Q2 2025 Macy's Inc Earnings Call

We 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 VP of Investor Relations. Pamela you may now begin.

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

With me on the call today are Tony Spring, our chairman and CEO and Tom Edwards, our COO and CFO, along with our second quarter 2025 press release, a form 8-K has been filed with the Securities and Exchange Commission and the presentation has been posted on the investors section of our website Macy's, Inc. Dot com and its <unk>.

<unk> displayed lives during today's webcast.

Unless otherwise noted the comparisons we provide will be versus 'twenty 'twenty four all references to our prior expectations outlook or guidance refer to information provided on our May 28 earnings call.

Speaker #1: 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.

On today's call, we will refer to certain non-GAAP financial measures reconciliations of these measures can be found in our earnings presentation and <unk> SEC filings available at Www Dot Macy's, Inc. Dot com slash investors.

Speaker #1: I would now like to turn the call over to Pamela Quintiliano, VP of investor relations. Pamela, you may now begin.

Speaker #2: Thank you, operator. Good morning, everyone, and thanks for joining us. With me on the call today are Tony Spring, our chairman and CEO, and Tom Edwards, our COO and CFO.

Pamela Quintiliano: Thank you, Operator. Good morning, everyone, and thanks for joining us. With me on the call today are Tony Spring, our Chairman and CEO, and Tom Edwards, our COO and CFO. Along with our second quarter 2025 press release, a Form 8-K has been filed with the Securities and Exchange Commission, and a presentation has been posted on the Investor section of our website, macysinc.com, and is being displayed live during today's webcast. Unless otherwise noted, the comparisons we provide will be versus 2024. All references to our prior expectations, outlook, or guidance refer to information provided on our May 28 earnings call. On today's call, we will refer to certain non-GAAP financial measures. Reconciliations of these measures can be found in our earnings presentation and SEC filings available at www.macysinc.com/investors.

All references comp sales throughout todays prepared remarks represent comparable owned plus licensed plus marketplace sales and owned plus licensed sales for our store locations unless otherwise noted.

Speaker #2: Along with our second quarter 2025 press release, a Form AK has been filed with the Securities and Exchange Commission, and a presentation has been posted on the Investors section of our website, macysinc.com, and is being displayed live during today's webcast.

Go forward Macy's Inc. Comp sales include the approximately 350, Macy's go forward locations, and digital and Bloomingdale's and Blue Mercury nameplates inclusive of stores and digital.

Speaker #2: Unless otherwise noted, the comparisons we provide will be versus 2024. All references to our prior expectations, outlook, or guidance refer to information provided on our May 28th earnings call.

Go forward Macy's comp sales includes the approximately 350 Macy's go forward locations and Macys digital.

All forward looking statements are subject to the safe Harbor provisions of the private Securities Litigation Reform Act of 1095.

Speaker #2: On today's call, we will refer to certain non-GAAP AP financial measures. Reconciliations of these measures can be found in our earnings presentation and SEC filings available at www.macysinc.com/investors.

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 SEC.

Speaker #2: All references to comp sales throughout today's prepared remarks represent comparable owned plus licensed plus marketplace sales and owned plus licensed sales for our store locations unless otherwise noted.

Pamela Quintiliano: All references to comp sales throughout today's prepared remarks represent comparable owned plus licensed plus marketplace sales and owned plus licensed sales for our store locations, unless otherwise noted. GoForward Macy's Inc. comp sales include the approximately 350 Macy's GoForward locations and digital, and Bloomingdale's and Bluemercury nameplates inclusive of stores and digital. GoForward Macy's comp sales include the approximately 350 Macy's GoForward locations and Macy's digital. 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. A detailed discussion of these factors and uncertainties is contained in our filings with the SEC. Today's call is being webcast on our website. A replay will be available approximately two hours after the conclusion of this call.

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.

Speaker #2: GoForward Macy's Inc. comp sales include the approximately $350,000 Macy's GoForward locations and digital. And Bloomingdale's and Blue Mercury nameplates, inclusive of stores and digital.

Good morning, and thank you for joining us today.

We're encouraged by recent quarterly performance and the execution of our bold new chapter strategy, we've made substantive enterprise wide improvements to our business yielding meaningful results for the second quarter topline Bottomline and core adjusted EBITDA exceeded our guidance.

Speaker #2: GoForward Macy's comp sales, includes the approximately $350,000 Macy's GoForward locations and Macy's digital. All forward-looking statements are subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

ACS, Inc, and Macy's nameplate, both had their strongest comparable sales in 12 quarters.

Speaker #2: 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 SEC.

These go forward comparable sales were positive inclusive of growth and a re imagine 125 locations in digital.

Bloomingdale's achieved its fourth consecutive quarter of comparable sales growth and continued to gain market share.

Speaker #2: 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.

And Blue Mercury achieved its 18th consecutive quarter of comparable sales gains.

I want to thank our teams and our brand partners for helping us deliver improved product and omnichannel experiences for our customers.

Pamela Quintiliano: With that, I'll turn it over to Tony.

Speaker #3: Good Good morning. And thank you for joining us today. We're encouraged by recent quarterly performance and the execution of our bold new chapter strategy.

Tony Spring: Good morning, and thank you for joining us today. We're encouraged by recent quarterly performance and the execution of our bold new chapter strategy. We've made substantive enterprise-wide improvements to our business, yielding meaningful results. For the second quarter, top line, bottom line, and core adjusted EBITDA exceeded our guidance. Macy's Inc. and Macy's nameplate both had their strongest comparable sales in 12 quarters. Macy's GoForward comparable sales were positive, inclusive of growth in our Reimagined 125 locations and digital. Bloomingdale's achieved its fourth consecutive quarter of comparable sales growth and continued to gain market share. Bluemercury achieved its 18th consecutive quarter of comparable sales gains. I want to thank our teams and our brand partners for helping us deliver improved product and omnichannel experiences for our customers. Turning to a more detailed view of the quarter, Macy's Inc.

Turning to a more detailed view of the quarter.

Macy's, Inc achieved comparable sales growth of one 9% and our go forward businesses delivered comparable sales growth of two 2%.

Speaker #3: We've made substantive enterprise-wide improvements to our business, yielding meaningful results. For the second quarter, top line, bottom line, and core adjusted EBITDA exceeded our guidance.

Adjusted EPS of <unk> 41.

Was above our guidance range of 15% to 20.

Speaker #3: Macy's Inc. and Macy's nameplate, both had their strongest comparable sales in 12 quarters. Macy's GoForward comparable sales were positive, inclusive of growth and our reimagined 125 locations and digital.

Reflecting comparable sales growth disciplined expense controls and tariff mitigation actions.

End of quarter inventories were down 8% and we feel good about our composition headed into the fall season.

Speaker #3: Bloomingdale's achieved its fourth consecutive quarter of comparable sales growth and continued to gain market share. Blue Mercury achieved its 18th consecutive quarter of comparable sales gains.

Our second quarter results highlight the benefit of being a portfolio of nameplates that are multi brand multi category and multi channel.

This model provides sourcing optionality economies of scale and negotiations and product and price diversification.

Speaker #3: I want to thank our teams and our brand partners for helping us deliver improved product and omnichannel experiences for our customers. Turning to a more detailed view of the quarter, Macy's Inc. achieved comparable sales growth of 1.9%, and our GoForward businesses delivered comparable sales growth of 2.2%.

And with our off price to luxury offerings and strong financial position, we are leaning into areas of opportunity chasing important trends and providing more reasons for the customer to shop with us.

Tony Spring: achieved comparable sales growth of 1.9%, and our GoForward businesses delivered comparable sales growth of 2.2%. Adjusted EPS of $0.41 was above our guidance range of $0.15 to $0.20, reflecting comparable sales growth, disciplined expense controls, and tariff mitigation actions. End-of-quarter inventories were down 0.8%, and we feel good about our composition headed into the fall season. Our second quarter results highlight the benefit of being a portfolio of nameplates that are multi-brand, multi-category, and multi-channel. This model provides sourcing optionality, economies of scale and negotiations, and product and price diversification. With our off-price to luxury offerings and strong financial position, we're leaning into areas of opportunity, chasing important trends, and providing more reasons for the customer to shop with us. Now let's discuss how each pillar of the bold new chapter strategy contributed to our results, beginning with strengthening and reimagining Macy's.

Now, let's discuss how each pillar of the bold new chapter strategy contributed to our results beginning with strengthening and re imagining Macy's.

Speaker #3: Adjusted EPS of $0.41 was above our guidance range of $0.15 to $0.20, reflecting comparable sales growth, disciplined expense controls, and tariff mitigation actions. End of quarter inventories were down 0.8%, and we feel good about our composition headed into the fall season.

Our goal for Macy's is simple offer customers access to the brands and categories, they're looking for at a great value with a compelling omnichannel shopping experience.

Macy's achieved one 2% comparable sales growth in the quarter.

Speaker #3: Our second quarter results highlight the benefit of being a portfolio of nameplates that are multi-brand, multi-category, and multi-channel. This model provides sourcing optionality, economies of scale in negotiations, and product and price diversification.

This was led by go forward, Macy's, which rose one 5% inclusive of the <unk> 125 that were up one 4%.

Macy's off price concept backstage along with macys marketplace were both strong contributors.

Speaker #3: And with our off-price to luxury offerings and strong financial position, we're leaning into areas of opportunity, chasing important trends and providing more reasons for the customer to shop with us.

He is still white space in our Assortments and help us retain customers seeking more price and brand variety.

Recent results illustrate that improvements in our macys omnichannel customer experience are resonating we have shifted from being an operationally led to customer led organization and are calibrating, our assortments on both our brand and category basis.

Speaker #3: Now let's discuss how each pillar of the Bold New Chapter strategy contributed to our results, beginning with strengthening and reimagining Macy's. Our goal for Macy's is simple: offer customers access to the brands and categories they're looking for at a great value, with a compelling omnichannel shopping experience.

Tony Spring: Our goal for Macy's is simple: offer customers access to the brands and categories they're looking for at a great value with a compelling omnichannel shopping experience. Macy's achieved 1.2% comparable sales growth in the quarter. This was led by GoForward Macy's, which rose 1.5%, inclusive of the Reimagined 125 that were up 1.4%. Macy's off-price concept Backstage, along with Macy's Marketplace, were both strong contributors. These still whitespace in our assortments and help us retain customers seeking more price and brand variety. Recent results illustrate that improvements in our Macy's omnichannel customer experience are resonating. We have shifted from being an operationally led to customer-led organization and are calibrating our assortments on both a brand and category basis. Highlighting our progress, Macy's delivered its strongest second quarter net promoter score on record. We view this as an important measure of customer sentiment and a leading indicator of future sales.

Highlighting our progress Macy's delivered its strongest second quarter net promoter score on record. We view this as an important measure of customer sentiment and a leading indicator of future sales.

Speaker #3: Macy's achieved 1.2% comparable sales growth in the quarter. This was led by GoForward Macy's, which rose 1.5%, inclusive of the reimagined 125 that were up 1.4%.

I recently received a note from a customer who had just visited a store and they said shopping at Macy's was such a pleasant surprise the store was clean and organized and most importantly, the employees were joy to interact with the service has improved tremendously over what it was just a few years ago I will definitely recommend shopping there and I will return.

Speaker #3: Macy's off-price concept, Backstage, along with Macy's Marketplace, were both strong contributors. These still represent white space in our assortments and help us retain customers seeking more price and brand variety.

Turn to shop, there myself.

I read every customer note that I receive.

Speaker #3: Recent results illustrate that improvements in our Macy's omnichannel customer experience are resonating, we have shifted from being an operationally led to customer-led organization, and our calibrating our assortments on both a brand and category basis.

Listening to feedback is one of the most important ways, we can improve and grow our business.

In addition to improving the shopping experience. We've also made strides in product duration, our vendor relationships are strong and we are viewed as a valued partner that helps broaden their reach and deliver against customer needs our balance sheet large addressable market and loyal customer base our attractive differentiators.

Speaker #3: Highlighting our progress, Macy's delivered its strongest second quarter net promoter score on record. We view this as an important measure of customer sentiment and a leading indicator of future sales.

Speaker #3: I recently received a note from a customer who had just visited a store. And they said, "Shopping at Macy's was such a pleasant surprise.

Tony Spring: I recently received a note from a customer who had just visited a store, and they said shopping at Macy's was such a pleasant surprise. The store was clean and organized, and most importantly, the employees were joyed to interact with. The service has improved tremendously over what it was just a few years ago. I will definitely recommend shopping there, and I will return to shop there myself. I read every customer note that I receive. Listening to feedback is one of the most important ways we can improve and grow our business. In addition to improving the shopping experience, we've also made strides in product curation. Our vendor relationships are strong, and we are viewed as a valued partner that helps broaden their reach and deliver against customer needs.

And market brands are excited to work alongside our teams as one of their largest partners we receive compelling product from the brands our customers are asking for including coach Donna Karan Levi's and Ralph Lauren just to name a few.

Speaker #3: The store was clean and organized, and most importantly, the employees were joyful to interact with. The service has improved tremendously over what it was just a few years ago.

And as these brands thrive at Macys other brands are taking notice we've been attracting new partners, including Abercrombie kids, expanding our distribution of existing labels such as Sam Edelman Hugo boss, Good American and we're continuing to update our private brand assortment.

Speaker #3: I will definitely recommend shopping there, and I will return to shop there myself. I read every customer note that I receive. Listening to feedback is one of the most important ways we can improve and grow our business.

Turning to category performance comparable sales of women's contemporary and career as well as men's tailored clothing outperformed in addition, fine jewelry and watches textiles, and mattresses continued to experience strong demand.

Speaker #3: In addition to improving the shopping experience, we've also made strides in product curation. Our vendor relationships are strong, and we are viewed as a valued partner that helps broaden their reach and deliver against customer needs.

Speaker #3: Our balance sheet, large addressable market, and loyal customer base are attractive differentiators. Market brands are excited to work alongside our teams. As one of their largest partners, we receive compelling products from the brands our customers are asking for, including Coach, Donna Karan, Levi's, and Ralph Lauren, just to name a few.

Tony Spring: Our balance sheet, large addressable market, and loyal customer base are attractive differentiators, and market brands are excited to work alongside our teams. As one of their largest partners, we receive compelling product from the brands our customers are asking for, including Coach, Donna Karan, Levi's, and Ralph Lauren, just to name a few. As these brands thrive at Macy's, other brands are taking notice. We've been attracting new partners, including Abercrombie Kids, expanding our distribution of existing labels such as Sam Edelman, Hugo Boss, Good American, and we're continuing to update our private brand assortment. Turning to category performance, comparable sales of women's contemporary and career, as well as men's tailored clothing, outperformed. In addition, fine jewelry and watches, textiles, and mattresses continue to experience strong demand.

The success of these categories illustrates the breadth of product and price points that we offer and our ability to cater to customers evolving lifestyle needs.

Rounding out the conversation on Macy's our strategy of closing underperforming locations, while investing in areas of opportunities will create a more focused and profitable store base. I believe we are positioned to deliver long term growth in our macys go forward business inclusive of digital.

Speaker #3: And as these brands thrive at Macy's, other brands are taking notice. We've been attracting new partners, including Abercrombie Kids, expanding our distribution of existing labels such as Sam Edelman, Hugo Boss, and Good American, and we're continuing to update our private brand assortment.

This was driven by exceptional customer omnichannel experiences improved selling enhanced colleague development and inspired merchandising, including more variety with reduced redundancies.

Speaker #3: Turning to category performance, comparable sales of women's contemporary and career, as well as men's tailored clothing, outperformed. In addition, fine jewelry and watches, textiles, and mattresses continued to experience strong demand.

The second pillar of the bold new chapter strategy is accelerating and differentiating luxury in the second quarter, both bloomingdales and Blue Mercury maintained their positive comparable sales trend.

Speaker #3: The success of these categories illustrates the breadth of product and price points that we offer and our ability to cater to customers' evolving lifestyle needs.

Tony Spring: The success of these categories illustrates the breadth of product and price points that we offer and our ability to cater to customers' evolving lifestyle needs. Rounding out the conversation on Macy's, our strategy of closing underperforming locations while investing in areas of opportunities will create a more focused and profitable store base. I believe we are positioned to deliver long-term growth in our Macy's GoForward business, inclusive of digital. This is driven by exceptional customer omnichannel experiences, improved selling, enhanced colleague development, and inspired merchandising, including more variety with reduced redundancies. The second pillar of the Bold New Chapter strategy is accelerating and differentiating luxury. In the second quarter, both Bloomingdale's and Bluemercury maintained their positive comparable sales trend. Bloomingdale's achieved a positive 5.7% comp and its highest second quarter sales and net promoter score on record.

Bloomingdale's achieved a positive five 7% comp and its highest second quarter sales and net promoter score on record.

Our ambition is to be the leader in local markets that we serve and our recent performance underscores that bloomingdale's is gaining momentum our strong heritage of customer service and premium contemporary to luxury positioning is differentiated in the market.

Speaker #3: Rounding out the conversation on Macy's, our strategy of closing underperforming locations while investing in areas of opportunity will create a more focused and profitable store base.

Speaker #3: I believe we are positioned to deliver long-term growth in our Macy's GoForward business, inclusive of digital. This is driven by exceptional customer omnichannel experiences, improved selling, enhanced colleague development, and inspired merchandising, including more variety, which reduced redundancies.

And we are able to offer the best of current trends in an accessible and compelling environment that has broad multi generational appeal.

During the second quarter ready to wear fine jewelry fragrance and tabletop performances were a few standouts.

Bloomingdale's is also well known for its special and exclusive capsule collections and partnerships, which build brand heat and excitement and support increased visits to our stores and online.

Speaker #3: The second pillar of the Bold New Chapter strategy is accelerating and differentiating luxury. In the second quarter, both Bloomingdale's and Blue Mercury maintained their positive comparable sales trend.

This summer we had takeovers by contemporary brands mother installed and introduced our latest limited edition Aqua collaboration Aqua and Ava Philippi.

Speaker #3: Bloomingdale's achieved a positive 5.7% comp and its highest second-quarter sales and net promoter score on record. Our ambition is to be the leader in the local markets that we serve, and our recent performance underscores that Bloomingdale's is gaining momentum.

Tony Spring: Our ambition is to be the leader in local markets that we serve, and our recent performance underscores that Bloomingdale's is gaining momentum. Our strong heritage of customer service and premium contemporary to luxury positioning is differentiated in the market, and we are able to offer the best of current trends in an accessible and compelling environment that has broad multigenerational appeal. During the second quarter, ready-to-wear, fine jewelry, fragrance, and tabletop performances were a few standouts. Bloomingdale's is also well known for its special and exclusive capsule collections and partnerships, which fuel brand heat and excitement and support increased visits to our stores and online. This summer, we had takeovers by contemporary brands Mother and Staud and introduced our latest limited edition Aqua collaboration, Aqua and Ava Phillippe. This week, we're launching our fall campaign, which is called Just Imagine.

This week, we are launching our fall campaign, which is called just imagine the campaign celebrates creativity art and style and is supported by a robust lineup of activations impressive visuals, and new and exciting and exclusive product.

Speaker #3: Our strong heritage of customer service and premium contemporary to luxury positioning is differentiated in the market. And we are able to offer the best of current trends in an accessible and compelling environment that has broad multi-generational appeal.

Looking ahead, we remain focused on growing bloomingdale's through attracting new brands and partnerships expanding distribution.

Growing digital and increasing our national footprint through blooming small format stores and bloomingdale's outlet locations.

Speaker #3: During the second quarter, ready-to-wear, fine jewelry, fragrance, and tabletop performances were a few standouts. Bloomingdale's is also well-known for its special and exclusive capsule collections and partnerships.

These initiatives help us to take additional share across categories markets and brands as we capitalize on disruption in the marketplace.

Speaker #3: Which build brand heat and excitement and support increased visits to our stores and online. This summer, we had takeovers by contemporary brands Mother and Staud and introduced our latest limited edition Aqua Collaboration Aqua and Ava Philipe.

Our other luxury concept blue Mercury achieved one 2% comparable sales growth representing its 18th consecutive quarter of gains.

<unk> were driven by dermatological skin care and recent brand launches, including by radio Victoria, Beckham Beauty and Charlotte Tilbury.

Speaker #3: This week, we're launching our fall campaign, which is called Just Imagine. The campaign celebrates creativity, art, and style, and is supported by a robust lineup of activations, impressive visuals, and new and exciting and exclusive product.

Tony Spring: The campaign celebrates creativity, art, and style and is supported by a robust lineup of activations, impressive visuals, and new and exciting and exclusive products. Looking ahead, we remain focused on growing Bloomingdale's through attracting new brands and partnerships, expanding distribution, growing digital, and increasing our national footprint through Bloomingdale's small format stores and Bloomingdale's outlet locations. These initiatives help us to take additional share across categories, markets, and brands as we capitalize on disruption in the marketplace. Our other luxury concept, Bluemercury, achieved 1.2% comparable sales growth, representing its 18th consecutive quarter of gains. Results were driven by dermatological skincare and recent brand launches, including Byredo, Victoria Beckham Beauty, and Charlotte Tilbury. Our Bloomingdale's and Bluemercury customers are responding well to our aspirational to luxury positioning. We have proven growth strategies in place for both and are confident in the luxury category and its long-term potential.

Our bloomingdale's and blue Mercury customers, responding well to our aspirational to luxury positioning.

We have proven growth strategies in place for both and are confident in the luxury category and its long term potential.

Speaker #3: Looking ahead, we remain focused on growing Bloomingdale's through attracting new brands and partnerships, expanding distribution, growing digital, and increasing our national footprint through Blooming's small format stores and Bloomingdale's outlet locations.

The third pillar of our bold new chapter strategy of simplifying and modernizing end to end operations. We have an always on approach to profit improvement and are finding efficiencies through automation resource optimization and streamlining of processes.

Speaker #3: These initiatives help us take additional share across categories, markets, and brands as we capitalize on disruption in the marketplace. Our other luxury concept, Blue Mercury, achieved 1.2% comparable sales growth, representing its 18th consecutive quarter of gains.

Our end to end work gives us the ability to invest in our growth ambitions, while delivering an improved return for our shareholders.

Now, let's discuss our view on the consumer.

Our customer cross named places remained resilient through the first half of the year and quarter to date.

Speaker #3: Results were driven by dermatological skincare and recent brand launches, including by Rado, Victoria Beckham Beauty, and Charlotte Tilbury. Our Bloomingdale's and Blue Mercury customers are responding well to our aspirational to luxury positioning.

However, given the uncertainty regarding the impact of tariffs on demand. We believe it's prudent to continue to incorporate a more choice for consumer into our guidance for the remainder of the year.

Our third quarter and full year ranges assume we continue to reinvest most of the savings from closed stores and distribution centers and initiatives that support our long term growth aspirations.

Speaker #3: We have proven growth strategies in place for both and are confident in the luxury category and its long-term potential. The third pillar of our bold new chapter strategy is simplifying and modernizing end-to-end operations.

Tony Spring: The third pillar of our bold new chapter strategy is simplifying and modernizing end-to-end operations. We have an always-on approach to profit improvement and are finding efficiencies through automation, resource optimization, and the streamlining of processes. Our end-to-end work gives us the ability to invest in our growth ambitions while delivering an improved return for our shareholders. Now let's discuss our view on the consumer. Our customer across nameplates has remained resilient through the first half of the year and quarter to date. However, given the uncertainty regarding the impact of tariffs on demand, we believe it's prudent to continue to incorporate a more choiceful consumer into our guidance for the remainder of the year. Our third quarter and full-year ranges assume we continue to reinvest most of the savings from closed stores and distribution centers in initiatives that support our long-term growth aspirations.

In addition, reflecting the incremental tariffs that have been announced since our last earnings call full year guidance now incorporates a 40 to 60 basis point tariff impact to gross margin. This compares to our prior expectation of 20 to 40 basis points and equates to roughly 25% to 40 cents of EPS for SAR.

Speaker #3: We have an always-on approach to profit improvement and are finding efficiencies through automation, resource optimization, and the streamlining of processes. Our end-to-end work gives us the ability to invest in our growth ambitions while delivering an improved return for our shareholders.

Higher expectation of 10 to 25.

Speaker #3: Now let's discuss our view on the consumer. Our customer, across nameplates, has remained resilient through the first half of the year and quarter to date.

To conclude I like where Macy's Inc is positioned.

Our first half and third quarter to date performance is encouraging, especially in our go forward business inclusive of <unk> 125, Bloomingdale's and Blue Mercury, we've made meaningful positive changes to our product and to our omnichannel experiences across nameplates and our customer is responding.

Speaker #3: However, given the uncertainty regarding the impact of tariffs on demand, we believe it's prudent to continue to incorporate a more choice for consumer into our guidance for the remainder of the year.

Speaker #3: Our third quarter and full year ranges assume we continue to reinvest most of the savings from closed stores and distribution centers in initiatives that support our long-term growth aspirations.

At Macy's, we're testing, we're iterating, we're refining our initiatives to drive relevant assortments inspiring experiences and compelling value for our customers.

Speaker #3: In addition, reflecting the incremental tariffs that have been announced since our last earnings call, full-year guidance now incorporates a 40 to 60 basis point tariff impact on gross margin.

Tony Spring: In addition, reflecting the incremental tariffs that have been announced since our last earnings call, full-year guidance now incorporates a 40 to 60 basis point tariff impact to gross margin. This compares to our prior expectation of 20 to 40 basis points and equates to roughly $0.25 to $0.40 of EPS versus our prior expectation of $0.10 to $0.25. To conclude, I like where Macy's Inc. is positioned. Our first half and third quarter to date performance is encouraging, especially in our GoForward business, inclusive of Reimagined 125, Bloomingdale's, and Bluemercury. We've made meaningful positive changes to our product and to our omnichannel experiences across nameplates, and our customer is responding. At Macy's, we're testing, we're iterating, and we're refining our initiatives to drive relevant assortments, inspiring experiences, and compelling value for our customers.

At Bloomingdale's were continuing to drive profitable growth through our unique positioning our strong appeal to our customers and our partners and will continue to capitalize on the disruption in the marketplace.

Speaker #3: This compares to our prior expectation of 20 to 40 basis points and equates to roughly $0.25 to $0.40 of EPS versus our prior expectation of $0.10 to $0.25.

And it blew mercury, our curated assortments and agnostic selling are both strong differentiators.

This is all supported by the important work and end to end operations, where we've become increasingly nimble leveraging knowledge and relationships to improve responsiveness and create more productive operations.

Speaker #3: To conclude, I like where Macy's Inc. is positioned. Our first half and third quarter-to-date performance is encouraging, especially in our GoForward business, inclusive of reimagined 125 Bloomingdale's and Blue Mercury.

Now before turning the call over to our new CFO and CFO, Tom Edwards I'd like to take a moment to welcome him to the team.

Speaker #3: We've made meaningful positive changes to our product and to our omnichannel experiences across nameplates, and our customer is responding. At Macy's, we're testing, we're iterating, and we're refining our initiatives to drive relevant assortments, inspiring experiences, and compelling value for our customers.

Tom joins us following a successful career across a variety of publicly traded consumer discretionary companies.

While many of you know him from his time as COO and CFO of Capri.

Senior positions at Brinker, and Wyndham as well.

Speaker #3: At Bloomingdale's, we're continuing to drive profitable growth through our unique positioning, our strong appeal to our customers and our partners, and we'll continue to capitalize on the disruption in the marketplace.

Tony Spring: At Bloomingdale's, we're continuing to drive profitable growth through our unique positioning, our strong appeal to our customers and our partners, and we'll continue to capitalize on the disruption in the marketplace. At Bluemercury, our curated assortments and agnostic selling are both strong differentiators. This is all supported by the important work in end-to-end operations, where we've become increasingly nimble, leveraging knowledge and relationships to improve responsiveness and create more productive operations. Now, before turning the call over to our new COO and CFO, Tom Edwards, I'd like to take a moment to welcome him to the team. Tom joins us following a successful career across a variety of publicly traded consumer discretionary companies. While many of you know him from his time as COO and CFO at Capri, he has held senior positions at Brinker and Wyndham as well.

Tom's experiences and financial acumen uniquely complement the hospitality oriented work, we're doing to support the bold new chapter strategy, our focus on building and strengthening brand partnerships and our ability to deliver long term growth.

Speaker #3: And at Blue Mercury, our curated assortments and agnostic selling are both strong differentiators. This is all supported by the important work in end-to-end operations where we've become increasingly nimble leveraging knowledge and relationships to improve responsiveness and create more productive operations.

Tom Welcome.

Thanks, Tony I'm thrilled to be here and I believe we have a tremendous opportunity ahead of us as momentum builds across the bolt new chapter strategy.

My first weeks here have reinforced my conviction in our ability to return to profitable growth and create significant value for our shareholders in the years to come.

Speaker #3: Now, before turning the call over to our new COO and CFO, Tom Edwards, I'd like to take a moment to welcome him to the team.

The enterprise wide improvements we have made are resonating with our customers. The evidence of this is clear with our recent results, including our encouraging second quarter performance, which I'll now walk through.

Speaker #3: Tom joins us following a successful career across a variety of publicly traded consumer discretionary companies. While many of you know him from his time as COO and CFO at Capri, he has held senior positions at Brinker and Wyndham as well.

Macy's and comparable sales of one 9% were our strongest in 12 quarters benefiting from positive results at each of our nameplates <unk>.

Speaker #3: Tom's experiences and financial acumen uniquely complement the hospitality-oriented work we're doing to support the bold new chapter strategy. Our focus is on building and strengthening brand partnerships and our ability to deliver long-term growth.

Tony Spring: Tom's experiences and financial acumen uniquely complement the hospitality-oriented work we're doing to support the bold new chapter strategy, our focus on building and strengthening brand partnerships, and our ability to deliver long-term growth. Tom, welcome.

Adjusted EPS of <unk> 41 was above the high end of our guidance on better than expected sales gross margin and SG&A.

Speaker #3: Tom, welcome.

Looking at a detailed view of the second quarter.

Speaker #4: Thanks, Tony. I'm thrilled to be here, and I believe we have a tremendous opportunity ahead of us as momentum builds across the Bold New Chapter strategy.

Tom Edwards: Thanks, Tony. I'm thrilled to be here, and I believe we have a tremendous opportunity ahead of us as momentum builds across the bold new chapter strategy. My first weeks here have reinforced my conviction in our ability to return to profitable growth and create significant value for our shareholders in the years to come. The enterprise-wide improvements we have made are resonating with our customers. The evidence of this is clear with our recent results, including our encouraging second quarter performance, which I'll now walk through. Macy's Inc. comparable sales of 1.9% were our strongest in 12 quarters, benefiting from positive results at each of our nameplates. Adjusted EPS of $0.41 was above the high end of our guidance on better-than-expected sales, gross margin, and SG&A. Looking at a detailed view of the second quarter, Macy's Inc. net sales were $4.8 billion, down 2.5% to last year.

Macy's Inc. Net sales were $4 8 billion down two 5% to last year.

Roughly $170 million of the sales decline was attributable to the 64 non go forward stores that closed at the end of last year, excluding the impact of these stores sales grew 9%.

Speaker #4: My first weeks here have reinforced my conviction in our ability to return to profitable growth and create significant value for our shareholders in the years to come.

Speaker #4: The enterprise-wide improvements we have made are resonating with our customers. The evidence of this is clear with our recent results, including our encouraging second quarter performance, which I'll now walk through.

Macy's, Inc. Achieved comparable sales growth of one 9% led by go forward business comparable sales growth of two 2%.

By nameplate.

Speaker #4: Macy's Inc. comparable sales of 1.9% were our strongest in 12 quarters, benefiting from positive results at each of our nameplates. Adjusted EPS of $0.41 was above the high end of our guidance on better than expected sales, gross margin, and SG&A.

<unk> net sales were down three 8% Macy's comparable sales were up one 2% with go forward business comparable sales continuing to outperform rising one 5%.

<unk> 125 comparable sales rose one 4% with the first 50 and next 75 locations, both achieving positive comparable sales results.

Speaker #4: Looking at a detailed view of the second quarter, Macy's Inc. net sales were 4.8 billion, down 2.5% to last year. Roughly $170 million of the sales decline was attributable to the $64 non-GoForward stores that closed at the end of last year.

Customers responded well to elevated merchandise more effective staffing and localized events and we continue to see stronger re imagine 125 performance and traffic average order value and net promoter scores relative to the broader fleet.

Tom Edwards: Roughly $170 million of the sales decline was attributable to the 64 non-GoForward stores that closed at the end of last year. Excluding the impact of these stores, sales grew 0.9%. Macy's Inc. achieved comparable sales growth of 1.9%, led by GoForward business comparable sales growth of 2.2%. By nameplate, Macy's net sales were down 3.8%. Macy's comparable sales were up 1.2%, with GoForward business comparable sales continuing to outperform, rising 1.5%. Reimagined 125 comparable sales rose 1.4%, with the first 50 and next 75 locations both achieving positive comparable sales results. Customers responded well to elevated merchandise, more effective staffing, and localized events, and we continue to see stronger Reimagined 125 performance in traffic, average order value, and net promoter scores relative to the broader fleet. In luxury, Bloomingdale's net sales were up 4.6%, and comparable sales rose 5.7%.

Speaker #4: Excluding the impact of these stores, sales grew 0.9%. Macy's Inc. achieved comparable sales growth of 1.9%, led by GoForward business comparable sales growth of 2.2%.

In luxury Bloomingdale's net sales were up four 6% and comparable sales rose five 7% and Blue bar category net sales were up three 3% and comparable sales rose one 2%.

Speaker #4: By nameplate, Macy's net sales were down 3.8%, Macy's comparable sales were up 1.2%, with GoForward business comparable sales continuing to outperform, rising 1.5%. Reimagined 125 comparable sales rose 1.4%, with the first 50 and next 75 locations both achieving positive comparable sales results.

Turning to revenue total revenue was 5 billion other revenue, which is comprised of credit card and Macy's media network was $187 million net.

Net credit card revenue was $153 million or $28 million higher than the prior year credit card revenue was driven by our healthy credit portfolio and the prudent management of net credit card losses.

Speaker #4: Customers responded well to elevated merchandise, more effective staffing, and localized events. We continue to see stronger reimagined 125 performance in traffic, average order value, and net promoter scores relative to the broader fleet.

Macy's Media network revenue was $34 million flat to last year and in line with our internal expectations.

Gross margin was $1 9 billion or 39, 7% of net sales compared to 45% last year and was slightly better than our expectations.

Speaker #4: In luxury, Bloomingdale's net sales were up 4.6%, and comparable sales rose 5.7%. And Blue Mercury net sales were up 3.3%, and comparable sales rose 1.2%.

As discussed on our last earnings call. There were two unique factors impacting second quarter gross margin.

Tom Edwards: In Bluemercury, net sales were up 3.3%, and comparable sales rose 1.2%. Turning to revenue, total revenue was $5 billion. Other revenue, which is comprised of credit card and Macy's Media Network, was $187 million. Net credit card revenue was $153 million, or $28 million higher than the prior year. Credit card revenue was driven by our healthy credit portfolio and the prudent management of net credit card losses. Macy's Media Network revenue was $34 million, flat to last year and in line with our internal expectations. Gross margin was $1.9 billion, or 39.7% of net sales compared to 40.5% last year, and was slightly better than our expectations. As discussed on our last earnings call, there were two unique factors impacting second quarter gross margin.

First we took proactive markdowns on remaining early spring product to maintain healthy inventories and second the flow through of product brought under the 145% tariffs primarily impacted the most recent quarter.

Speaker #4: Turning to revenue, total revenue was $5 billion. Other revenue, which is comprised of credit card and Macy's Media Network, was $187 million. Net credit card revenue was $153 million, or $28 million higher than the prior year.

Inventory was $4 3 billion down 8% to last year, we are comfortable with our inventory composition for the fall season and have ample open to buy for the remainder of the year.

Speaker #4: Credit card revenue was driven by our healthy credit portfolio and the prudent management of net credit card losses. Macy's media network revenue was $34 million, flat to last year, and in line with our internal expectations.

SG&A expense of $1 9 billion declined $29 million from last year, reflecting the net impact of the benefit from our close macys locations and ongoing cost containment efforts, partially offset by investments in our go forward business, including the <unk> 125 locations and Blue.

Speaker #4: Gross margin was 1.9 billion, or $39.7% of net sales, compared to $40.5% last year. And was slightly better than our expectations. As discussed on our last earnings call, there were two unique factors impacting second quarter gross margin.

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As a percent of total revenue SG&A expense was 38, 9% compared to 38, 7% in the prior year.

Speaker #4: First, we took proactive markdowns on remaining early spring product to maintain healthy inventories. And second, the flow-through of product brought under the 145% tariffs primarily impacted the most recent quarter.

Tom Edwards: First, we took proactive markdowns on remaining early spring product to maintain healthy inventories, and second, the flow-through of product brought under the 14.5% tariffs primarily impacted the most recent quarter. Inventory was $4.3 billion, down 0.8% to last year. We are comfortable with our inventory composition for the fall season and have ample open to buy for the remainder of the year. SG&A expense of $1.9 billion declined $29 million from last year, reflecting the net impact of the benefit from our closed Macy's locations and ongoing cost containment efforts, partially offset by investments in our GoForward business, including the Reimagined 125 locations and Bloomingdale's. As a percent of total revenue, SG&A expense was 38.9% compared to 38.7% in the prior year. We are continuing to carefully manage our expenses and drive efficiencies throughout the organization. During the quarter, we recognized $16 million of asset sale gains.

We are continuing to carefully manage our expenses and drive efficiencies throughout the organization.

During the quarter, we recognized $16 million of asset sale gains.

Speaker #4: Inventory was $4.3 billion, down 0.8% compared to last year. We are comfortable with our inventory composition for the fall season and have ample open-to-buy for the remainder of the year.

Adjusted EBITDA was $393 million or seven 9% of total revenue.

For adjusted EBITDA, which is adjusted EBITDA, excluding asset sale gains was $377 million or seven 5% of total revenue above our guidance of six points year to six 2%.

Speaker #4: SG&A expense of $1.9 billion declined 29 million from last year. Reflecting the net impact of the benefit from our closed Macy's locations and ongoing cost containment efforts.

Second quarter adjusted EPS of <unk> 41 was also above our guidance of 15 to 20.

Speaker #4: Partially offset by investments in our GoForward business. Including the reimagined 125 locations and Bloomingdale's. As a percent of total revenue, SG&A expense was 38.9% compared to 38.7% in the prior year.

We continue to take a disciplined approach to our cash flow and balance sheet.

Year to date operating cash flow was $255 million versus $137 million last year and free cash flow was an outflow of $13 million versus an outflow of $244 million last year.

Speaker #4: We are continuing to carefully manage our expenses and drive efficiencies throughout the organization. During the quarter, we recognized $16 million of asset sale gains.

Capital expenditures were $343 million down from $432 million spent last year and monetization proceeds were $75 million compared to $51 million last year.

Speaker #4: Adjusted EBITDA was $393 million, or $7.9% of total revenue. Core adjusted EBITDA, which is adjusted EBITDA excluding asset sale gains, was $377 million, or $7.5% of total revenue, above our guidance of $6.0 to $6.2%.

Tom Edwards: Adjusted EBITDA was $393 million, or 7.9% of total revenue. Core adjusted EBITDA, which is adjusted EBITDA excluding asset sale gains, was $377 million, or 7.5% of total revenue, above our guidance of 6.0% to 6.2%. Second quarter adjusted EPS of $0.41 was also above our guidance of $0.15 to $0.20. We continue to take a disciplined approach to our cash flow and balance sheet. Year-to-date operating cash flow was $255 million versus $137 million last year, and free cash flow was an outflow of $13 million versus an outflow of $244 million last year. Capital expenditures were $343 million, down from $432 million spent last year, and monetization proceeds were $75 million compared to $51 million last year. We returned $251 million to shareholders through $100 million of consistent quarterly cash dividends and $151 million of share repurchases, including $50 million of buybacks in the second quarter.

We returned $251 million to shareholders through $100 million of consistent quarterly cash dividends and $151 million of share repurchases, including $50 million of buybacks in the second quarter.

Speaker #4: Second quarter adjusted EPS of $0.41 was also above our guidance of $0.15 to $0.20. We continue to take a disciplined approach to our cash flow and balance sheet.

This leaves approximately $1 2 billion remaining on our share buyback authorization.

And we ended the quarter with $829 million of cash on our balance sheet.

Speaker #4: Year to date operating cash flow was $255 million, versus $137 million last year. And free cash flow was an outflow of $13 million, versus an outflow of $244 million last year.

To further fortify our already strong balance sheet and provide additional flexibility. We recently completed a series of financing transactions to extend our debt maturities and modestly reduce leverage.

Speaker #4: Capital expenditures were $343 million, down from $432 million spent last year. And monetization proceeds were $75 million, compared to $51 million last year. We've returned $251 million to shareholders, through $100 million of consistent quarterly cash dividends, and $151 million of share repurchases.

This resulted in a net long term debt reduction of approximately $340 million.

With these transactions, we extended our material long term debt maturities by three years and do not have any meaningful maturities due until 2030.

Now I'd like to turn to our view of the consumer in guidance. The consumer has been resilient. We are pleased with second quarter results and momentum has continued third quarter to date.

Speaker #4: Including $50 million in buybacks in the second quarter, this leaves approximately $1.2 billion remaining on our share buyback authorization. We ended the quarter with $829 million in cash on our balance sheet.

Tom Edwards: This leaves approximately $1.2 billion remaining on our share buyback authorization, and we ended the quarter with $829 million of cash on our balance sheet. To further fortify our already strong balance sheet and provide additional flexibility, we recently completed a series of financing transactions to extend our debt maturities and modestly reduce leverage. This resulted in a net long-term debt reduction of approximately $340 million. With these transactions, we extended our material long-term debt maturities by three years and do not have any meaningful maturities due until 2030. Now I'd like to turn to our view of the consumer and guidance. The consumer has been resilient. We are pleased with second quarter results, and momentum has continued third quarter to date. However, the macro environment remains fluid. As such, we believe it is prudent to maintain our cautious view on the consumer for the remainder of the year.

However, the macro environment remains fluid.

As such we believe it is prudent to maintain our cautious view on the consumer for the remainder of the year.

Speaker #4: To further fortify our already strong balance sheet and provide additional flexibility, we recently completed a series of financing transactions to extend our debt maturities and modestly reduce leverage.

As a result, our third quarter and full year guidance assumes that current tariff rates remain in place.

<unk> provides flexibility to respond to consumer demand and the competitive landscape.

Speaker #4: This resulted in a net long-term debt reduction of approximately $340 million. With these transactions, we extended our material long-term debt maturities by three years, and do not at any meaningful maturities due until 2030.

Guidance also assumes that bold new chapter initiatives continue to gain traction and we reinvest most of the savings from closed stores and distribution centers to support our long term growth.

For the fiscal year, we have raised and narrowed our net sales and adjusted EPS guidance ranges. Our revised forecast assumes net sales of approximately 21, 5% to 21 45 billion as a reminder, fiscal 2024 store closures contributed roughly <unk> <unk>.

Speaker #4: Now I'd like to turn to our view of the consumer and guidance. The consumer has been resilient. We are pleased with second quarter results, and momentum has continued into the third quarter to date.

Speaker #4: However, the macro environment remains fluid. As such, we believe it is prudent to maintain our cautious view on the consumer for the remainder of the year.

700 million to net sales.

Comparable sales to be down approximately one 5% to down 5% with Macy's Inc. Go forward comparable sales to be down roughly one 5% to flat.

Speaker #4: As a result, our third quarter and full-year guidance assumes that current tariff rates remain in place and provides flexibility to respond to consumer demand and the competitive landscape.

Tom Edwards: As a result, our third quarter and full-year guidance assumes that current tariff rates remain in place and provides flexibility to respond to consumer demand and the competitive landscape. Guidance also assumes that bold new chapter initiatives continue to gain traction and reinvest most of the savings from closed stores and distribution centers to support our long-term growth. For the fiscal year, we have raised and narrowed our net sales and adjusted EPS guidance ranges. Our revised forecast assumes net sales of approximately $21.15 to $21.45 billion. As a reminder, fiscal 2024 store closures contributed roughly $700 million to net sales. Comparable sales to be down approximately 1.5% to down 0.5%, with Macy's Inc. GoForward comparable sales to be down roughly 1.5% to flat.

Other revenue of $840 to $850 million with an anticipated year over year improvement in both credit card revenues, which are expected to be $635 million to $645 million.

Speaker #4: Guidance also assumes that bold new chapter initiatives continue to gain traction, and reinvest most of the savings from closed stores and distribution centers to support our long-term growth.

<unk> Macy's media network, which is expected to be approximately $205 million.

Speaker #4: For the fiscal year, we have raised and narrowed our net sales and adjusted EPS guidance ranges. Our revised forecast assumes net sales of approximately $21.15 to $21.45 billion, as a reminder, fiscal 2024 store closures contributed roughly $700 million to net sales.

Gross margin as a percent of net sales to be roughly 60% to 100 basis points below the prior year.

Assuming current tariffs remain in place we estimate a combined tariff impact to gross margin of roughly 40 to 60 basis points versus our prior expectation of 20 to 40 basis points.

This equates to a roughly 25 to 40 <unk> impact to EPS compared to our prior expectation for a 10 to 25 impact.

Speaker #4: Comparable sales to be down approximately $1.5 to down 0.5%, with Macy's Inc. GoForward comparable sales to be down roughly $1.5% to flat. Other revenue of $840 to $850 million, with an anticipated year-over-year improvement in both credit card revenues which are expected to be $635 to $645 million, and Macy's media network, which is expected to be approximately $205 million.

Given the anticipated timing of receipts, we expect the additional impact to our gross margin rate and EPS, two primarily flow through the fourth quarter.

Tom Edwards: Other revenue of $840 to $850 million, with an anticipated year-over-year improvement in both credit card revenues, which are expected to be $635 to $645 million, and Macy's Media Network, which is expected to be approximately $205 million. Gross margin as a percent of net sales to be roughly 60 to 100 basis points below the prior year. Assuming current tariffs remain in place, we estimate a combined tariff impact to gross margin of roughly 40 to 60 basis points versus our prior expectation of 20 to 40 basis points. This equates to a roughly $0.25 to $0.40 impact to EPS compared to our prior expectation for a $0.10 to $0.25 impact. Given the anticipated timing of receipts, we expect the additional impact to our gross margin rate and EPS to primarily flow through the fourth quarter.

Our teams are working diligently to offset tariffs through mitigation actions that include shared cost negotiations vendor discounts and strategically raising tickets.

SG&A to be down low single digits on a dollar basis to last year in line with our prior guidance or up 60 to 80 basis points as a percent of total revenue.

Speaker #4: Gross margin as a percent of net sales to be roughly $60 to $100 basis points below the prior year. Assuming current tariffs remain in place, we estimate a combined tariff impact to gross margin of roughly $40 to $60 basis points, versus our prior expectation of $20 to $40 basis points.

With third quarter, SG&A dollars down low single digits and fourth quarter dollars down low to mid single digits.

Adjusted EBITDA as a percent of total revenue of seven 4% to seven 9% and core adjusted EBITDA of seven <unk> to seven 5%.

Speaker #4: This equates to a roughly 25 to 40 cent impact to EPS compared to our prior expectation for a 10 to 25 cent impact. Given the anticipated timing of receipts, we expect the additional impact to our gross margin rate and EPS to primarily flow through the fourth quarter.

Interest expense of roughly $100 million, reflecting our recent financing transactions and finally, we expect adjusted EPS of $1 70 to $2 <unk>.

Speaker #4: Our teams are working diligently to offset tariffs through mitigation actions that include shared cost negotiations, vendor discounts, and strategically raising ticket prices. SG&A is expected to be down low single digits on a dollar basis compared to last year.

Tom Edwards: Our teams are working diligently to offset tariffs through mitigation actions that include shared cost negotiations, vendor discounts, and strategically raising tickets. SG&A to be down low single digits on a dollar basis to last year, in line with our prior guidance, or up 60 to 80 basis points as a percent of total revenue, with third quarter SG&A dollars down low single digits and fourth quarter dollars down low to mid-single digits. Adjusted EBITDA as a percent of total revenue of 7.4% to 7.9% and core adjusted EBITDA of 7.0% to 7.5%. Interest expense of roughly $100 million, reflecting our recent financing transactions. Finally, we expect adjusted EPS of $1.70 to $2.05, which does not include potential future share buybacks. For the third quarter, we expect net sales of approximately $4.5 to $4.6 billion.

Which does not include potential future share buybacks.

For the third quarter, we expect net sales of approximately $4 five to $4 6 billion.

As a reminder, last year's store closures contributed about $160 million of sales in the comparable period.

Speaker #4: In line with our prior guidance, we're up 60 to 80 basis points as a percent of total revenue. With third-quarter SG&A dollars down low single digits, and fourth-quarter dollars down low to mid single digits.

Comparable sales of down approximately one 5% to up <unk>, 5%.

Core adjusted EBITDA as a percent of total revenue of three three to three 7%.

Speaker #4: Adjusted EBITDA as a percent of total revenue of $7.4 to $7.9%, and core adjusted EBITDA of $7.0 to $7.5%. Interest expense of roughly $100 million reflecting our recent financing transactions, and finally, we expect adjusted EPS of $1.70 to $2.05 cents, which does not include potential future share buybacks.

And adjusted EPS of a loss of 20 <unk> to a loss of 15 <unk>.

Including asset sale gains of roughly $20 million.

To sum up we are pleased with the recent results, which are a reflection of the bold new chapter strategy, we are well positioned to thoughtfully navigate the near term and deliver our long term goals.

Looking ahead, we will remain focused on the fundamentals and initiatives that provide meaningful value to our customers and to our shareholders supported by a healthy balance sheet, which we have further strengthened ample liquidity profile disciplined approach to inventory management and prudent capital allocation strategy.

Speaker #4: For the third quarter, we expect net sales of approximately $4.5 to $4.6 billion. As a reminder, last year's store closures contributed about $160 million to sales in the comparable period.

Tom Edwards: As a reminder, last year's store closures contributed about $160 million to sales in the comparable period. Comparable sales of down approximately 1.5% to up 0.5%. Core adjusted EBITDA as a percent of total revenue of 3.3% to 3.7% and adjusted EPS of a loss of $0.20 to a loss of $0.15, including asset sale gains of roughly $20 million. To sum up, we are pleased with the recent results, which are a reflection of the bold new chapter strategy. We are well positioned to thoughtfully navigate the near term and deliver our long-term goals. Looking ahead, we will remain focused on the fundamentals and initiatives that provide meaningful value to our customers and to our shareholders, supported by our healthy balance sheet, which we have further strengthened, ample liquidity profile, disciplined approach to inventory management, and prudent capital allocation strategy.

Speaker #4: Comparable sales of down approximately $1.5% to up $0.5%. Core adjusted EBITDA as a percent of total revenue of $3.3 to $3.7%, and adjusted EPS of a loss of $0.20 to a loss of $0.15 cents, including asset sale gains of roughly $20 million.

Now I would like to turn the call back over to Tony.

Thank you Tom and closing we're encouraged by our second quarter results initiatives are resonating as we deliver an improved product and omnichannel experience looking to the back half, we're well positioned for the fall and holiday seasons, our multi brand multi category and multi nameplate model gives us the flexibility to.

Speaker #4: To sum up, we are pleased with recent results. Which are a reflection of the bold new chapter strategy. We are well positioned to thoughtfully navigate the near term and deliver our long-term goals.

Respond to consumer demand in all environments and longer term, we remain confident that the bold new chapter strategy will deliver sustainable profitable growth and increase shareholder value with that operator, we're now ready for questions.

Speaker #4: Looking ahead, we will remain focused on the fundamentals and initiatives that provide meaningful value to our customers and to our shareholders. Supported by our healthy balance sheet, which we are further strengthened, ample liquidity profile, disciplined approach to inventory management, and prudent capital allocation strategy.

Thank you the floor, we will now be open for questions. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that 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 the handset before pressing the star.

Speaker #4: Now I would like to turn the call back over to Tony.

Tom Edwards: Now, I would like to turn the call back over to Tony.

Speaker #3: Thank you, Tom. In closing, we're encouraged by our second quarter results, initiatives are resonating as we deliver an improved product and omnichannel experience. Looking to the back half, we're well positioned for the fall and holiday seasons.

Tony Spring: Thank you, Tom. In closing, we're encouraged by our second quarter results. Initiatives are resonating as we deliver an improved product and omnichannel experience. Looking to the back half, we're well positioned for the fall and holiday seasons. Our multi-brand, multi-category, and multi-channel model gives us the flexibility to respond to consumer demand in all environments. Longer term, we remain confident that the bold new chapter strategy will deliver sustainable, profitable growth and increase shareholder value. With that, Operator, we're now ready for questions.

We ask that you please limit yourself to one question and one follow up again Thats Star One to register a question.

Today's first question is coming from Matthew boss of Jpmorgan. Please go ahead.

Speaker #3: Our multi-brand, multi-category, and multi-nameplate model gives us the flexibility to respond to consumer demand in all environments. And longer term, we remain confident that the bold new chapter strategy will deliver sustainable, profitable growth and increase shareholder value.

Great Thanks, and congrats on a nice quarter.

Yeah.

So Tony could you maybe help rank rank order drivers of the sequential improvement that you saw in same store sales and the progression that you saw during the quarter and any change in momentum so far in the third quarter, maybe just any perspective on the forecasted moderation that you felt into comps.

Speaker #3: With that, operator, we're now ready for questions.

Speaker #1: Thank you. The floor will now be open for questions. If you would like to ask a question, please press star one on your telephone keypad.

Operator: Thank you. The floor will now be open for questions. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. We ask that you please limit yourself to one question and one follow-up. Again, that's star one to register a question. Today's first question is coming from Matt Boss of JPMorgan Chase. Please go ahead.

Sure. Thanks, Matt appreciate it.

Speaker #1: A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue.

Had a strong quarter.

Across the board the first growth at Macy's, Inc, and Macy's brand in 12 quarters and it was across many different categories of the business, which is why we're so I think invigorated by seeing growth in womens apparel mens kids home furnishings parts of center core.

Speaker #1: For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. We ask that you please limit yourself to one question and one follow-up.

Speaker #1: Again, that's star one to register a question. Today's first question is coming from Matthew Boss of JP Morgan. Please go ahead.

And as you note the second quarter was strong with July the strongest month of the quarter and that carries into the beginning of the third quarter, which we obviously identified that's driven by a healthy start to back to school and I think an early read on some of the outerwear and cold weather categories, which you can't bank on what.

Speaker #5: Great, thanks, and congrats on a nice quarter. So, Tony, could you maybe help rank, in rank order, the drivers of the sequential improvement that you saw in same-store sales and the progression that you saw during the quarter?

Matt Boss: Great, thanks, and congrats on a nice quarter. Tony, could you maybe help rank order drivers of the sequential improvement that you saw in same-store sales and the progression that you saw during the quarter? Any change in momentum so far in the third quarter? Maybe just any perspective on the forecasted moderation that you've built into comps?

Speaker #5: And any change in momentum so far in the third quarter, maybe just any perspective on the forecasted moderation that you've built into comps?

August represents but it is nonetheless, a good start gives us I think.

Cautious optimism, meaning that we're celebrating in the second quarter good start to the third quarter, but we're being prudent in our guidance for the third quarter and the remainder of the year, because we want to see how the tariff environment plays out in totality.

Speaker #3: Sure. Thanks, Matt. I appreciate it. We had a strong quarter, you know, across the board. This is the first growth for Macy's Inc. and the Macy's brand in 12 quarters.

Tom Edwards: Sure, thanks, Matt. Appreciate it. We had a strong quarter across the board. The first growth at Macy's Inc. and Macy's brand in 12 quarters. It was across many different categories of business, which is why we're so, I think, invigorated by seeing growth in women's apparel, men's, kids, home furnishings, parts of center core. As you note, the second quarter was strong with July, the strongest month of the quarter, and that carries into the beginning of the third quarter, which we obviously identified. That's driven by a healthy start to back to school, and I think an early read on some of the outerwear and colder weather categories, which, you know, you can't bank on what August represents, but it's nonetheless a good start.

Speaker #3: And it was, across many different categories of business, which is why we're so I think invigorated by seeing growth in women's apparel, men's, kids, home furnishings, parts of center core.

That's great color best of luck.

Matt.

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

Speaker #3: And, as you note, the second quarter was strong, with July being the strongest month of the quarter. That carries into the beginning of the third quarter, which we obviously identified.

Hi, good morning, everyone and nice to see the progress do you think about the store portfolio and what you saw from the Reimagined stores and.

Learnings from those and do you expand it to 200 stores 250 stores and then lastly on the gross margin would be it would be incremental cash how are you thinking on pricing for the different categories and brands for private label and branded thank you.

Speaker #3: That's driven by a, you know, a healthy start to back to school. I think there’s an early read on some of the outerwear and colder weather categories, which, you know, you can't bank on what August represents. But it's nonetheless a good start.

Speaker #3: Gives us, I think, cautious, optimism. Meaning that we're celebrating the second quarter, good start to the third quarter, but we're being prudent in our guidance for the third quarter and the remainder of the year, because we want to see how the tariff environment plays out in totality.

Tom Edwards: Gives us, I think, cautious optimism, meaning that we're celebrating the second quarter, good start to the third quarter, but we're being prudent in our guidance for the third quarter and the remainder of the year because we want to see how the tariff environment plays out in totality.

Thanks, Dana let me take the first part and then I'll have Tom I'll cover the second in terms of the our 125, we had a strong quarter and it was both in the.

First 50, and then the next $75. So positive performance in both and the performance is a combination of what we've talked about it's the additional staffing where the customer was asking for it. It's in the fitting rooms. It's these ambassadors and key families of businesses, it's better storytelling visual merchandising dedicated.

Speaker #5: Great color. Best of luck.

Matt Boss: Great caller. Best of luck.

Speaker #3: Thanks, Matt.

Tom Edwards: Thanks, Matt.

Speaker #1: Thank you. The next question is coming from Dana Telsi of Telsi Advisory Group. Please go ahead.

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

Speaker #6: Hi. Good morning, everyone, and nice to see the progress. I do think about the store portfolio and what you saw from the reimagined stores.

Dana Telsey: Hi, good morning, everyone, and nice to see the progress. As you think about the store portfolio and what you saw from the Reimagined 125 stores, any learnings from those, and do you expand it to 200 stores, 250 stores? Lastly, on the gross margin with the incremental tariffs, how are you thinking on pricing for the different categories and brands, both private label and branded? Thank you.

Each of these stores and then I think finally the piece, we probably haven't talked about enough. It's local empowerment, while we're going to get 70 or 75% right. We're asking those local leaders to put their stamp on what's necessary to deliver for the customer. That's why we had best net promoter score on record in the second quarter with the <unk>.

Speaker #6: Any learnings from those and do you expand it to 200 stores, 250 stores? And then lastly, on the gross margin, would the, would the incremental tariffs, how are you thinking on pricing for the different categories and brands?

Speaker #6: Both private label and branded. Thank you.

125, net promoter score even stronger.

Speaker #3: Thanks, Dana. Let me take the first part and then I'll have Tom cover the second. In terms of the R1 25, we had a strong quarter, and it was both in the first 50 and in the next 75.

Tom Edwards: Thanks, Dana. Let me take the first part, and then I'll have Tom cover the second. In terms of the Reimagined 125, we had a strong quarter, and it was both in the first 50 and in the next 75. Positive performance in both. The performance is a combination of what we've talked about. It's the additional staffing where the customer was asking for it. It's in the fitting rooms. It's these ambassadors and key families of businesses. It's better storytelling, visual merchandising dedicated to each of these stores. I think finally, the piece we probably haven't talked about enough, it's local empowerment. While we're going to get 70 or 75% right, we're asking those local leaders to put their stamp on what's necessary to deliver for the customer.

I think as it relates to tariffs we are taking a surgical approach we're going to have price increases. We've had some price increases were also negotiating with the marketplace. It's not a one size fits all so we've tried to be really thoughtful about what categories can bear the cost and the increases and where we've had to negotiate a little bit harder.

Speaker #3: So, positive performance in both. The performance is a combination of what we've talked about: it's the additional staffing where the customer was asking for it.

Speaker #3: It's in the fitting rooms. It's these ambassadors in key families of businesses. It's better storytelling, visual merchandising, dedicated to each of these stores. And then I think finally the piece we probably haven't talked about enough, it's local empowerment.

Tom what would yet.

Tony I would just add a little background on the tariffs Dana we previously had a guidance of 20 to 40 basis point impact, which was 10% to 25 and.

Have increased it to 40 to 60, which is 25% to 40 and that is net of the mitigation factors such as partnering with our suppliers and vendors and diversifying our countries of origin.

Speaker #3: While we're going to get 70 or 75% right, we're asking those local leaders to put their stamp on what's necessary to deliver for the customer.

Speaker #3: That's why we had the best Net Promoter Score on record in the second quarter, with the R1 25's Net Promoter Score even stronger. I think, as it relates to tariffs, we are taking a surgical approach.

We expect the majority of the incremental impact to impact Q4, given our timing of receipts and as Tony mentioned, we are adjusting prices, but as appropriate not broad based and really assessing it with our partners in an effort to remain competitive and I believe that we're really well positioned to navigate through this time, given our business model.

Tom Edwards: That's why we had best net promoter score on record in the second quarter, with the Reimagined 125's net promoter score even stronger. I think as it relates to tariffs, we are taking a surgical approach. We're going to have price increases. We've had some price increases. We're also negotiating with the marketplace. It's not a one-size-fits-all. We've tried to be really thoughtful about what categories can bear the cost and the increases and where we've had to negotiate a little bit harder. Tom, what would you add?

Speaker #3: We're going to have price increases. We've had some price increases. We're also negotiating, you know, with the marketplace. It's not a one size fits all.

Multi brand multichannel multi category and multi price point.

Speaker #3: So, you know, we've tried to be really thoughtful about what categories can bear the cost and the increases, and where we've had to negotiate a little bit harder.

Thanks Dana.

Thanks.

Speaker #3: Tom, what would you add?

Thank you. The next question is coming from Blake Anderson of Jefferies. Please go ahead.

Speaker #4: Tony, I'd just add a, a little background on the tariffs, Dana. we previously had a guidance in of a 20 to 40 basis point impact, which was 10 to 25 cents and have increased it to 40 to 60, which is 25 to 40 cents.

Alex Straton: Tony, I'd just add a little background on the tariffs. Dana, we previously had a guidance in of a 20 to 40 basis point impact, which was $0.10 to $0.25, and have increased it to 40 to 60, which is $0.25 to $0.40. That is net of mitigation factors, such as partnering with our suppliers and vendors and diversifying our countries of origin. We expect the majority of the incremental impact to impact Q4, given our timing of receipts. As Tony mentioned, we're adjusting prices, but as appropriate, not broad-based, and we're really assessing it with our partners in an effort to remain competitive. I believe that we are really well positioned to navigate through this time, given our business model of multi-brand, multi-category, and multi-channel, and multi-price point.

Hi, good morning, Congrats on the nice results. So I wanted to just build on <unk> question earlier about the quarter to date in second half. So Tony if you think about now versus maybe three months ago. When we last spoke to you are you still embedding essentially the same level of uncertainty and caution so they consume.

Speaker #4: And that is net of mitigation factors, such as partnering with our suppliers and vendors and diversifying our countries of origin. We expect the majority of the incremental impact to affect Q4, given our timing of receipts.

<unk>.

Are you able to say you feel little bit better about the consumer.

Speaker #4: And as Tony mentioned, we're adjusting prices, but as appropriate, not broad-based, and we're really assessing it with our partners in an effort to remain competitive.

Just curious on maybe the tone has changed and especially in light of.

The pending tariffs increases still coming through and then Tom just mentioning you're adjusting prices. Thank you.

Speaker #4: And I believe, that we are really well positioned to navigate through this, time, given our business model of multi-brand, multi-channel, multi-category, and multi-price point.

Thanks Blake.

We still view the consumer as choice full but we also view the consumer's resilient and I think the beat in the second quarter says what we thought at the end of the first quarter. The consumer was more resilient and we've seen that continue into the beginning of the fall season that being said, we want to be prudent in our guidance and make sure we see the full impact.

Speaker #3: Thanks, Dana.

Tom Edwards: Thanks, Dana.

Speaker #6: Thank you.

Speaker #1: Thank you. The next question is coming from Blake Anderson of Jefferies. Please go ahead.

Operator: Thank you. The next question is coming from Blake Anderson of Jefferies. Please go ahead.

Speaker #7: Good morning. Congrats on the nice results. So I wanted to, just build on Matt's question earlier about, about the quarter to date and second half.

Speaker 9: Hi, good morning. Congrats on the nice results. I wanted to just build on Matt's question earlier about the quarter to date and second half. Tony, if you think about now versus maybe three months ago when we last spoke to you, are you still embedding essentially the same level of uncertainty and caution for the consumer, or are you able to say you feel a little bit better about the consumer? Just curious how maybe the tone has changed, especially in light of the pending tariff increases still coming through, and then Tom just mentioning you're adjusting prices. Thank you.

Act of the tariffs across a broad spectrum of categories in retail and other things kind of play out before.

Speaker #7: So, Tony, if you think about now versus maybe three months ago when we last spoke to you, are you still embedding essentially the same level of uncertainty and caution for the consumer?

Understand the true impact of this change in the way pricing is going to occur in the marketplace. We feel good about our customer. She is buying newness. He is buying fashion. They are interested in the new brands and the changes in the assortment and we're seeing it across each of our nameplates.

Speaker #7: Or, or are you able to say you feel a little bit better about the consumer? Just curious how maybe the tone has changed, especially in light of the pending tariff increases still coming through and then Tom just mentioning your adjusting prices.

Last thing I would add is that we have the customer base at Macy's Thats approximately 50 plus percent over $100000 household income so while we have exposure to a lower income levels its not nearly what it what it was and obviously, we talked to an even more affluent consumer at the Bloomingdale's brand and I think.

Speaker #7: Thank you.

Speaker #3: Than-thanks, Blake. we, we still view the consumer as choice full, but we also view the consumer as resilient. And I think the beat in the second quarter says what we thought at the end of the first quarter, the consumer was more resilient.

Tom Edwards: Thanks, Blake. We still view the consumer as choiceful, but we also view the consumer as resilient. I think the beat in the second quarter says what we thought at the end of the first quarter, the consumer was more resilient. We've seen that continue into the beginning of the fall season. That being said, we want to be prudent in our guidance and make sure we see the full impact of the tariffs across a broad spectrum of categories and retail and other things kind of play out before we, I think, understand the true impact of this change in the way pricing is going to occur in the marketplace. We feel good about our customer. You know, she's buying newness. He's buying fashion. They're interested in the new brands and the changes in the assortment. We're seeing it across each of our nameplates.

Speaker #3: And we've seen that continue into the beginning of the fall season. That being said, we want to be prudent in our guidance and make sure we see the full impact of the tariffs across a broad spectrum of categories, retail, and other things kind of play out before we, I think, understand the true impact of this change in the way pricing is going to occur in the marketplace.

As you go by income level, you certainly see a healthier performance in the higher tiers of income.

Thanks, Blake great. Thanks, so much.

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

Speaker #3: We feel good about our customer. You know, she's buying newness. he's buying fashion. They're interested in, the new brands and the changes in the assortment.

Hi, Tony and Tom private brands have been an exciting initiative whats ahead in terms of catalyst there and trying to drive differentiation versus the competitive landscape. So as we think about your third quarter guidance, what's assumed in terms of the negative one 5% comp relative to.

Speaker #3: And we're seeing it across each of our nameplates. The last thing I would add is that we have a customer base at Macy's that's approximately 50 plus percent, over $100,000 household income.

Tom Edwards: The last thing I would add is that we have a customer base at Macy's that's approximately 50+% over $100,000 household income. While we have exposure to lower income levels, it's not nearly what it was. Obviously, we talk to an even more affluent consumer at the Bloomingdale's brand. I think as you go by income level, you certainly see a healthier performance in the higher tiers of income. Thanks, Blake.

Speaker #3: So while we have exposure to lower income levels, it's not nearly what it was. Obviously, we talk to an even more affluent consumer at the Bloomingdale's brand.

The plus.

0.5, and lastly, as we think more longer term and what comp do you need to leverage your fixed expenses in terms of a longer term comp to generate margin expansion overall. Thank you.

Speaker #3: And, and I think as you go by income level, you certainly see a healthier performance in the higher tiers of income. Thanks, Blake.

Thanks, Oliver let me take the first part and I'll have Tom address the last so yeah. As you've noted we've been re imagining private brands for the last two and a half years. We're in the process of working through the home assortment. This year and pleased with some of the initial response, we did a partnership with Alex <unk>.

Speaker #7: Great. Thanks so much.

Speaker 9: Great, thank you so much.

Speaker #1: Thank you. The next question is coming from Oliver Chen of TD Cowen. Please go ahead.

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

Speaker #8: Hi, Tony and Tom. private brands have been an exciting initiative. what's ahead in terms of catalysts there and trying to drive differentiation versus the competitive landscape?

Speaker 9: Hi, Tony and Tom. Private brands have been an exciting initiative. What's ahead in terms of catalysts there and trying to drive differentiation versus the competitive landscape? As we think about your third quarter guidance, what's assumed in terms of the negative 1.5% comp relative to the plus 0.5%? Lastly, as we think more longer term, what comp do you need to leverage your fixed expenses in terms of a longer-term comp to generate margin expansion overall? Thank you.

Org with on 34th which resonated well with the consumer I think leaning into palm Royale as a as a show and is there a way to kind of AD relevancy to the macys private brands was a good move we have our fashion show with <unk> celebrating its 40th anniversary a week from Friday with Christian Siriano.

Speaker #8: And as we think about your third quarter guidance, what's assumed in terms of the, the negative 1.5% comp relative to the plus 0.5? And lastly, as we think more longer term, what comp do you need to, to leverage your fixed expenses in terms of a longer term comp to generate, margin expansion overall?

Another way to AD relevancy and interest to our private brand portfolio. We're pleased with the launch of state of day excited by the growth in style and co. So there's broad base.

Speaker #8: Thank you.

Improvement I think in the private brand portfolio, but the best is still to come because our penetration of private brands is still well below our 20% a high watermark and we know that that's an opportunity for us to grow sales and spanned differentiation and improve margins.

Speaker #3: Thanks, Oliver. Let me take the first part, and I'll have Tom address the last. So, as you noted, we've been reimagining private brands for the last two and a half years.

Tom Edwards: Thanks, Oliver. Let me take the first part, and I'll have Tom address the last. As you noted, we've been reimagining private brands for the last two and a half years. We're in the process of working through the home assortment this year and pleased with some of the initial response. We did a partnership with Alex Freberg with On 34th, which resonated well with the consumer. I think leaning into Pom Royale as a show and as a way to kind of add relevancy to the Macy's private brands was a good move. We have our fashion show with I.N.C. celebrating its 40th anniversary a week from Friday with Christian Siriano, another way to add relevancy and interest to our private brand portfolio. We're pleased with the launch of State of Day, excited by the growth in Style & Co.

Speaker #3: We're in the process of working through the home assortment this year and are pleased with some of the initial responses. We did a partnership with Alex Freberg with On 34th, which resonated well.

I think relative to Q3, we just continue to say, we're going to take a prudent approach to our guide making sure we understand the fullness of the impact to the environment and the consumer so far Q2, the beginning of the fall season, we see a resilient consumer who is interested in newness and fashion.

Speaker #3: With the consumer, I think leaning into Palm Royale as a show and as a way to kind of add relevancy to the Macy's private brands was a good move.

Speaker #3: We have our fashion show with INC celebrating its 40th anniversary, a week from Friday with Christian Siriano, another way to add relevancy and interest to our private brand portfolio.

What would you add on.

Oliver's question on improved comps necessary.

Sure. Thanks, Toni and Oliver in terms of SG&A, I think there's an opportunity longer term to leverage our SG&A.

Speaker #3: We're pleased with the launch of State of Day and excited by the growth in style and code. There's a broad base improvement, I think, in the private brand portfolio.

Tom Edwards: There's broad-based improvement, I think, in the private brand portfolio. The best is still to come because our penetration of private brands is still well below our 20% high watermark. We know that that's an opportunity for us to grow sales and expand differentiation and improve margins. I think relative to Q3, we just continue to say we're going to take a prudent approach to our guide, making sure we understand the fullness of the impact to the environment and the consumer. So far, Q2, the beginning of the fall season, we see a resilient consumer who's interested in newness and fashion. Tom, what would you add on Oliver's question on improved comps necessary?

And in terms of the comps won't give a specific number oliver but I'm looking at the quarter and what we've done here is deliver $30 million of savings in SG&A.

Speaker #3: But the best is still to come, because our penetration of private brands is still, well below our 20% high watermark. And we know that that's an opportunity for us to grow sales and span differentiation.

Net well reinvesting some in the business and generating topline growth.

That's the type of characteristic and outlook that I think will move going forward and enable us to really leverage it but importantly grow the topline, which I think is key longer term to leveraging sales growth.

Speaker #3: And improve margins. I, I think, relative to Q3, we've just continued to say we're going to take a prudent approach to our guide, making sure we understand the fullness of the impact to the environment and the consumer.

In terms of gross margin and I want to build on the private label comment again, we also have an opportunity longer term to expand our gross margin expanding private brands, which historically around 20% of sales and now in the lower teens will help drive gross margin. They typically have a higher margin and then our initiatives, which are helping to better serve.

Speaker #3: So far, Q2, the beginning of the fall season, we see a resilient consumer who's interested in newness and fashion. Tom, what would you add on Oliver's question on, improved, comps necessary?

Speaker #4: Sure. Thanks, Tony. And Oliver, in terms of SG&A, I think there's an opportunity, longer term, to leverage our SG&A. In terms of the comps, I won't give a specific number, Oliver, but looking at the quarter and what we've done here, we have delivered $30 million of savings in SG&A.

Alex Straton: Sure. Thanks, Tony. In terms of SG&A, I think there's an opportunity longer term to leverage our SG&A. In terms of the comps, I won't give a specific number, Oliver, but I'm looking at the quarter and what we've done here is deliver $30 million of savings in SG&A net, while reinvesting some in the business and generating top line growth. That's the type of characteristic and outlook that I think will move going forward and enable us to really leverage it. Importantly, grow the top line, which I think is key longer term to leveraging sales growth. In terms of gross margin, and I want to build on the private label comment again, we also have an opportunity longer term to expand our gross margin. Expanding private brands, which historically are around 20% of sales and now in the lower teens, will help drive gross margin.

Customers and getting better merchandize assortments out there as well as other end to end deficiencies will also help on the gross margin side, So I really see opportunities on both gross margin and SG&A as.

As the initiatives for both new chapter continue to resonate.

Speaker #4: net, well reinvesting some in the business and generating top line growth. So, so that's the type of, of characteristic and, and outlook that I think will, move going forward.

Thank you best regards.

Oliver.

Thank you. The next question is coming from Alex Straighten of Morgan Stanley. Please go ahead.

Speaker #4: And enable us to really leverage it. But importantly, grow the top line, which I think is key longer term to leveraging sales growth. in terms of, gross margin, and I want to build on the private label comment again, we also have an opportunity longer term to expand our gross margin.

Perfect. Thanks, so much for taking the question and congrats on a nice quarter maybe.

Or for Tom just on the SG&A improvement on that rate versus first your last full year guidance can.

Speaker #4: Expanding private brands, which historically around 20% of sales, and now in the lower teens, will help drive gross margin. They typically have a higher margin.

Can you just talk about where you're finding more savings, meaning both in the quarter and also for the back half and I think it assumes a little bit more reduction in the back half and then you delivered in the first.

Alex Straton: They typically have a higher margin. Our initiatives, which are helping to better serve customers and getting better merchandise assortments out there, as well as other end-to-end efficiencies, will also help on the gross margin side. I really see opportunities on both gross margin and SG&A as the initiatives for bold new chapter continue to resonate.

Speaker #4: And then our initiatives, which are helping to better serve customers and getting better merchandise assortments out there, as well as other end-to-end efficiencies, will also help on the gross margin side.

Just curious about that.

And then maybe for Tony I'm, just curious about that acceleration in the bloomingdale's comp if you could unpack that a little bit more sequentially. Thanks, so much.

Speaker #4: So, I really see opportunities on both gross margin and SG&A, as the initiatives for the bold new chapter continue to resonate.

Thanks, Alex well looking at SG&A as Tony mentioned, we haven't always on approach to profit improvement and that gives us the room to invest in our growth while delivering improved returns and ultimately levering. The P&L SG&A was down nearly $38 million in the quarter and that was across.

Speaker #7: Thank you. Best regards.

Tom Edwards: Thank you. Best regards.

Speaker #3: Thanks, Oliver.

Speaker 9: Thanks, Oliver.

Speaker #1: Thank you. The next question is coming from Alex Straiten of Morgan Stanley. Please go ahead.

Operator: Thank you. The next question is coming from Alex Straton of Morgan Stanley. Please go ahead.

Speaker #9: Perfect. Thanks so much for, for taking the question and, and congrats on a, a nice quarter. Maybe, for, for, for Tom, just on the SG&A improvement on that rate verse, versus your last full year guidance.

Speaker 9: Perfect. Thanks so much for taking the question and congrats on a nice quarter. Maybe for Tom, just on the SG&A improvement on that rate versus your last full-year guidance, can you just talk about where you're finding more savings, maybe both in the quarter and also for the back half? I think it assumes a little bit more reduction in the back half than you've delivered in the first. Just curious about that. Maybe for Tony, I'm just curious about that acceleration in the Bloomingdale's comp, if you could unpack that a little bit more sequentially. Thanks so much.

<unk> benefits from the store closures that we implemented last year. It was continued end to end savings benefits as those initiatives pay dividends and we will continue to do so over the next several years.

Speaker #9: Can you just talk about where you're finding more savings, maybe both in the quarter and also for the back half? And I think it assumes a little bit more reduction in the back half than you've delivered in the first.

And also just making sure we're very conscious and managing costs on an ongoing basis.

You are correct in the second half, we expect SG&A dollars to continue to be down.

Speaker #9: So just curious about that. And then maybe for Tony, I'm just curious what that acceleration in the Bloomingdale's comp, if you could unpack that a little bit more sequentially.

Q3 down low single digits and in Q4 down low to mid single digits.

Speaker #9: Thanks so much.

So this is really a reflection of those continued savings in both store and end to end and otherwise and it is a little more weighted to Q4, given the timing of store closures and other benefits and I would point out. This is a net number because we are still reinvesting in the business to drive the topline and enjoying the.

Speaker #3: Thanks, Alex.

Alex Straton: Thanks, Alex. Looking at SG&A, as Tony mentioned, we have an always-on approach to profit improvement, and that gives us the room to invest in our growth while delivering improved returns and ultimately levering the P&L. SG&A was down nearly $30 million in the quarter, and that was across benefits from the store closures that we implemented last year. It was continued end-to-end savings benefits as those initiatives pay dividends and will continue to do so over the next several years. Also, just making sure we're very conscious in managing costs on an ongoing basis. You are correct in the second half, we expect SG&A dollars to continue to be down in Q3, down low single digits, and in Q4, down low to mid-single digits. This is really a reflection of those continued savings in both store and end-to-end and otherwise.

Speaker #4: Well, looking at SG&A, as Tony mentioned, we have an always-on approach to profit improvement. That gives us the room to invest in our growth while delivering improved returns and ultimately leveraging the P&L.

Speaker #4: SG&A was down nearly $30 million in the quarter. That was due to benefits from the store closures that we implemented last year. There were continued end-to-end savings, and those initiatives will pay dividends and continue to do so over the next several years.

Benefits of bold, new chapter initiatives, which are resonating and driving a difference in performance, where we are implementing those.

And Alex I would say the bloomingdale's business just continues to build momentum they have a terrific strategy a strong leadership team.

Speaker #4: And, also just making sure we're very, conscious in managing costs on an ongoing basis. you are correct in the second half, we expect SG&A dollars to continue to be down.

Great continuity and the focus in a market that is somewhat disrupted.

<unk> had additional brand additions, which had been a part of their growth. They have grown their digital business, which is a part of their growth they've done some wonderful collaborations with their private brands and market brands, which has been a part of their growth and they are adding bloom is locations and bloomingdale's outlet locations. So we see plenty of runway for.

Speaker #4: In Q3, down low single digits and in Q4, down low to mid single digits. so this is really a reflection of those continued savings and, both store and end-to-end.

Speaker #4: And otherwise, and it's a little more weighted to Q4 given the timing of store closures and, and other benefits. and I wouldn't point out this is a net number because we're still reinvesting in the business to drive the top line.

Alex Straton: It's a little more weighted to Q4 given the timing of store closures and other benefits. I would point out this is a net number because we're still reinvesting in the business to drive the top line and enjoying the benefits of bold new chapter initiatives, which are resonating and driving a difference in performance where we are implementing those.

The bloomingdale's business and I think it's uniquely positioned and is aspirational to luxury positioning where that advance contemporary customer, which is such a growing part of the business. It's right in the sweet spot of what Bloomingdale's does best in the marketplace.

Speaker #4: And enjoying the, benefits of bold new chapter initiatives, which are resonating and driving a difference in performance, where we are implementing those.

Speaker #3: And Alex, I would say the Bloomingdale's business just continues to build, momentum. They have a terrific strategy, a strong leadership team. great continuity in the, the focus in a market that is somewhat disrupted.

Yeah.

Tom Edwards: Alex, I would say the Bloomingdale's business just continues to build momentum. They have a terrific strategy, a strong leadership team, great continuity in the focus in a market that is somewhat disrupted. They have had additional brand additions, which have been a part of their growth. They have grown their digital business, which is a part of their growth. They have done some wonderful collaborations with their private brands and market brands, which has been a part of their growth. They are adding Bloomy's locations and Bloomingdale's outlet locations. We see plenty of runway for the Bloomingdale's business. I think it's uniquely positioned in this aspirational to luxury positioning where that advanced contemporary customer, which is such a growing part of the business, it's right in the sweet spot of what Bloomingdale's does best in the marketplace.

Thanks, so much good luck.

Thanks, Alex.

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

Hey, guys. This is Ryan <unk> on here for Chuck I wanted to ask a little bit about the traffic comp the comp composition traffic versus ticket.

Speaker #3: They've had additional brand additions, which have been a part of their growth. They've grown their digital business, which is a part of their growth.

Both on an owned basis and on basis and then also you know broadly speaking what are you seeing in the marketplace and more.

Speaker #3: They've done some wonderful collaborations with their private brands and market brands, which have been a part of their growth. They're adding Bloomy's locations and Bloomingdale's outlet locations.

In terms of pricing in terms of pricing in terms of tariffs from peers and then what youre doing.

Speaker #3: So we see plenty of runway for the Bloomingdale's business. And I think it's uniquely positioned in this aspirational to luxury positioning where that advanced contemporary customer, which is such a growing part of the business, it's right in the sweet spot of what Bloomingdale's does best in the marketplace.

That in response, thanks very much.

Ryan Let me take the first part and then I'll, let Tom take the second part.

Our our improvement in business was broad based as I said by category and was also driven by improvement in traffic improvement in average order value and like we've said an improvement in customer experience.

Speaker #9: Thanks so much. Good luck.

Speaker 9: Thanks so much. Good luck.

Speaker #3: Thanks, Alex.

Tom Edwards: Thanks, Alex.

Speaker #1: Thank you. The next question is coming from Chuck Grom of Gordon Haskitt. Please go ahead.

Operator: Thank you. The next question is coming from Chuck Graham of Gordon Haskett. Please go ahead.

One pocket that was a little softer was a unit demand and obviously I think that's partly reflecting the consumer being choice moment, partly reflecting the beginning impacts of some pricing, but I think we bought it that way we've got a good composition of inventory across a broad base of categories and I think are well prepared for the fall season.

Speaker #10: Hey, guys. This is, Ryan Ryan Vulture on here for Chuck. I wanted to ask a little bit about the traffic comparative, sorry, the comp compensation, traffic versus ticket.

Speaker 9: Hey, guys. This is Ron Boldgeron here for Chuck. I wanted to ask a little bit about the comp composition, traffic versus ticket, both on an owned basis and an OLM basis. Also, broadly speaking, what are you seeing in the marketplace a little more in terms of pricing, in terms of pricing on, in terms of tariffs from Kiers, and then what you're doing about that in response? Thanks very much.

Speaker #10: both on an own basis and an OLM basis. And then also, you know, broadly speaking, what are you seeing in the marketplace a little more?

Our inventory position being down 8% kind of going into the fall season, having open to buy and having the strength of our marketplace as well as our license businesses to support even more growth beyond what we've bought Tom what would you add relative to what youre seeing in the marketplace for tariffs.

Speaker #10: in terms of pricing, in terms of pricing on, in terms of tariffs from peers, and then what you're doing, about that in response? Thanks very much.

Speaker #3: Ryan, let me take the first part and then I'll let Tom, take the second part. You know, our, our improvement in, business was broad based, as I said, by category.

Tom Edwards: Ryan, let me take the first part, and then I'll let Tom take the second part. You know, our improvement in business was broad-based, as I said, by category and was also driven by improvement in traffic, improvement in average order value, and like we've said, improvement in customer experience. The one pocket that was a little softer was unit demand. Obviously, I think that's partly reflecting the consumer being choiceful and partly reflecting the beginning impacts of some pricing. I think we've bought it that way. We've got a good composition of inventory across a broad base of categories, and I think are well prepared for the fall season. I like our inventory position being down 0.8% going into the fall season, having open to buy, and having the strength of a marketplace as well as our licensed businesses to support even more growth beyond what we've bought.

I'd just emphasize Tony your comment on beginning to see the impact. So we've built in a more prudent outlook in the second half with a more choice full consumer depending on tariff impact overall, but we are in the early stages of seeing that as they are beginning to flow through.

Speaker #3: And was also driven by improvement in traffic, improvement in average order value, and, like we've said, improvement in customer experience. The one pocket that was a little softer was unit demand.

Speaker #3: And obviously, I think that's a partly reflecting the consumer being choice full and partly reflecting the beginning impacts of some pricing. But I think we've bought it that way.

We're going to monitor it really carefully and adjust prices as appropriate, but again not do a broad based approach.

Speaker #3: We've got a good composition of inventory across a broad base of categories. And I think are well prepared, for the fall season. I like our inventory position being down 0.8%, kind of going into the fall season, having open to buy.

And make sure we assess it down to a really granular level with our partners and remain competitive.

And I think to close we have room, and what we have guided to be able to be competitive to be able to hold onto market share without buying the business and I think that's the balance how we satisfy the customer and how we return value to shareholders.

Speaker #3: And having the strength of, marketplace, as well as our licensed businesses to support even more growth beyond what we've bought. Tom, what would you add relative to what you're seeing in the marketplace for tariffs?

Tom Edwards: Tom, what would you add relative to what you're seeing in the marketplace for tariffs?

Thanks for the question Ryan.

Speaker #4: I'd just emphasize, Tony, your comment on beginning to see the impact. so we've, built in a more prudent outlook in the second half with a more choice full consumer, depending on tariff impact overall.

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

Alex Straton: I'd just emphasize, Tony, your comment on beginning to see the impact. We've built in a more prudent outlook in the second half with a more choiceful consumer depending on tariff impact overall. We are in the early stages of seeing that as they are beginning to flow through. We're going to monitor it really carefully and adjust prices as appropriate, again, not do a broad-based approach and make sure we assess it down to a really granular level with our partners and remain competitive.

Thanks, It's Tracy Kogan filling in for Paul I, just wanted to follow up on the last question. I know you said you just starting to see some price increases and I was wondering how that how that is falling out between your own private brand and national brands are you seeing already some increase in both and then I'm just wondering since you havent seen some.

Speaker #4: But we are in the early stages of seeing that as they are beginning to flow through. So we're going to monitor it really carefully and adjust prices as appropriate.

Speaker #4: but, again, not do a broad based, approach or, and make sure we assess it down to a really, granular level with our partners and remain competitive.

Increases as of now having the elasticity been looking relative to what you expected is it kind of buy the unit.

Speaker #3: And I think to close, we have room in what we have guided to be able to be competitive, to be able to hold onto market share without buying the business.

Tom Edwards: I think to close, we have room in what we have guided to be able to be competitive, to be able to hold on to market share without buying the business. I think that's the balance, how we satisfy the customer and how we return value to shareholders. Thanks for the question, Ryan.

Changes in line with what you would expect so far thanks.

Thanks for the question Tracy, Yes, I think it's the early innings on how the consumer is responding to the changes in the marketplace. I think the good news is there is a level of resiliency theres a level of interest and newness in fashion. We are not bought completely into the fall season, we have the leverage points of Mark.

Speaker #3: And I think that's the balance: how we satisfy the customer and how we return value to shareholders. Thanks for the question, Ryan.

Speaker #1: Thank you. The next question is coming from Paul Lejoy of Citigroup. Please go ahead.

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

Speaker #6: Thanks. It's Tracy Kogan filling in for Paul. I just wanted to follow up on the last question. I know you said you're just starting to see some price increases.

Dana Telsey: Thanks. It's Tracy Cogan filling in for Paul. I just wanted to follow up on the last question. I know you said you're just starting to see some price increases, and I was wondering how that is falling out between your own private brands and national brands. Are you seeing already some increases in both? I was just wondering, since you have seen some increases as of now, how has the elasticity been looking relative to what you expected? Is it kind of, are the unit changes in line with what you would expect so far? Thanks.

It plays in our licensed businesses.

And I would say that in some cases, where tickets were higher ore costs were higher we bought fewer units in other cases, we remained consistent with units and in other cases.

Speaker #6: And I was wondering how that is falling out between your own private brands and national brands. Are you seeing already some increases in both?

We didn't buy as much of a brand or category. So I think this is just such a wonderful example of being a multi brand multi category multichannel and multi price point and I want to say again multi price point because when you can go from off price to luxury youre not reliant on one thing and if something wasn't competitive if we felt it was too big of a <unk>.

Speaker #6: And then I'm just wondering, since you have seen some increases as of now, how has the elasticity been looking relative to what you expected?

Speaker #6: Is it, is it kind of, are the unit, changes in line with what you would expect so far? Thanks.

Speaker #3: Thanks for the question, Tracy. Yeah, I think it's the early innings on how the consumer is responding to the changes in the marketplace. I think the good news is there's a level of resiliency; there's a level of interest in newness and fashion.

Tom Edwards: Thanks for the question, Tracy. Yeah, I think it's the early innings on how the consumer is responding to the changes in the marketplace. I think the good news is there's a level of resiliency, there's a level of interest in newness and fashion. We are not bought completely into the fall season. We have the leverage points of marketplace and our licensed businesses. I would say that in some cases where tickets were higher or costs were higher, we bought fewer units. In other cases, we remain consistent with units, and in other cases, we didn't buy as much of a brand or category. I think this is just such a wonderful example of being a multi-brand, multi-category, multi-channel, and multi-price point. I want to say again, multi-price point, because when you can go from off-price to luxury, you're not reliant on one thing.

For the consumer we didn't buy it or buy as much and I think that's one of those moments where being this modern marketplace with department stores and absolute advantage in this environment.

And Tracy I, just build on that regardless of the external environment. Our bold new tractor initiatives are really positioned to support performance and what we saw in the second quarter performance.

Speaker #3: We are not completely bought into the fall season. We have the leverage points of the marketplace and our licensed businesses. And I would say that in some cases, where tickets were higher or costs were higher, we bought fewer units.

Performance and improvement in traffic, so people are buying more and coming in and it's really due to those base initiatives, which are going to continue through the second half regardless of what's happening elsewhere.

Speaker #3: In other cases, we remain consistent with units. And in other cases, we, we did, we didn't buy as much of a brand or category.

Okay.

Speaker #3: So, I think this is just such a wonderful example of being a multi-brand, multi-category, multi-channel, and multi-price point. And I want to say again, multi-price point, because when you can go from off-price to luxury, you're not reliant on one thing.

Got you. Thanks, so much.

Thank you.

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

Hey, guys. Thanks for taking the question here.

First one just on <unk>.

Speaker #3: And if something wasn't competitive, if we felt it was too big a reach for the consumer, we didn't buy it or buy as much.

Tom Edwards: If something wasn't competitive, if we felt it was too big a reach for the consumer, we didn't buy it or buy as much. I think that's one of those moments where being this modern marketplace or department store is an absolute advantage in this environment.

Adding to the Bloomingdale's question from earlier and nice to see the comp there we've seen continued pressures and even bankruptcies in the luxury market here lately, just maybe speak to what youre seeing in that market and where youre seeing the accelerating opportunities to gain gained share there as that category seems to be getting a little tougher nicely counterintuitive theyre suppose Tom.

Speaker #3: And I think that's one of those moments where being this modern marketplace or department store is an absolute advantage in this environment.

Speaker #4: And Tracy, I just build on that. Regardless of the external environment, our bold new chapter initiatives are really positioned to support performance. And what we saw in the second quarter was a performance and improvement in traffic.

Alex Straton: Tracy, I'd just build on that. Regardless of the external environment, our bold new chapter initiatives are really positioned to support performance. What we saw in the second quarter was performance and improvement in traffic. People are buying more and coming in, and it's really due to those base initiatives, which are going to continue through the second half regardless of what's happening elsewhere.

Much to tariffs impact the second quarter, and then finally I see it.

It lets say you lowered the back half credit growth rate a little bit.

Speaker #4: So, people are buying more and coming in, and it's really due to those base initiatives, which are going to continue through the second half regardless of what's happening elsewhere.

Maybe.

11% to 15%.

<unk> in the first half just any comment on you made a comment on this on the health of the portfolio. There. So I'm just curious what.

Speaker #6: Gotcha. Thanks so much.

Dana Telsey: Gotcha. Thanks so much.

Speaker #3: Thank you.

Tom Edwards: Thank you.

What are you baking in none of the deceleration as we think about the run rate into next year. Thanks.

Speaker #1: Thank you. Our next question is coming from Michael Benetti of Evercore ISI. Please go ahead.

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

So let me start with Bloomingdale's and I'll, let Tom cover the tariffs in the credit portfolio, which is healthy and he can speak of that look we see the bloomingdale's business has been terrific and this is now four straight quarters of growth they.

Speaker #11: Hey, guys. Thanks for taking our question here. first one, just on, on adding to the Bloomingdale's question from earlier, nice to see the comp there.

Speaker 9: Hey, guys, thanks for taking our question here. First one, just on adding to the Bloomingdale's question from earlier, nice to see the comp there. We've seen continued pressures and even bankruptcies in the luxury market here lately. Just maybe speak to what you're seeing in that market and where you're seeing the accelerating opportunities to gain share there as that category seems to be getting a little tougher, nicely counterintuitive there, I suppose. Tom, how much did tariffs impact the second quarter? Finally, I see you, let's say you lowered the back half credit growth rate a little bit, maybe 11% to 15%, 20% in the first half. Just any comment on, you made a comment on the health of the portfolio there. I'm just curious what you're baking in on the deceleration as we think about the run rate into next year. Thanks.

Speaker #11: We've seen continued pressures and even bankruptcies in the luxury market here lately. Just maybe speak to what you're seeing in that market and, and where you're seeing the accelerating, ing, opportunities to gain, gain share there.

They are taking market share they are adding additional brands, we're seeing Mike broad based growth across ready to wear denim men's home kids beauty fragrances I I think that this brand as done a terrific job and when you think of kind of.

Speaker #11: As that category is going to be getting a little tougher—nicely counterintuitive there, I suppose. Tom, how much did tariffs impact the second quarter?

Speaker #11: And then finally, I see you, it looks like you lowered the back half credit growth rate a little bit. maybe 11 to 15 percent, 20s in the first half.

Continuity of leadership continuity of strategy continuity of partnerships in the market paying our bills strong balance sheet. The strong corporate supportive Macy's Inc. Bloomingdale's is positioned for continuous growth and I think we have the additional opportunities of obviously brand expansions digital growth <unk>.

Speaker #11: Just any comment on you. You made a comment on this, on the health of the portfolio there, so I'm just curious what you're baking in on the deceleration as we think about the run rate into next year.

Speaker #11: Thanks.

Speaker #3: Well, let me start with Bloomingdale's on a led. Tom can cover the tariffs and the credit portfolio, which is healthy. He can speak to that.

Tom Edwards: Let me start with Bloomingdale's and I'll let Tom cover the tariffs and the credit portfolio, which is healthy, and he can speak to that. The Bloomingdale's business has been terrific, and this is now four straight quarters of growth. They are taking market share. They are adding additional brands. We are seeing broad-based growth across ready-to-wear, denim, men's, home, kids, beauty, fragrances. I think that this brand has done a terrific job. When you think of kind of continuity of leadership, continuity of strategy, continuity of partnerships in the market, paying our bills, strong balance sheet, the strong corporate support of Macy's Inc., Bloomingdale's is positioned for continuous growth. I think we have the additional opportunities of obviously brand expansions, digital growth, additional door expansions with Bloomy's and off-price. Bloomingdale's off-price business continues to grow, had a really good quarter.

<unk> door expansion with <unk> and off price the bloomingdale's off price business continues to grow at a really good quarter. So I I don't look at the marketplaces defining bloomingdale's opportunity I look at bloomingdale's defining bloomingdale's opportunity.

Speaker #3: Look, we see that the Bloomingdale's business has been terrific. This is now four straight quarters of growth. They are taking market share and adding additional brands.

Speaker #3: We are seeing Mike broad-based, growth across ready-to-wear, denim, men's, home, kids, beauty, fragrances. I, I think that this brand has, done a terrific job.

And Mike regarding tariffs and credit tariffs in the second quarter, we have provided our prior full year guidance of 20 to 40 basis points for 10% to 25.

And that was a little bit more in the second quarter, we saw some of the higher tariffs coming in at the 145% level. So we did see GM impact related to that in our gross margin rate was also a little lower than last year.

Speaker #3: And when you think of kind of continuity of leadership, continuity of strategy, continuity of partnerships in the market, paying our bills, strong balance sheet, the strong corporate support of Macy's Inc., Bloomingdale's is positioned for continuous growth.

Q1, we move through inventory and really put us in a great position to start to fall in the back half of the year with a really clean inventory position.

Speaker #3: And I think we have the additional opportunities of, obviously, brand expansions, digital growth, and additional door expansions with Bloomy's and off-price. The Bloomingdale's off-price business continues to grow and had a really good quarter.

And I would point out that our gross margin was better than our expectations in the second quarter. So all that considered we are doing better than we expected in coming into the second half in a great position from a credit portfolio perspective, really pleased with the growth the significant growth 20 $28 million in revenue.

Speaker #3: So, I, I, I don't look at the marketplace as defining Bloomingdale's opportunity. I look at Bloomingdale's defining Bloomingdale's opportunity.

Tom Edwards: I don't look at the marketplace as defining Bloomingdale's opportunity. I look at Bloomingdale's defining Bloomingdale's opportunity.

Speaker #4: Nice. And Mike, regarding tariffs and credit, tariffs in the second quarter, we had provided a prior full-year guidance of 20 to 40 basis points.

Alex Straton: Nice. Mike, regarding tariffs and credit, tariffs in the second quarter, we had provided a prior full-year guidance of 20 to 40 basis points or $0.10 to $0.25. That was a little bit more in the second quarter. We saw some of the higher tariffs coming in at the 145% level. We did see a GM impact related to that, and our gross margin rate was also a little lower than last year. In Q1, we moved through inventory and really put us in a great position to start the fall in the back half of the year with a really clean inventory position. I would point out that our gross margin was better than our expectations in the second quarter. All that considered, we're doing better than we expected and coming into the second half in a great position.

In the second quarter, and we expect to see continued strong results, it's really due to the credit portfolio strength, and how we're underwriting and managing that and really linking up with our store initiative.

Speaker #4: We're $0.10 to $0.25, and that was a little bit more in the second quarter. We saw some of the higher tariffs coming in at the 145% level.

Speaker #4: So we did see a GM impact related to that. And our gross margin rate was also a little lower than last year. In Q1, we moved through inventory.

All leagues and across the business to support that which is an integral part of the overall Macy's ecosystem.

Thanks, a lot guys I appreciate it thank you Mike.

Speaker #4: And really put us in a great position to start the fall in the back half of the year, with a really clean inventory position.

Thank you. Our next question is coming from Paul Kearney of Barclays. Please go ahead.

Hey, good morning, Thanks for taking my question on tariffs how should we think about that impact as we look into next year, how much do you anticipate being able to mitigate and should we anticipate a step up in mitigation in the spring season, and then over time. Thank you.

Speaker #4: And I would point out that our gross margin was better than our expectations in the second quarter. So all that considered, we're doing better than we expected and coming into the second half in a great position.

Speaker #4: From a credit portfolio perspective, we are really pleased with the growth. The significant growth—$28 million in revenue—in the second quarter. We expect to see continued strong results.

Alex Straton: From a credit portfolio perspective, really pleased with the growth, the significant growth, $28 million in revenue in the second quarter, and we expect to see continued strong results. It's really due to the credit portfolio strength and how we're underwriting and managing that and really linking up with our store colleagues and across the business to support that, which is an integral part of the overall Macy's ecosystem.

Let me take the first part and then I'll, let Tom add his color I think it's a little early to be forecasting tariffs in 2026, we don't know the magnitude of tariffs. We don't know what tariffs that currently are in place are going to hold.

Speaker #4: It's really due to the credit portfolio, strength, and how we're underwriting and managing that. And really linking up with our store initiative, colleagues and across the business to support, that, which is an integral part of the overall Macy's ecosystem.

We're certainly going to have more opportunities to mitigate we could have mitigated the second quarter better than we currently did.

But I think it's early to kind of comment on the tariff situation in 2026, I think what we're focused on as a team is how we continue to build on this momentum that is growing for Macy's Inc. How do we make sure that the things that we control that we're continuing to improve upon whether that's customer experience newness in our.

Speaker #3: Thanks a lot, guys. Appreciate it. Thank you, Mike.

Speaker 9: Thanks a lot, guys. Appreciate it.

Tom Edwards: Thank you, Mike.

Speaker #1: Thank you. Our next question is coming from Paul Carney of Barclays. Please go ahead.

Operator: Thank you. Our next question is coming from Paul Carney of Barclays. Please go ahead.

Speaker #8: Hey, good morning. Thanks for taking my question. On tariffs, how should we think about that impact as we look into next year? How much do you anticipate being able to mitigate?

Speaker 9: Hey, good morning. Thanks for taking my question. On tariffs, how should we think about that impact as we look into next year? How much do you anticipate being able to mitigate, and should we anticipate a step up in mitigation in the spring season and then over time? Thank you.

Assortments variety within our pricing better balanced between our owned and licensed and marketplace businesses off price full price businesses I think those things. We can continue to do a better job than we've done we got credit in the second quarter for the improvements that we've made but we have plenty of room to continue to grow.

Speaker #8: And should we anticipate a step up in mitigation in the spring season and then over time? Thank you.

Speaker #3: Let, let me take the first part and then I'll let Tom add his color. I, I think it's a little early to be forecasting tariffs in 2026.

Tom Edwards: Let me take the first part, and then I'll let Tom add his color. I think it's a little early to be forecasting tariffs in 2026. We don't know the magnitude of tariffs. We don't know what tariffs that currently are in place are going to hold. We're certainly going to have more opportunities to mitigate. We could have mitigated the second quarter better than we currently did. I think it's early to comment on the tariff situation in 2026. What we are focused on as a team is how we continue to build on this momentum that is growing for Macy's Inc. How do we make sure that the things that we control, that we're continuing to improve upon, whether that's customer experience, newness in our assortments, variety within our pricing, better balance between our owned, licensed, and marketplace businesses, off-price, full-price businesses?

Speaker #3: We don't know the magnitude of tariffs. We don't know what tariffs are currently in place or what will hold. We're certainly going to have more opportunities to mitigate.

And I'll, just add and emphasize that right now we don't have total clarity on levels of tariffs in 2026 and there is on the other hand more time to address.

Speaker #3: We could have mitigated the second quarter better than, than we currently did. but, but I, I think it's early to kind of comment on the tariff situation in, in 2026.

The key takeaway would be were really well positioned to navigate it our teams are doing amazing job currently and we'll certainly talk more about it as we get towards the end of the year and provide guidance for next year as we normally do on our fourth quarter call.

Speaker #3: I think what we are focused on as a team is how we continue to build on this momentum that is growing, for Macy's Inc. How do we make sure that the things that we control that we're continuing to improve upon, whether that's customer experience, newness in our assortments, variety within our pricing, better balance between our owned licensed and marketplace businesses, off-price, full price businesses.

Thank you.

Thanks, Paul.

Thank you. The next question is coming from Jay sole of UBS. Please go ahead.

Great. Thank you. So much this has come up a couple of times on the call, but Tony I want to ask about the investments that you're making obviously, so I'm very pleased with the investments you're making in service, especially across makes me think.

Speaker #3: I think those things we can continue to do a better job than we've done. We've got credit in the second quarter for the improvements that we've made, but we have plenty of room to continue to grow.

Tom Edwards: I think those things we can continue to do a better job than we've done. We got credit in the second quarter for the improvements that we've made, but we have plenty of room to continue to grow.

But also the SG&A leverage or delivering how do you how.

How do you find the right balance between leveraging growth what would it are there opportunities that you see to maybe grow SG&A dollars more that could maybe get that comp growth rate a couple of hundred basis points higher and how do you think about what to invest in versus what maybe a lot of flow through to the bottom line.

Speaker #4: And I just want to add and emphasize that right now we don't have total clarity on levels of tariffs in 2026. On the other hand, there is more time to address this.

Alex Straton: I just add and emphasize that right now we don't have total clarity on levels of tariffs in 2026, and there is, on the other hand, more time to address. The key takeaway would be we're really well positioned to navigate it. Our teams are doing an amazing job currently, and we'll certainly talk more about it as we get towards the end of the year and provide guidance for next year as we normally do on our fourth quarter call.

Speaker #4: so the, the key takeaway would be we're really well positioned to navigate it. our teams are doing an amazing job currently. And we'll, certainly talk more about it as we get towards the end of the year and provide guidance for next year as we normally do on our fourth quarter call.

Thanks, Jay for the question, let me, let me take the first part and I'm sure Tom.

I would like to add some color as well I think what you describe is how will you balance your strategy and I think as the leader we have to do a good job of managing a portfolio of investments that mean, some things we're going to put more money into I'm, a big believer in colleagues on the floor those customer facing initiatives are.

Speaker #3: Thank you. Thanks, Paul.

Speaker 9: Thank you.

Tom Edwards: Thanks, Paul.

Speaker #1: Thank you. The next question is coming from Jay Sol of UBS. Please go ahead.

Operator: Thank you. The next question is coming from Jay Sole of UBS. Please go ahead.

Speaker #7: Great. Thank you so much. You know, this has come up a couple of times in the call, but Tony, I want to ask about the investments that you're making.

Speaker 9: Great. Thank you so much. This has come up a couple of times in the call, but Tony, I want to ask about the investments that you're making. Obviously, you sound very pleased with the investments you're making in service, especially across Macy's Inc., but also the SG&A leverage you're delivering. How do you find the right balance between leverage and growth? Are there opportunities that you see to maybe grow SG&A dollars more that could maybe get that comp growth rate a couple hundred basis points higher? How do you think about what to invest in versus what to maybe allow to flow through to the bottom line?

Really important to changing the character of the Department store experience, we see it in letters and a daily basis on what we're doing to change the experience for the customer in our stores, we need to add more stores next year, we'll talk about that on the fourth quarter call in terms of how many more stores. We're obviously doing that also in our digital experience I invite you to look at mace.

Speaker #7: Obviously, you sound very pleased with the investments you're making in service, especially across Macy's Inc. but also the SG&A leverage you're delivering. How do you, how do you find the right balance between leverage and growth?

Speaker #7: You know, are there opportunities that you see to maybe grow SG&A dollars more that could maybe get that comp growth rate a couple hundred basis points higher?

These dot com today versus just three months ago, we're providing a richer product driven trend driven storytelling experience.

Speaker #7: And how do you think about, you know, what to invest in versus what to maybe allow to flow through to the bottom line?

Speaker #3: Thanks, Jay, for the question. Let me, let me take the first part and I'm sure, Tom would like to add some color as well.

Tom Edwards: Thanks, Jay, for the question. Let me take the first part, and I'm sure Tom would like to add some color as well. I think what you describe is how you balance your strategy. I think as the leader, we have to do a good job of managing a portfolio of investments. That means some things we're going to put more money into. I'm a big believer in colleagues on the floor. Those customer-facing initiatives are really important to changing the character of the department store experience. We see it in letters on a daily basis on what we're doing to change the experience for the customer in our stores. We need to add more stores next year. We'll talk about that on the fourth quarter call in terms of how many more stores. We're obviously doing that also in our digital experience.

To your challenge our job is to satisfy the customer and in turn satisfy the shareholder we have to make sure we're delivering a better experience investing to grow the comp sales and then leverage our structure. So that we are delivering more on the bottom line, Tom what would yet.

Speaker #3: I think what you describe is how you balance your strategy. And I think, as a leader, we have to do a good job of managing a portfolio of investments.

Speaker #3: That means some things we're going to put more money into, I'm a big believer in colleagues on the floor. Those customer-facing initiatives are really important to changing the character of the department store experience.

We are always on savings and do we have a large pipeline of savings from continued store closures as we previously announced and end to end initiatives and just managing the business to be more efficient on a daily basis and as we do that we're reviewing initiatives. We're testing we're learning we're improving so there is a process.

Speaker #3: We see it in letters, in a daily basis on what we're doing to change the experience for the customer in our stores. We need to add more stores next year.

Speaker #3: We'll talk about that on the fourth quarter call in terms of how many more stores. We're obviously doing that also in our digital experience.

Here, Jay as we move forward to make sure we're doing things that are impactful and creating a return for shareholders as part of that that's really the balance.

Speaker #3: I invite you to look at macys.com today. Versus just three months ago, we're providing a richer, product-driven, trend-driven storytelling experience. But to your challenge, our job is to satisfy the customer.

Tom Edwards: I invite you to look at Macys.com today versus just three months ago. We're providing a richer, product-driven, trend-driven storytelling experience. To your challenge, our job is to satisfy the customer and in turn satisfy the shareholder. We have to make sure we're delivering a better experience, investing to grow the comp sales, and then leverage our structure so that we're delivering more on the bottom line. Tom, what would you add?

Generating savings reinvesting, some and really getting to the point, where leveraging based on driving sales growth, which we saw in this quarter across all of our banners and we're really pleased with that result, well generating $30 million in SG&A savings versus the prior year.

Speaker #3: And, in turn, satisfy the shareholder. We have to make sure we're delivering a better experience investing to grow the comp sales and then leverage our structure so that we're delivering more on the bottom line.

Got it. Thank you so much thanks.

Speaker #3: Tom, what would you add?

Thanks Jay.

Alex Straton: I'd add that we are always on savings, and we have a large pipeline of savings from continued store.

Thank you. Our next question is coming from Janet Kloppenburg of J J K Research Associates. Please go ahead.

Operator: Closures, as we previously announced, end-to-end initiatives, and just managing the business to be more efficient on a daily basis. As we do that, we're reviewing initiatives, we're testing, we're learning, we're improving. There is a process here, Jay, as we move forward to make sure we're doing things that are impactful and creating a return for shareholders. As part of that, that's really the balance: generating savings, reinvesting some, and really getting to the point where we are leveraging based on driving sales growth, which we saw in this quarter across all of our banners. We're really pleased with that result, while generating $30 million in SG&A savings versus the prior year.

Good morning, Good morning, Tony and Tom and congratulations on a wonderful quarter.

I have too many questions. So I'm going to get you out of that.

Have.

You any thoughts on what the incremental markdown.

<unk> carried into the second quarter, what influence that had on the comp.

On the comp performance, which was of course excellent and I also was wondering I know, it's early Tom but have you seen.

Any pushback from the consumer on the incremental.

Pricing.

You've delivered for instance, I know that Levi has raised their prices.

David Brown: Got it. Thank you so much.

Pamela Quintiliano: Thanks, Jay.

Tony Spring: Thank you. Our next question is coming from Janet Kloppenberg of JJK Research Associates. Please go ahead.

And I am wondering about the wrap around of the tariffs into the first and second quarter of next year, we're seeing hearing that from a lot of.

Tom Edwards: Good morning, Tony and Tom, and congratulations on a wonderful quarter. I have too many questions, so I'm going to get yelled at. Have you any thoughts on what the incremental markdowns that you carried into the second quarter, what influence that had on the comp performance, which was, of course, excellent? I also was wondering, I know it's early, Tom, but have you seen any pushback from the consumer on the incremental pricing that you've delivered? For instance, I know that Levi has raised their prices. I am wondering about the wraparound of the tariffs into the first and second quarter of next year. We're hearing that from a lot of your competitors, and I wondered about that. Thank you so much.

Competitors and I wonder about that thank you so much.

Thanks Janet.

The question on markdowns impacting the comps in the second quarter I would say, there's some it's a it's a minor part of the improvement in our performance in the second quarter. The areas that had the strongest growth were not the areas that has the biggest markdowns or liabilities kind of coming into the second quarter. So we took those markdowns.

The composition of our inventory is clean I like the early read of August and then what the customer is buying because that is not a markdown related its newness related as back to school related it's early fall product and winter weight categories. So all of that is very positive you mentioned the <unk>.

Levi's business I mentioned on the call Levi's continues to be terrific business for us in all areas of the business and they are great partners were getting top tier products from them and it's the fashion and Levi's that is really selling best for us. So again I think it underscores the customer is more concerned about value.

Matt Boss: Thanks, Janet. The question on markdowns impacting the comps in the second quarter, I would say there's some, it's a minor part of the improvement in our performance in the second quarter. The areas that had the strongest growth were not the areas that had the biggest markdowns or liabilities coming into the second quarter. We took those markdowns. The composition of our inventory is clean. I like the early read of August and what the customer is buying because that is not markdown related. It's newness related. It's back to school related. It's early fall product and winter weight categories. All of that is very positive. You mentioned the Levi's business. I mentioned on the call, Levi's continues to be a terrific business for us in all areas of the business, and they're great partners.

Then they are about the price point is there a reason for something to be more expensive that might be true in a piece of outerwear that might be much harder to get on a T shirt.

Some weird.

Thank you with regard to tariffs Janet I think.

Early we'll talk about the Q1 Q2 for next year, we will have a little more clarity on it in terms of the tariff levels. We do have more time to mitigate and we'll certainly be talking more about that on our Q4 call.

But as I've mentioned before I think we're really well positioned to navigate through it and have been navigating through it.

Across all of our teams really effectively.

And what about the pricing and early indication from the consumer.

Matt Boss: We're getting top-tier products from them, and it's the fashion in Levi's that is really selling best for us. I think it underscores the customer is more concerned about value than they are about the price point. Is there a reason for something to be more expensive? That might be true in a piece of outerwear. That might be much harder to get on a t-shirt.

I would just state that the consumer has been resilient and we've seen that in Q2 and we've seen it at the beginning of Q3, we are to be more prudent in the second half forecasting a little more choice full consumer, but what we've seen so far is resiliency.

Thank you very much good luck.

Thank you Janet appreciate it.

Tom Edwards: Thank you.

Operator: With regard to tariffs, Janet, I think it's a little early to talk about the Q1, Q2 for next year, but we'll have a little more clarity on it in terms of the tariff levels. We do have more time to mitigate, and we'll certainly be talking more about that on our Q4 call. As I mentioned before, I think we're really well positioned to navigate through it and have been navigating through it across all our teams really effectively.

Thank you at this time I would like to turn the floor back over to Mr. Spring for closing comments.

Thank you all for joining US today, we look forward to providing an update on our progress on our next earnings call have a great day everyone.

Ladies and gentlemen. This concludes today's event you may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

Thank you with regard to terrorists, Janet. I, I think it's a little early to talk about the q1 Q2 for next year, but we'll have a little more clarity on it. Um, in terms of the Tariff levels, uh we do have more time to mitigate and we'll certainly be talking more about that on our Q4 call. Um, but I, as I mentioned before, I think we're really well positioned to navigate through it and have been navigating through it um across all our teams really effectively.

Tom Edwards: What about the pricing and early indication from the consumer?

Operator: I would just state that the consumer has been resilient, and we've seen that in Q2, and we've seen it at the beginning of Q3. We are being more prudent in the second half, forecasting a little more choiceful consumer, but what we've seen so far is resiliency.

And what about the pricing and and early indication from the consumer.

I would just state that the consumer has been resilient. And, um, we've seen that in Q2, and we've seen it at the beginning of Q3. Uh, we are, um, to be more prudent in the second half forecasting, a little more choiceful consumer. But what we've seen so far is resiliency.

Tom Edwards: Thank you very much. Good luck.

Matt Boss: Thank you, Janet. Appreciate it.

Thank you very much. Good luck.

Tony Spring: Thank you. At this time, I would like to turn the floor back over to Mr. Spring for closing comments.

Thank you, Jan. I'd appreciate it.

Thank you. At this time. I would like to turn the floor back over to Mr. Spring for closing comments.

Matt Boss: Thank you all for joining us today. We look forward to providing an update on our progress on our next earnings call. Have a great day, everyone.

Thank you all for joining us today. We look forward to providing an update on our progress. On our next earnings call, have a great day, everyone.

Tony Spring: Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

Ladies and gentlemen.

You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.