Past Performance

Macy's First 50 Stores

• Consistent Growth:
  • Achieved positive comparable sales for three consecutive quarters.
  • Key Metrics:
    • Average Unit Retail (AUR) growth.
    • Average Order Value increase.
    • Growth in the number of customers and conversion rates.
• Performance Drivers:
  • AUR and average order value growth are the primary contributors.
  • Increased spending and visit frequency from existing customers.
  • Acquisition of new customers primarily through digital channels.

Non-First 50 Stores

• Declining Performance:
  • Comparable sales down by 0.9%.
  • Challenges:
    • Impact of unseasonably warm weather on cold weather product sell-through.
    • Closure of approximately 65 underperforming stores to optimize profitability.

Overall Financial Metrics

Trends Across Brands

Bloomingdale's

• Sales Growth:
  • Net sales up by 1.4%.
  • Comparable sales increased by 3.2%.
• Growth Drivers:
  • Aspirational to luxury positioning.
  • Successful holiday campaigns and exclusive product offerings.
  • Expansion of luxury product categories like handbags.

Bluemercury

• Sales Performance:
  • Net sales increased by 3.2%.
  • Comparable sales rose by 3.3%.
• Growth Drivers:
  • Emphasis on self-care and unique skin and beauty products.
  • Introduction of new perfumes and gift sets from premium brands.

Private Brands

• Revamp and Growth:
  • Increased performance in private brands such as Charter Club and Style & Co..
  • Enhanced merchandise assortment and value offerings.
  • Focus on delivering compelling fashion and value across private labels.

Digital Channel

• Improving Metrics:
  • Enhanced digital experience leading to better traffic and conversion rates.
  • Increased customer satisfaction (CSAT) and Net Promoter Scores (NPS).
  • Transition of new digital customers to omni-channel shoppers.

Strategic Initiatives Impacting Performance

First 50 Expansion

• Pilot Success:
  • Positive performance in First 50 stores leading to plans for expansion.
  • Capital-light changes focusing on merchandising and customer experience.
• Future Plans:
  • Expansion of the First 50 program to additional stores in 2025 based on pilot learnings.

Store Optimization

• Closures and Monetization:
  • Closure of underperforming stores to strengthen the overall fleet.
  • Asset sale gains of approximately $275 million forecasted for the year.
• Fleet Strategy:
  • Targeting approximately 150 store closures over the next three years to achieve profitable growth.

Marketing and Customer Experience

• Enhanced Campaigns:
  • Engaging holiday campaigns and collaborations with influencers.
  • Leveraging the Macy's Thanksgiving Day Parade for brand visibility.
• Customer Engagement:
  • Improved in-store experiences and digital tools to enhance customer satisfaction.

Inventory and Supply Chain Management

• Efficiency Improvements:
  • Optimized cash flow through better inventory management.
  • Reduced fulfillment costs and improved speed of delivery.
• Future Outlook:
  • Continued focus on inventory control and supply chain optimization for sustained profitability.

Summary

Macy's Inc. has demonstrated consistent performance improvements in its First 50 stores, bolstered by strategic initiatives across its brands. While non-First 50 stores have faced challenges, the overall trend shows positive growth in key areas such as Bloomingdale's and Bluemercury. Strategic store optimizations and enhanced customer experience initiatives are paving the way for sustained profitable growth and expansion in 2025.