our annual EPS outlook and narrowing our sales range to reflect a portion of our first quarter earnings beat while we are encouraged by recent results and early traction of our boll New chapter strategy. We're also cognizant of the dynamic macro environment, we're operating in.

Speaker Change: With continued pressure on the consumer and the majority of the year ahead, our second quarter and full year outlook provides flexibility to respond to the competitive landscape and the promotional environment for.

Adrian V. Mitchell: For the year, we now expect Macy's Inc. comps, inclusive of non-go-forward locations and digital, to be down approximately 1% to up approximately 1.5%, with both Macy's nameplate go-forward locations and digital and our luxury nameplates to be roughly flat to up 2.5%, with net sales of approximately $22.3 to $22.9 billion. Total revenues of $23 to $23.6 billion. This includes other revenue of approximately $665 to $680 million. Credit card revenues of approximately $490 to $505 million, which is above our prior forecast due to better than expected profit share resulting from higher balances within the portfolio. We continue to exclude any potential impact from the late fee ruling.

Speaker Change: For the year, we now expect Macy's, Inc. Comps inclusive of non go forward locations and digital to be down approximately 1% to up approximately one 5% with both Macy's nameplate go forward locations in digital and our luxury nameplates to be roughly flat to up two five.

Speaker Change: 5%.

Net sales of approximately 22.3 to $22 $9 billion.

Speaker Change: Total revenues of 23 to $23 6 billion. This includes other revenue of approximately $665 million to $680 million.

Speaker Change: Credit card revenues of approximately $490 million to $505 million, which is above our prior forecast due to better than expected profit share, resulting from higher balances within the portfolio.

Speaker Change: We continue to exclude any potential impact for the late fee ruling.

Adrian V. Mitchell: We also expect gross margin as a percent of net sales to be 39 to 39.3 percent, benefiting from ongoing inventory controls, higher full-price sell-throughs, and private brand expansion partially offset by elevated discounting of warmer weather spring products and targeted promotions to address a value-conscious consumer. SG&A rate of 36.3 to 36.4 percent of total revenue as we continue to effectively manage expenses to properly support our new strategy and the associated areas of operations, and Full Year Adjusted EBITDA as a percent of total revenue of 8.7% to 9%. There is no change to our capital spend, asset sale proceeds, or asset sale gains assumptions for the year.

Speaker Change: We also expect gross margin rate as a percent of net sales to be 39 to 39, 3% benefiting from ongoing inventory controls higher full price sell throughs and private brand expansion, partially offset by elevated discounting of warmer weather spring product.

Speaker Change: And targeted promotions to address a value conscious consumer.

Speaker Change: SG&A rate of $36 three to 36, 4% of total revenue as we continued to effectively manage expenses to properly support our new strategy and the associated areas of opportunity.

Speaker Change: And full year adjusted EBITDA as a percent of total revenue up eight 7% to 9%.

Speaker Change: There is no change to our capital spend asset sale proceeds or asset sale gains assumptions for the year.

Adrian V. Mitchell: After interest and taxes, we expect just a diluted EPS of $2.55 to $2.90, which does not assume any share repurchase. For the second quarter, we expect net sales of $4.97 to $5.1 billion and total revenues of $5.1 to $5.25 billion, with other revenue at about $155 million. Credit card revenues are expected to be flat with last year's $120 million.

Speaker Change: After interest and taxes, we expect adjusted diluted EPS of $2 55 to $2.90, which does not assume any share repurchases.

Speaker Change: For the second quarter, we expect net sales of $4 97 to $5 $1 billion total revenues of $5, one to $5 billion to $5 billion with other revenue at about $155 million.

Speaker Change: Credit card revenues are expected to be flat with last year's $120 million.

Adrian V. Mitchell: As a reminder, 2023 results included the pro rata adjustment for the mid-year increase in our annual net credit loss outlook due to the normalizing credit environment. Gross margin rate is expected to be at least 170 basis points better than last year, reflecting the lapping of heightened clearance markdowns on excess seasonal goods, quarter-to-date discounting of the remaining spring assortments, and the planned liquidation of select men's private brands as part of our

Speaker Change: As a reminder, 2023 results included the pro rata adjustment for the mid year increase in our annual net credit loss outlook due to the normalizing credit environment.

Speaker Change: Gross margin rate to be at least 170 basis points better than last year, reflecting the lapping of heightened clearance markdowns on excess seasonal goods.

Speaker Change: To date discounting of the remaining spring Assortments and the planned liquidation of select men's private brands as part of our broader re imagination strategy.

Adrian V. Mitchell: Adjusted EPS of $0.25 to $0.33 and end-of-quarter inventories to be up low single digits compared to last year as we reinvest in private brands and conduct additional national brand tests in our first 50 and go-forward locations. To wrap up, we are encouraged by the momentum in our bold new chapter strategy and our future growth prospects. Despite ongoing macro pressures on our consumer, we remain committed to our previously stated fiscal 2025 financial targets and are excited to return Macy's Inc. to profitable growth. I'll now hand it back over to Tony.

Speaker Change: Adjusted EPS of 25 to 33 cents and end of quarter inventory to be up low single digits to last year as we reinvest in private brands and conduct additional national brand tests, and our first 50 and go forward locations.

Okay.

Speaker Change: To wrap up we are encouraged by the momentum in our bold new chapter strategy and our future growth prospects. Despite ongoing macro pressures on our consumer we remain committed to our previously stated fiscal 2025 financial targets and are excited to return Macy's, Inc to profitable growth I'll now.

I hand, it back over to Tony.

Antony Spring: Thank you Adrian a bold new chapter sets us firmly on a path to change our trajectory. Although early days, our investments are gaining traction and reinforce our belief that Macy's Inc. Can return to sustainable profitable growth accelerate free cash flow generation and unlock shareholder value.

Antony Spring: A bold new chapter sets us firmly on a path to change our trajectory. Although it are early days, our investments are gaining traction and reinforce our belief that Macy's Inc. can return to sustainable profitable growth, accelerate free cash flow generation, and unlock shareholder value.

Antony Spring: Our focus on serving the customer is unwavering. We are confident that we have the right team and strategy in place to achieve our goals and look forward to updating you on our progress. With that, Operator, we are ready for questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone. The confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from

Antony Spring: Our focus on serving the customer is unwavering.

Antony Spring: We are confident that we have the right team and strategy in place to achieve our goals and look forward to updating you on our progress with that operator, we are ready for questions.

Operator: We ask that you please limit yourself to one question and one follow-up. And once again, that's star number one to register a question at this time. Today's first question is coming from Matthew Boss of JPMorgan Chase. Please go ahead.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing.

Antony Spring: The Star Keys.

Antony Spring: We ask that you please limit yourself to one question and one follow up.

Speaker Change: Again, Thats Star one to register a question at this time today's first question is coming from Matthew Boss of Jpmorgan Chase. Please go ahead.

Matthew Robert Boss: Great Thanks, and congrats on the progress.

Antony Spring: Thank you Tony Tony could could you elaborate on the key initiatives, which you saw drive the 3% to 4% comp in the first 50 doors, maybe what youre seeing between traffic and AUR in these stores and how quickly could you scale. This playbook and then Adrian just maybe drive.

On second quarter gross margin expansion and any change in your back half merchandise margin expectation.

Antony Spring: Thanks, Matt. I appreciate the question. Look, we're excited by the early innings of FIRST50. It's a combination of the things that we have talked about in people, product, presentation, and experience. You know, people; it's having the right people in place at the right time. It sounds easy, but using technology and the data we have on traffic and conversion by day, by hour, making sure that we have people in the shoe department, people in the ready-to-wear fitting rooms, people in the big-ticket area, and fine jewelry.

Thanks, Matt appreciate the question.

Speaker Change: Look we're excited by the early innings of first 50, it's a combination of the things that we have talked about in people product presentation and experience you know people, it's having the right people in place at the right time, it sounds easy, but using technology and the data we have on <unk>.

Speaker Change: Again conversion by day by our making sure that we have people in the shoe department people in the ready to wear fitting rooms people in the big ticket area in fine jewelry, but the team is all over it and I think doing a great job and leaning into the opportunities to increase the quality of the experience in our stores. That's why we saw 500.

Speaker Change: The basis point improvement in net promoter scores in the first 50 stores.

Antony Spring: But the team is all over it, and I think they are doing a great job and leaning into the opportunities to increase the quality of the experience in our stores. That's why we saw a 500 basis point improvement in net promoter scores in the FIRST50 stores. It's the product, you know; the team feeling the obligation to meet the needs of the customer, whether that's the rollout of new brands like Donna Karan or the expansion of brands like French Connection and Free People, Karl Lagerfeld, and Hugo Boss.

Speaker Change: It's the product the team feeling the obligation to meet the needs of the customer and whether that's the rollout of new brands like Donna Karan or the expansion of brands like French connection at free people and Karl Lagerfeld and Hugo boss.

Antony Spring: We need more variety, we need less redundancy, we need more interest within the assortment, and I think that's making a difference in the customer's reception of the stores. The experience, you know, it's adding animation and events into the stores, and it's also making sure, from a presentation standpoint, we look crisp, we look compelling. That partnership with the brands to make sure that the impact is in each of the categories of business.

Speaker Change: We need more variety, we need less redundancy, we need more interest within the assortment and I think that's making a difference in the customers' reception to the stores. The experience you know, it's it's adding animation and events into the stores and it's also making sure from a presentation standpoint, we look crisp, we look compelling that's.

Speaker Change: The partnership with the brands to make sure that the impact is in each of the categories of business.

Antony Spring: And again, I would add that we're in the early innings, so we're going to study this. Capital is something that we care a lot about, capital allocation. We're going to be very discerning in terms of what we decide to do and where. But I feel good, and I think opportunities exist to expand this as the year progresses, as soon as we see another quarter or more of consistency amongst the stores and the overall results.

Speaker Change: And again I would add that you know we're in the early innings. So we're going to study this.

Speaker Change: Capital is something that we care a lot about capital allocation, we're going to be very discerning in terms of what we decide to do and where.

But I feel I feel good and I think opportunities exist to expand this as the year progresses as soon as we see another quarter or more consistency amongst the amongst the stores and in the overall results traffic is good.

Antony Spring: Traffic is good. The AUR is up about 4%. So conversion, I think, is reflective of the discerning customer who feels under pressure and is going to wait to buy the things that they love. So we accept the challenge, and we'll respond to it appropriately. Good morning, Matt, and thank you for your question.

Speaker Change: The AUR is up about 4%. So you know conversion I think is reflective of the discerning customer who feels are under pressure in the end is going to wait to buy the things that they love. So we we accept the challenge and we'll respond to it appropriately.

Adrian V. Mitchell: Good morning, Matt, and thank you for your question on gross margin. Let me set a little bit of context as we think about the second quarter gross margin because I think what we observed and how we navigated the first quarter are pretty important. As you look at our first quarter results, we're very pleased with how we navigated the first quarter, and as you saw, we delivered earnings that exceeded our outlook.

Speaker Change: Good morning, Matt and thank you for your question on gross margin, let me set a little bit of context, as we think about the second quarter gross margin because I think what we observed in how we navigated the first quarter is pretty important.

Speaker Change: As you look at our first quarter first.

Tony: First quarter results were very much pleased with how we navigated the first quarter and as you saw we delivered earnings that exceeded our outlook now the key thing as Tony pointed out is that we're very much focused on delivering on our customer on our customer experience, but we also recognize that the customers on the pressure the macro environment remains uncertain.

Adrian V. Mitchell: Now, the key thing, as Tony pointed out, is that we're very much focused on delivering on our customer experience, but we also recognize that the customer is under pressure, the macro environment remains uncertain, and that we can only control what we can control.

Tony: And that we can only control what we can control so as we navigated the first quarter, we're balancing a number of different variables given that context rebalancing sales growth delivering value for more value conscious customers as we thought about our markdowns and discounts ensuring healthy inventory turns and also managing our operating expenses.

Adrian V. Mitchell: So, as we navigated the first quarter, we're balancing a number of different variables given that context. We're balancing sales growth, delivering value for more value-conscious customers as we think about our markdowns and discounts, ensuring healthy inventory turns, and also managing our operating expenses, particularly our variable expenses, pretty effectively. But really, the headwind in the first quarter was really warm-weather products that just simply didn't move as fast as we had expected, but we had to respond to maintain the health of the inventory. If I pivot to the inventory, as you know, we have a proven track record of inventory discipline. This is something that we've really leaned into over the last several years.

Tony: Our variable expenses pretty effectively but really the headwind in the first quarter was really warm weather products that just simply didn't move as fast as we as expected, but we had to respond to maintain the health of the inventory.

Tony: If I pivot to the inventory as you know we have a proven track record on inventory discipline. This is something that we've really leading them to the last several years and what you saw in the first quarter or is that we took actions the actions needed to maintain the health of our inventory in terms of volume and composition, what I can tell you as it relates to your question about the second quarter is.

Adrian V. Mitchell: And what you saw in the first quarter is that we took the actions needed to maintain the health of our inventory in terms of volume and composition. What I can tell you as it relates to your question about the second quarter is that we're entering the second quarter with less aged inventory than last year and more transitional product relative to last year. So we feel that we're well positioned for the summer season as we enter the second quarter, but also well-positioned as we enter the balance of the year.

Tony: We're entering the second quarter with less aged inventory than last year and more transitional product relative to last year. So we feel that we're well positioned for the summer season, as we enter the second quarter.

Tony: But also well positioned as we enter the balance of the year and what we're trying to do here is provide ourselves the appropriate level of flexibility to respond to an environment. That's more competitive that's more promotional so that we can be able to navigate and adjust based on whatever it is on the horizon to your pointed question about the Q2 outlook in the back half of the year as well.

Adrian V. Mitchell: And what we're trying to do here is provide ourselves with the appropriate level of flexibility to respond to an environment that's more competitive, that's more promotional, so that we can be able to navigate and adjust based on whatever is on the horizon. To your pointed question about the Q2 outlook for the back half of the year, as we look at the gross margin outlook forecasted for the second quarter, we expect to be at least 170 basis points above last year.

Tony: You look at gross margin outlook forecasted for the second quarter, we expect to be at least 170 basis points above last year, we like that trajectory, especially as the weather gets warmer and we're well positioned on warm weather goods and as we think about the composition shifting to the fall season, it's all about inventory discipline and inventory control.

Adrian V. Mitchell: We like that trajectory, especially as the weather gets warmer and we're well-positioned on warm-weather goods. And as we think about the composition shifting to the fall season, it's all about inventory discipline and inventory control, watching that level as we enter the third quarter and the holiday season and making sure that we have the right composition.

Operator: Thank you. The next question is coming from Michael Binetti of Evercore ISI. Please go ahead.

Tony: Watching that level as we enter the third quarter and the holiday season, and making sure that we have the right composition.

Speaker Change: Great color best of luck.

Matt: Thank you thanks, Matt.

Speaker Change: Thank you. The next question is coming from Michael Binetti of Evercore ISI. Please go ahead.

Warren Chang: Hey, good morning. This is Warren Chang on behalf of Michael.

Speaker Change: Hey, Good morning. This is Warren Chang on for Michael I wanted to follow up on your comment that the vendor partners are engaging with the enhancements you're making this first 50 stores is that driving a lift in the vendor mix or allocations first of all you had plans and also curious if thats driving and any impact on the full price sell through on margins you're realizing in this first 50 stores.

Antony Spring: I wanted to follow up on your comment that the vendor partners are engaging with the enhancements you're making in these first 50 stores. Is that driving a lift in the vendor mix or allocations versus what you had planned? And also curious if that's driving any impact on the full price sell through or margins you're realizing in these first 50 stores?

Speaker Change: Thanks Warren for the question I think the vendors are feel a sense of a partnership and there is a natural obligation.

Antony Spring: Thanks Warren for the question. I think the vendors feel a sense of partnership, and there is a natural obligation that we have to each other. You know, we do well when the vendors do well; the vendors do well when we do well. And I think that we have seen a level of engagement relative to these first 50 stores. I think, as we talked about on the last call, we hate closing stores or even, you know, rationalizing the store base, but the vendors were very supportive of that idea, meaning they wanted to focus on our most productive assets, they wanted to invest with us, they wanted to offer us better assortments in those stores, and they saw higher full price sell through in those stores. And that's really all kind of coming to fruition.

Speaker Change: Obligation that we have to each other you know, we do well when the vendors do well the vendors do well when we do well and I think that we have seen a level of engagement relative. These first 50, I think as we talked about on the last call. We hate closing stores or even you know rationalizing the store base, but the vendors were.

Speaker Change: Very supportive of that idea you know, meaning they wanted to focus on our most productive assets. They wanted to invest with us they wanted to offer us a better assortment in those stores they see higher full price sell through in those stores and that's really all kind of coming to fruition again, it's early innings. So we're gonna be careful but.

Antony Spring: Again, it's early innings, so we're going to be careful, but we wouldn't do these weekly events if our vendors weren't partnering with us. We wouldn't be able to add the level of staffing if our vendors weren't partnering with us. We certainly wouldn't be able to offer the distinction and variety within our assortment if our vendors weren't partnering with us. And so, you know, I feel it's a story of two mutually dependent partners, and I think we said private brand was 15% last year. Maybe one day we'll get it back to closer to 20%, but ideally, we're going to lean into the partnerships where 80% of our business is to make sure that they feel that Macy's, Bloomingdale's, and Blue Mercury are the best places to do business.

Speaker Change: We wouldn't do these weekly events, if our vendors werent partnering with US we wouldn't be able to add the level of staffing of our vendors. We're in partnering with US we certainly wouldn't be able to offer the distinction of variety within our assortment if our vendors we're in partnering with us and so I you know I feel it's a it's a story of ER to ER.

Speaker Change: Really dependent partners I think we said private brand was 15% last year, maybe one day, we'll get it back to closer to 20%, but ideally we're going to lean into the partnerships, where 80% of our businesses to make sure that they feel Macy's bloomingdale's and Blue Mercury are the best places to do business.

Warren Chang: Thanks. That's really helpful.

Speaker Change: Thanks, that's really helpful and I wanted to ask a follow up on your credit card revenues. Once you came in a little bit better than you expected. You also raised the rest of the year slightly can you give us an update on how youre seeing credit losses and delinquencies trend over the last three months.

Adrian V. Mitchell: And I wanted to ask a follow-up on your credit card revenues. 1Q came in a little bit better than you expected. You also raised the rest of the year slightly. Can you give us an update on how you're seeing credit losses and delinquencies trend over the last three months? Yeah, I'll go ahead and take.

Adrian V. Mitchell: Yeah, I'll go ahead and take that one. You know, when we think about our credit card results in the first quarter, we're pretty pleased. And to your point, Warren, we did increase our annual outlook by about $15 million. The reality is that we saw higher balances in our portfolio. In terms of the delinquency metrics, and the payment metrics, they were very much in line with our expectations. But also, what contributed to our beat in the first quarter was also better-than-expected profit sharing with Citi as well.

Speaker Change: Yeah I'll go ahead and take that one when we think about our credit card results in the first quarter, we're pretty pleased and to your point Warren We did increase our annual outlook by about $15 million. The reality is that we saw higher balances in our portfolio in terms of the delinquency metrics the payment metrics. They are very much in line with our <unk>.

Speaker Change: Expectations, but also what contributed to our beat in the first quarter was also better than expected profit sharing with Citi as well.

Operator: Thanks, good luck. Thank you. Thank you. Thank you. The next question is coming from Ashley Helgans of Jeffrey's. Please go ahead.

Speaker Change: Thanks, Good luck.

Speaker Change: Thank you. Thank you.

Operator: Thank you. The next question is coming from Ashley Helgans of Jeffreys. Please go ahead.

Speaker Change: Thank you. The next question is coming from Ashley Hogan of Jefferies. Please go ahead.

Hey, good morning.

Ashley Elizabeth Helgans: 50 locations that were up 3.3% how much was ticket versus traffic and then maybe you could talk about the level of promotions that those stores versus the rest of the fleet.

Ashley Elizabeth Helgans: Sure, Ashley, you know, there was no difference in the level of promotion in those stores versus the rest of the fleet, so no change there. The difference was in traffic, a higher conversion rate, and a comparable increase in average unit retail.

Speaker Change: Sure Ashley.

Speaker Change: You know there there was no difference in the level of promotion in those stores versus the rest of the fleet. So no change there.

Speaker Change: The difference was in traffic.

Speaker Change: Your conversion rate and a comparable increase in average unit retail.

Antony Spring: The customers are responding, as we said, to the right recipe. And when I use the analogy of a recipe, because a recipe means you have to get all the ingredients right. Sometimes, in our business, the merchants want to do their part only if the stores do their part, and the stores only want to do their part if the digital team does their part. In First50, we're all doing our part, and we're getting credit for product improvement.

The customers are responding as we said to the right recipe and when I use the analogy of a recipe because a recipe means you have to get all the ingredients right sometimes in our business. The merchants want to do their part only if the stores do their part in the stores only when do their part of the digital team does their part and first 50, we're all doing our part.

Speaker Change: Art and we're getting credit for product improvement, we're getting credit for visual animation, we're getting credit for the experiences we're adding we're getting credit for the service experience. Those net promoter scores are a great indicator and we drill down to perception on availability of size and color, we drill down to the inspiration from visual.

Antony Spring: We're getting credit for visual animation. We're getting credit for the experiences we're adding. We're getting credit for the service experience. Those net promoter scores are a great indicator. And we drill down to perception on the availability of size and color. We drill down to inspiration from visual animation. We drill down to have the brands, styles, and products that I like. And we're seeing a meaningful increase across all of those metrics. And I think that's a good indicator.

Speaker Change: Animation, we drill down to have the brands and styles and products that I like we're seeing meaningful increase across all of those metrics and I think that's a good indicator early innings, but the team working together and improving the overall experience in our first 50 stores.

Antony Spring: Early innings, but the team is working together and improving the overall experience in our First50 stores. Tony, if I may just add, I just want to amplify Tony's point about this being early innings. On One Dimension, we're 90 days in, and we're

Adrian V. Mitchell: Tony, if I may just add, I just want to amplify Tony's point about this being the early innings. On One Dimension, we're 90 days in, and we're still practicing around things like selling and service. We're getting better every day on staffing, on moving the team around the store, but also, there are a number of changes that have not been implemented in these first 50 yet. So to amplify Tony's point, it's early innings, we're still experimenting, there are still more changes coming into the store based on what our customers expect of us, but overall, we're encouraged by the early wins. That's super helpful. And if I could just squeeze in one more,

Tony: Tony If I may just add I, just want to amplify Tony's point about this being early innings on one dimension, where 90 days in and we're still practicing around things like selling and service were getting better everyday on staffing on moving the team around around the store, but also there are a number of changes that have not been implemented in these first 50, yet so.

Tony: Amplify Tony's point, it's early innings, we're still experimenting theres still more changes coming into the store based on what our customers expect of us, but overall, we are encouraged by the by the early wins.

Adrian V. Mitchell: So what is the high end of your comp guide for the fiscal year assume in terms of the health of the consumer versus current levels? I said differently, the consumer needs to get better to hit that range. Yeah, you know, from our perspective, we've been pretty consistent that the pressure on the consumer is a given in terms of how we think about our business. So as we think about the range of our comp this year, it does not assume any improvement by the consumer.

Speaker Change: Okay, that's super helpful and if I could just squeeze in one more.

But at the high end of the.

Speaker Change: This fiscal year and in terms of the health of the consumer versus current levels.

Speaker Change: Said differently with the consumer need to get better to hit that range.

Yeah, you know from from our perspective, we've been pretty consistent that the pressure on the consumer is a given in terms of how we think about our business. So as we think about the range of our comp. This year. It does not assume any improvement in the consumer what it doesn't assume is improvement in how we're executing our business and how well we're serving the.

Adrian V. Mitchell: What it doesn't assume is improvement in how we're executing our business and how well we're serving the customer, given the growth investments that we're placing in our stores, in digital, and the acceleration of growth within our luxury nameplate. The range that you see is really reflective of the competitive environment and the continued pressure on the consumer. But from our perspective, we feel that what we can control is really what we're going to be focused on. But the consumer, we believe, will remain under pressure for the balance of the year.

Speaker Change: <unk>, given the growth investments that replacing in our stores and digital and the acceleration of growth within our luxury nameplate. The range that you see is really reflected a reflective of the competitive environment and the continued pressure on the consumer but from our perspective, we feel that we can control is really what we're going to be focused on but the <unk>.

Speaker Change: Sumer, we believe will remain under pressure for the balance of the year.

Operator: Great, that's helpful. I'll pass it off. Thank you. The next question is coming from...

Great that's helpful I'll pass it off.

Ashley Elizabeth Helgans: Thanks Ashley.

Operator: Thank you. The next question is coming from Paul Lejuez of Citi. Please go ahead. Thank you.

Thank you. The next question is coming from Paul Lajoie of Citi. Please go ahead.

Ashley Elizabeth Helgans: Thanks, It's Tracy Kogan filling in for Paul I had a question on SG&A. It came in below your expectations. This quarter and I was wondering what the drivers of that.

Ashley Elizabeth Helgans: That were and then what kind of expense initiatives you have after the remainder of the year. Thank you.

Tracy Kogan: Good morning, Tracy. So, to your point, we are pleased with how we're managing expenses ongoing. And, you know, from a cost-saving standpoint or an SG&A control standpoint, there are really two things that we focused on. The first is managing variable expenses well as we progress through the quarter, as well as really making sure that we're gaining traction on the structural cost-savings initiatives that we spoke about on the last call as it relates to end-to-end operations.

Speaker Change: Good morning Tracy.

Speaker Change: So to your point, we are pleased with how we're managing expense ongoing.

Speaker Change: And from a cost savings standpoint, or an SG&A control standpoint, there are really two things that would be focused on the first is managing variable expenses well as we progressed through the quarter as well as really making sure that we're gaining traction on the structural cost savings initiatives that we spoke about on the last call as it relates to end to end operations.

Tracy Kogan: The good news is that with regard to end-to-end operations, we're gaining traction. We're seeing the benefits flow through from the consolidation of our tech vendors on routine service contracts. We have fortunately transitioned through the offshoring of a large part of our finance team, and we're better balancing fulfillment activities. But, you know, we're still in the early innings of end-to-end, but it's nice to see the progress that we're making and the value that we've been able to deliver in the first quarter. But I would say, you know, to your question, Tracy, the combination of how we're managing variable expenses day-to-day and the traction gained on the longer-term transformation work we're doing on end-to-end operations.

Speaker Change: The good news is that with regards to end to end operations, we're gaining traction we're seeing the benefits flow through from the consolidation of our tech vendors on routine service contracts.

Speaker Change: We have fortunately transition through the offshoring of a large part of our fan finance team, we are better balancing fulfillment activities, but we're still in the early innings on end to end, but it's nice to see the progress that we're making and the value that we've been able to deliver in the first quarter, but I would say to your question Tracy the <unk>.

Speaker Change: Combination of how we're managing variable expenses day to day and the traction gained on the longer term transformation work, we're doing on end to end operations.

Speaker Change: Great. Thanks, guys.

Joseph: Thank you Joseph.

Adrian V. Mitchell: Great. Thanks, guys. Thank you. Thank you. The next question is coming from Dana Telsey of Telsey Advisory Group. Please go ahead. Hi, good morning, everyone.

Thank you. The next question is coming from Dana Telsey of Telsey Advisory Group. Please go ahead.

Operator: Thank you. The next question is coming from Dana Telsey of Telsey Advisory Group. Please go ahead.

Dana Lauren Telsey: Hi, good morning, everyone.

Dana Lauren Telsey: Both of you think about the health of the consumer and Kevin come through the first quarter with the unseasonable weather.

Speaker Change: The same getting better getting worse, what are you seeing and does it differ by inventory does it different by different by income levels and lastly can you expand on the small store format any tweaks or adjustments.

Speaker Change: Working with little be adjusted a tweak and how you're thinking about them. Thank you.

Operator: Thanks, Dana. You know, the health of the consumer, I never claim to be an economist. I would say, as we've described, under pressure, discerning, and very choiceful.

Speaker Change: Thanks Dana.

Speaker Change: You know the health of the consumer I never claim to be an economist I would say as we've described under pressure discerning very choice fall.

Speaker Change: There are certainly categories that are stronger than others. The great part of being a department store is that we can move inventory. We can move people, we can move our marketing and assets and homepage exposure.

Antony Spring: There are certainly categories that are stronger than others. The great part of being a department store is that we can move inventory. We can move people. We can move our marketing and assets, and homepage exposure. And the key thing is for us to just keep our ears to the grindstone on making sure that we understand where the business is happening and move our resources there appropriately. I think the teams, in general, are doing a very good job. You know, we are reordering. We are canceling.

Speaker Change: And the key thing is for us to just keep our ear to the grindstone, making sure that we understand where the business is happening and move our resources, they're appropriately I think the teams in general are doing a very good job. We are reordering, we are canceling and that's what you'd expect from a good merchant and planning organization that they are active in the market making.

Antony Spring: And that's what you'd expect from a good merchant and planning organization, that they are active in the market making decisions based on what they're seeing in the business. I expect the consumer to remain under pressure. We've got a big year in front of us. Maybe there'll be rate cuts. Maybe there'll be, you know, one more ending.

Speaker Change: <unk> based on what they're seeing in the business I expect the consumer to remain under pressure.

Speaker Change: Got a big year in front of us maybe there'll be rate cuts, maybe it'll be a you know a.

Antony Spring: But it's an uncertain environment, and I think our job is not to assume anything different about the things we don't control but to play our game with strength, to play our game with confidence, to play our game with agility. And I think the team is doing that.

Speaker Change: One war ending but it it's an uncertain environment and I think our job is not to assume anything different on the things, we don't control, but to play our game with strength to play a game with confidence to play our game with agility and and I think the team is doing that with regard to the different income levels. We're certainly seeing at the high end.

Antony Spring: With regard to the different income levels, we're certainly seeing at the high end, the Bloomingdale's consumer is interested in purchasing, but she's being very thoughtful in the category she's purchasing in. So I think we said that the luxury handbag and shoe business is much softer than it was, still up strong in 2019, but she's investing now in advanced contemporary. She's investing now in parts of the beauty business. She's investing now in aspects of the home. So there's just a difference, I think, as you look at the income tier. The customer at the lower tier has to make choices based on rent and family obligations.

Speaker Change: The bloomingdale's consumer is interested in purchasing but she is being very thoughtful in the category of she is purchasing and so I think we said that luxury handbag and shoe business is much softer than it was still up a strong 2019, but she's investing now in advance contemporary she's investing now and.

Speaker Change: Parts of the beauty business she's investing now in aspects of the home. So there's just the difference I think as you look at income tier the customer at the lower tier has to make choices based on on rent and family obligations. The customer at the higher tier is going to do it based on where she has interest or they have inter.

Antony Spring: The customer at the higher tier is going to do it based on where she has an interest or they have an interest and passion and something that we are doing, I think, that creates the motivation to buy. Would you like to comment, Adrian, on the small format? Yes.

Speaker Change: And passion.

Speaker Change: Something that we are doing I think that creates the motivation to buy.

Speaker Change: Do you want to comment Adrian on small format. Yes. Thank you Tony we continued to remain very encouraged by the rollout of our small format stores on the Macys side. We just opened up a new store in New Jersey, but we have 11 more openings to go we continue to be pleased with the small formats that we're seeing on the bloomingdale side, they continue to exceed our expectations.

Adrian V. Mitchell: Thank you, Tony. You know, we continue to be very encouraged by the rollout of our small format stores. On the Macy's side, we just opened a new store in New Jersey, but we have 11 more openings to go. We continue to be pleased with the small formats that we're seeing on the Bloomingdale's side. They continue to exceed our expectations. So we continue to believe that, you know, we expect to have one additional Blue Mercury – Blue Bloomingdale's this year. My apologies, Dana.

Speaker Change: So we continue to believe that we expect to have one additional blue blue Mercury that bloomingdale's. This theory my apologies Dana but look we're encouraged we're learning a ton we're seeing how the customers responding and we're going to continue to lean in.

Adrian V. Mitchell: But look, we're encouraged. We're learning a ton. We're seeing how the customer is responding, and we're going to continue to lean in.

Speaker Change: Thank you.

Operator: No problem, Danny. Thank you. The next question is coming from Chuck Grom of Gordon-Haskett. Please go ahead. Hey, good morning. Congratulations on your success.

Speaker Change: No problem. Thank you.

Speaker Change: Thank you. The next question is coming from Chuck Grom of Gordon Haskett. Please go ahead.

Operator: Thank you, and Chuck Grom of Gordon-Haskett, please go ahead. Hey, good morning. Congratulations on the success with the first 50. Curious how quickly you guys can roll these efforts out to more stores.

Charles P. Grom: Hey, good morning, Congrats on the success with the first 50 curious how quickly you guys can enroll these efforts out to more stores to help the total company comp I'm curious what categories in those stores are you seeing the greatest lift in those locations.

Charles P. Grom: Sure. Thanks, Chuck, for the question. I don't think it's a question of if we can.

Speaker Change: Sure. Thanks, Chuck for the question I don't think it's a question of if we can it's when we can all of these are capital light the decisions that we've made you really revolve around variable SG&A and so you know we're gonna roll them as soon as we see enough continued result.

Antony Spring: It's when we can. All of these are capital-lite decisions that we've made. They really revolve around variable SG&A.

Speaker Change: It's and and the good news is we're seeing them in the majority of the stores. So it's not a handful of stores. That's a really good sign we're seeing it in the merchandise content. That's a really good sign we're seeing it in multiple F. O. B's. That's also a really good time as I mentioned again, the net promoter score the customer's voting both with her wallet and her commentary.

Antony Spring: And so, you know, we're going to roll them out as soon as we see enough continued results. And the good news is we're seeing them in the majority of the stores, so it's not just a handful of stores. That's a really good sign. We're seeing it in the merchandise content. That's a really good sign. We're seeing it in multiple FOBs. That's also a really good sign

Speaker Change: Taking the time to give us a lot of feedback so I would say it's not a question of if we're gonna rollout. It's a question of when and that when is going to be we're not going to trip on our way to success as an organization. We are highly committed to delivering on our commitments to the street and our commitments to our colleagues. So I think that we will have green shoots and.

Antony Spring: As I mentioned, again, the Net Promoter Score, the customers voting both with their wallets and their commentary, taking the time to give us a lot of feedback. So I would say it's not a question of if we're going to roll out. It's a question of when, and that when is going to be – we're not going to trip on our way to success. As an organization, we are highly committed to delivering on our commitments on the streets and our commitments to our colleagues.

Speaker Change: This first and second quarter it will allow us to do some things later in the year and I hope we're in a position to talk to you about more stores in 2025.

Speaker Change: Okay, Great and then one for you Adrian just can you talk about the cadence of your comps throughout the quarter by month and any early reads on how may and the second quarter has started.

Antony Spring: So I think that we will have green shoots in this first and second quarter. It will allow us to do some things later in the year, and I hope we're in a position to talk to you about more stores in 2025.

Speaker Change: Yeah. Good question look we have not commented on the monthly cadence.

Adrian V. Mitchell: Yeah, good question. Look, we have not commented on the monthly cadence. You know, we're navigating the quarter. We've negotiated the quarter as best we could. We felt good about how we navigated the quarter, and that's certainly reflected in our performance. As we think about quarter-to-date results, we're just not going to comment on that either. We have a lot of the quarter ahead of us, Chuck. You know, we've got graduations, we've got Father's Day, we've got the Fourth of July. So I think it would be premature to, you know, think about the balance of the quarter based on just a couple of weeks into the quarter.

Speaker Change: <unk> in the quarter.

Speaker Change: The quarter as best we could we felt good about how we navigated the quarter and that's certainly reflected in our performance as we think about quarter to date results were just simply not going to comment on that either we have a lot of the quarter ahead of us Jack We've got graduations, we've got father's day, we've got fourth of July. So I think it would be premature to think about that.

Speaker Change: <unk> for the quarter based on just a couple of weeks into the quarter.

Operator: Okay, great. Thank you. Thanks, Chuck. Thanks, Chuck. Thank you. The next question is coming from Alex Straton of Morgan Stanley.

Okay, great. Thank you. Thanks.

Speaker Change: Thanks, Scott Thanks Chuck.

Operator: Thank you. The next question is coming from Alex Straton of Morgan's family. Please go ahead. Hi, this is Kaye Dowell Hunt on for...

Speaker Change: Thank you. The next question is coming from Alex Straightened of Morgan Stanley. Please go ahead.

Speaker Change: Hi, This is Kate on for Alex Straighten.

Kate: My question was on the CFPB credit card regulations can you give us an update on what your latest view is there and then maybe remind us of your mitigation efforts.

Speaker Change: As long as if you've had any success so far with those.

Pam Quintiliano: Sounds good. Thank you, Katie.

Speaker Change: Sounds good thank you Katie.

Adrian V. Mitchell: You know, our perspective is that it remains uncertain, and so what we plan to do is to disclose the impact of the late fees once it becomes certain. The size of the impact is uncertain; the timing is uncertain. So once the final ruling comes out, we'll be able to share more information at that time. We have not shared a lot of specifics with regard to mitigation strategies, but definitely know that we're exploring them with our partner, Citi.

Speaker Change: Our perspective is that it remains uncertain.

Speaker Change: And so what we plan to do is to disclose the impact of the late fees. Once it becomes certain the size of the impact is uncertain. The timing is uncertain. So once the final ruling comes out we'll be able to share more information at that time, we have not shared a lot of specifics with regards to mitigation strategies, but definitely.

Speaker Change: Know that we're exploring them with our partner city, we're exploring a variety of strategies. Some of those strategies are in development, but from our perspective, you know, we're really waiting and seeing what's going to what the final ruling will be and be able to proceed at that time.

Adrian V. Mitchell: We're exploring a variety of strategies. Some of those strategies are in development, but from our perspective, you know, we're really waiting and seeing what the final ruling will be and will be able to proceed at that time.

Speaker Change: Okay.

Speaker Change: Great. Thank you so much okay.

Operator: Thank you. The next question is coming from Oliver Chen of TD Cowen. Please go ahead.

Speaker Change: Thank you. The next question is coming from Oliver Chen of TD Cowen. Please go ahead.

Oliver Chen: Hi Tony and Adrian, I would love your thoughts on targeted promotions ahead and the discounting pressure that you're seeing. I know you've been making really good strides on pricing analytics. Also, as we think about apparel, there are great changes in the private label portfolio. What are your thoughts on apparel comping positive and timing for that to happen in relation to the newness that you're introducing? And finally, as we think about the marketplace model as well as digital advertising, you've made nice strides there. What should we know about modeling that and how material it'll be as you continue to make progress there as well?

Oliver Chen: Hi, Tony and Adrian would love your thoughts on targeted promotions ahead, and discounting pressure that youre seeing I know you've been making really good strides on pricing analytics.

Speaker Change: Also as we think about apparel, there's great changes in the private label portfolio. What are your thoughts on apparel comping positive and timing for that to happen in relation to the newness that you're introducing and finally as we think about marketplace model as well as digital advertising you've made nice strides there and what should we.

Speaker Change: No about modeling that and how material it will be as you continue to make progress there as well. Thank you.

Operator: Thank you. Thanks, Oliver. You got a have a

Antony Spring: Thanks, Oliver. You have got a number of questions in there. Let me take them one at a time.

Speaker Change: Thanks, Oliver you got a number of questions in there let me take them one at a time on promotion you know I feel good about the team's work and we're obviously looking at our discount rate on a on a daily basis versus last year and comp events and trying to again through our personalization engine.

Antony Spring: On promotion, you know, I feel good about the team's work, and we're obviously looking at our discount rate on a daily basis versus last year and comp events and trying to, again, through our personalization engine, apply the value where it's necessary to either incentivize the customer to buy or to move age to inventory. And, again, as Adrian talked about, we come into the second quarter in a healthier inventory position from an age standpoint, but it's a long game.

Speaker Change: Apply the value, where it's necessary to either incent, the customer to buy or to move aged inventory and again as Adrian talked about we come into the second quarter and a healthier inventory position from an age standpoint, but there is a long game and so we were playing it on on a daily basis to make sure that we're making the right dish.

Antony Spring: And so we're playing it on a daily basis to make sure that we're making the right decisions on promotion to attract but not overinvest in value. In terms of ready-to-wear growth, I tell you, this learn-from-each-other-without-becoming-one-another has great application.

Speaker Change: <unk> on on promotion to attract but not overinvest in value in terms of ready to wear growth I'd tell you. This learn from each other without becoming one another has great application when I look at the ready.

Antony Spring: When I look at the ready-to-wear business at Bloomingdale's, which is terrific right now, it gives me optimism that we are in the early stages of that opportunity at Macy's. We have to get through the remainder of the private brand disposition that we're up against. We have to roll out more of the newer brands to gain the level of materiality to our overall business. But the impact at Bloomingdale's is really good to see, and I think it will be helpful as it relates to the opportunity at Macy's.

Speaker Change: Ready to wear business, a bloomingdale's, which right now is is terrific and it gives me optimism that we are in the early stages of that opportunity at Macy's, we have to get through the remainder of the private brand disposition that we're up against we have to rollout a more.

Speaker Change: More of the newer brands to gain the level of materiality to our overall business, but the impact at Bloomingdale's is really good to see and I think it will be helpful. As it relates to the opportunity at Macy's in terms of marketplace. We had a great quarter and that was on top of a great year in 2010.

Antony Spring: In terms of the marketplace, we had a great quarter, and that was on top of a great year in 2023. I'm excited about the Baby Registry launch, which puts us in the Baby Registry, along with Reading Registry, launching over 150 brands with a start and getting a good reaction from the consumer. And I think, as Adrienne mentioned, MNM, our media network, is up more than 20 percent from last year. We're seeing good vendor engagement that goes beyond just the important beauty category where we had an immediate impact, and we're diversifying what we're doing in MNM to include search and other facets of the way in which we engage the consumer.

Speaker Change: Three I'm excited about the baby registry, a launch you know which puts us in the baby registry along with reading registry are launching over 150 brands with the start and getting good reaction from from the consumer and I think as Adrian mentioned M. M. N. Our media network is up more than 20% to last year.

Speaker Change: Here, we're seeing good vendor engagement that goes beyond just the the important our beauty category, where we had an immediate impact and we're diversifying what we're doing in M. M. N to include our search and other facets of our the way in which we engage the consumer so marketplace healthy M M.

Antony Spring: So the marketplace is healthy, MNM growing, promotion discerning and thoughtful and targeted, and ready-to-work growth happening at Bloomingdale's, and determined to see that result at Macy's as we progress. Thank you. Best regards. Thank you. The next question is coming from Brooke Roach of Goldman Sachs.

Speaker Change: Growing promotion, discerning and thoughtful and targeted and ready to wear growth happening at bloomingdale's and determined to see that result at Macy's as we progress.

Speaker Change: Thank you best regards.

Speaker Change: Thank you.

Operator: Thank you. The next question is coming from Brooke Roach of Goldman Sachs. Please go ahead. Good morning, and thank you for joining us.

Speaker Change: Thank you. The next question is coming from Brooke Roach of Goldman Sachs. Please go ahead.

Yeah.

Good morning, and thank you for taking our question I was hoping you could talk a little bit more about the trends that youre seeing in luxury and some of those luxury initiatives that could be.

Speaker Change: Rolled out to the Macy's network in aggregate.

Speaker Change: Especially in Blue Mercury as well thank you.

Operator: Thanks, Brooke. I appreciate the question. Yeah, I think that, again, this portfolio we call Macy's Inc. offers this benefit that we get to look at the business across different consumer income levels and different value spectrums. And the Macy's team and the Blue Mercury team and the Bloomingdale's team are talking, and they're sharing more than ever before. And again, it's not of any interest in one becoming the other, but I do believe it's an advantage for us as we try and understand where peaks and valleys happen in the business. In terms of luxury trends that are happening right now, obviously, a lot has been discussed about quiet luxury.

Brook: Thanks Brook appreciate the question Yeah, I think that's again this portfolio we call Macy's Inc. Offers this benefit that we get to look at the business across different consumer income levels and different value spectrum's and the Macy's team and the Blue Mercury team of the Bloomingdale's team.

Brook: Or are talking in there and they're sharing more than ever before and again I have no interest in one becoming the other but I do believe it's an advantage for us as we try and understand where it peaks and valleys happen in the business in terms of luxury trends that are happening right. Now obviously a lot has been discussed about quiet luxury so you're you're seeing.

Antony Spring: So you're seeing less logo, and that's certainly playing out in the Macy's business at a more accessible level. So we're leaning into opportunities on products and categories and brands with less logo right now. You know, our business is very cyclical. So the minute I say logos are out, it'll be six months or a year, and logos will be back in some meaningful way. We're all interested to see what Alessandro will do at Valentino, and certainly that won't be a quiet luxury.

Brook: [laughter] less logo and that's certainly playing out in the macys business at a more accessible level. So you know we're leaning into opportunities on products and categories and brands with with less logo right. Now you know our business is very cyclical. So the minute I say logos are out it'll be six months or a year and logos, we'll be back in in some.

Brook: Meaningful way.

Speaker Change: We're all interested to see what Alessandro will do at Valentino, and certainly that won't be quiet quiet luxury.

Antony Spring: In terms of Blue Mercury and the beauty category, I think what they've discovered is the appetite of the consumer for high-end skin care and regimens that the consumer has no price resistance to what will help them take care of themselves, help them look their best, help them to be able to retain their youth, and help them recognize that the difference in people's skin types is just not the same when you're 20 versus 40 versus 60. And I think the other thing is Blue Mercury benefited from looking at the penetration of fragrances and other categories at Macy's and Bloomingdale's and has done an outstanding job of growing the fragrance business in a short period of time.

Speaker Change: In terms of Blue Mercury in the beauty category, you know I think what they've discovered is the appetite of the consumer for high end skin care and regimens that the consumer has no price resistance to what will help them take care of themselves helped them look their best.

Speaker Change: Help them to be able to retain their youth help recognize the difference in peoples skin types. There's just not the same when your 'twenty versus 40 versus 60.

Speaker Change: And I think the other thing is blue Mercury benefited from looking at the penetration of fragrances and other categories that Macy's and Bloomingdales and has done an outstanding job at growing the fragrance business in a short period of time. So we're as we said on the call really bullish on the growth opportunities of Blue Mercury. We have 30 stores that will open over the next couple.

Antony Spring: So we're, as we said on the call, fairly bullish on the growth opportunities at Blue Mercury. We have 30 stores that we'll open over the next couple of years. We have 30 remodels. And that all begins in the second quarter.

Speaker Change: <unk> of years, we have 30, Remodels and that all begins in the second quarter. So.

Antony Spring: So opportunities for growth at Blue Mercury, learning between Bloomingdale's, Macy's, and Blue Mercury, and really trying to react and respond to where the consumer is interested and where she's stepping back. Thank you. Thank you. Thank you.

Speaker Change: Opportunities for growth with Blue Mercury learning between Bloomingdale's, Macy's and Bloomberg here and are really trying to react and respond to where the consumer is interested in where she is stepping back.

Speaker Change: Great. Thanks, so much I'll pass it on.

Operator: Thank you. The next question is coming from Bob Drbul of Guggenheim Partners. Please go ahead. Hi, good morning.

Speaker Change: Thank you. The next question is coming from Bob <unk> with Guggenheim Partners. Please go ahead.

Speaker Change: Hi, Good morning, I was just wondering if you could focus a little more on your asset monetization plans this quarter I'm sorry, this year and over the next few years, just sort of what you're seeing how you're approaching it.

Speaker Change: And just your visibility on especially in the plans for this year. Thanks.

Operator: Absolutely. You know, the punchline on asset monetization, Bob, is that we're seeing a lot of traction. We're certainly encouraged by the deal-making activity that we've been seeing. And our focus is very much on quality deals, finding the right buyers and offering, making sure that we're getting the right price. As you know, we have a very healthy balance sheet.

Speaker Change: Absolutely.

The punch line on asset monetization, Bob is that we're seeing a lot of traction.

Speaker Change: We're certainly encouraged by the deal making activity that we've been seeing and our focus is very much on quality deals finding the right buyers and offering making sure that we're getting the right price as you know we have a very healthy balance sheet. We also have an apparatus of strong real estate partners and developers that were working with.

Adrian V. Mitchell: We also have an apparatus of strong real estate partners and developers that we're working with to unlock value for our shareholders. But we're very encouraged by the traction that we've seen since we announced the closure of approximately 150 stores back in late February. The strategic importance is still quite critical to us, right? The sales proceeds that we are able to generate from a large portion of the stores that we will be closing and monetizing allow us to reinvest in the business.

Speaker Change: To unlock value for our shareholders, but we're very encouraged by the traction that we've seen since we announced the closure of approximately 150 stores back in late February the strategic importance.

Still quite critical to us right, which is the sales proceeds that we are able to generate from a large portion of the stores that we will be closing in monetizing allows us to reinvest in the business and you see the performance of the first 50 stores as well as return capital to shareholders, but I would tell you we.

Adrian V. Mitchell: And you see the performance of the first 50 stores, as well as return capital to shareholders. But I would tell you, you know, we certainly recognize that we're in an elevated interest rate environment. But I got to tell you, we're very encouraged by the pace of deal-making that we're seeing and very encouraged about how we think about, you know, the closures of these stores and the monetization impact that will have on our business over the next three years.

Speaker Change: Certainly recognize that we're in an elevated interest rate environment, but I got to tell you. We're very encouraged by the pace of deal, making that we're seeing and very encouraged about how we think about the closure of these stores and the monetization impact that'll have on our business over the next three years.

Speaker Change: Thank you very much.

Speaker Change: Okay.

Operator: Thank you. This brings us to the end of the question and answer session. I would like to turn the floor back over to Mr. Spring for closing comments.

Speaker Change: Thank you this brings us to the end of the question and answer session I would like to turn the floor back over to Mr. Spring for closing comments.

Antony Spring: Thank you, operator. We hope everyone has a great Memorial Day and summer. Spend some time with your friends and family. Hopefully, you'll get a good vacation in there. And we hope to see some of you or many of you at our amazing 4th of July fireworks. It should be spectacular this year. Have a good rest of the day, everybody.

Antony Spring: Thank you operator, we hope everyone has a great Memorial day and summer spend some time with your friends and family hopefully get a good vacation in there and we hope to see some of you or many of you at our amazing fourth of July fireworks should be spectacular this year.

Speaker Change: Have a good rest of the day everybody.

Operator: Ladies and gentlemen, this concludes today's event. You may disconnect your lines at this time and enjoy the rest of your day.

Speaker Change: Ladies and gentlemen, thank you for your participation. This concludes today's event you may disconnect. Your lines at this time and enjoy the rest of your day.

Speaker Change: Yeah.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: [music].