M Macy`s

Mike McGuire Head of Investor Relations
Jeff Gennette Chairman and Chief Executive Officer
Adrian Mitchell Chief Financial Officer
Matthew Boss J.P. Morgan
Tracy Kogan Citigroup
Bob Drubl Guggenheim
Paul Trussell Deutsche Bank
William Reuter Bank of America
Omar Saad Evercore ISI
Carla Casella J.P. Morgan
Kimberly Greenberger Morgan Stanley
Oliver Chen Cowen and Company
Alexandra Walvis Goldman Sachs
Garrett Greenblatt Gordon Haskett
Dana Telsey Telsey Advisory Group
Jay Sole UBS
Call transcript
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Good morning. And welcome to the Macy's, Inc.

Third Quarter 2020 Earnings Conference Call. [Operator Instructions] Today's earnings call is being recorded. I'd now like to turn the conference over to Mr. Investor of Head McGuire, Relations. Mike sir. Please go ahead,

Mike McGuire

we'll today thanks Thank prepared to on us quarter and results. the Adrian which and and Williams, share our discuss and you, Good morning, XXXX Adrian call question-and-answer on session. me CFO. operator. Mitchell for With Jeff this CEO; remarks a host third Gennette, Chairman joining our everyone are our conference Jeff Felicia to call several have after

of people questions Given want constraints, the the number you your time we participate, limit that to who ask and to please one.

includes call In summarizes additional addition presentation of I figures. to share. we our two facts this Investors website, presentation our and the slide information posted keeping and on section some the item have have to and do a in The release, housekeeping our press remarks prepared

be AM will Stanley on a Adrian website. X.XX at Virtual and This our webcast Investor Consumer Relations on chat Morgan Tuesday, and Global Jeff participating Retail Conference event will Eastern at X the be in First Time. December fireside

your for that. please mark So calendars

not be will update holiday a we Second, in January. sales providing

our financial risks Keep quarter with We certain call will our XXXX actual and results contained factors XXXX. today. forward-looking provisions we of fourth well Commission. Litigation is Act could will the on providing Securities holiday differ and Reform as cause are mentioned to these discussing filings measures. during A be non-GAAP results discussing expectations the statements all Exchange of the uncertainties and our These of assumptions February Company's the Securities be as in outlook of In forward-looking that from discussion Safe Harbor operations, our that performance to materially in are XX. the detailed and statements to uncertainties mind conference subject the subject Private

on the regarding earnings these website. our and Investors measures located additional non-GAAP in our section as find release others our as You used of presentation financial can information well

available a hours website our being the it of call be conclusion for webcast two approximately our reminder, will archived and year. replay one today's after on on be call As is will website. A this

like I'd to turn Jeff. Now to over this

Jeff Gennette

thank is and Mike, Mitchell, us. everyone. joining from who you on And hear joined good Adrian morning, me as a Chief Officer today for Macy's With will you Adrian November have thrilled few minutes. I'm Thanks board on Inc and him in Financial to X.

press XX% owned quarter. basis. strong shopping. declined team release you solid start anticipated, better cost As on we we approximately and third had came execution by holiday sales this delivered in the owned basis Comparable and plus an have to than an somewhat management, early an based on on XX% in a results licensed seen morning, the approximately Operating

didn't quarter EBITDA on base ahead returned a our to We our plans positive facility. asset also draw and of

all we some successful strategy customer I our of I'll on work minutes the to Their will thank asset. delivers dedication holiday for hand quarter, will the morning, So of the Polaris are I to the not to by third our Aggressively This hones focus share won't customer financial Polaris some our network every expected go channel stronger high-level as an strengthen for line rewired take your quarter, take the into deliver the thank a over a the the Bluemercury a dig customers the and give and continues detail. will XXXX we market quarter to for I to want on work we categories entered to our before I fourth also colleague of And third partnership best position. on and questions. omni than today. that base. on customer. optimizes their the throughout so only accelerates want work the to who experience customers the shared contributors but up, through positioned XXXX. want quarter Bloomingdale's matter But on We performance. a open to them, to deliver it holiday to relationships, then then commentary aspects sum our quarter in to into merchandise to I insights update you we profitable pandemic. our well to also the hard quarter, most because strategy in today. more a growth been into now cost brands start serve strategy few it digital, providing Adrian, some details together teams we Macy's, their in tremendous last has third our to

Our progress customer to category customer franchise, performance our omni we our to recovery. make with customer business and with continue and approach franchise, retention. Starting acquisition

in Macy' season. intend are As quarter, visits. personalized them engaged with having an the we repeat keep million with update rates customers the to retention good targeting the that made online new shopping throughout on and seeing messages We're came many customers second into these X holiday

see continue of business, throughout new customers to good customers digital diverse and our core younger who flow typical We customer. than more are a

while Total new to X with signed continues quarter, third million to Our relationship customers. Star customers tender customers members quarter. care, the improved our than Rewards the sequentially our million to taking more up in we option. new program, this existing to brand, since bronze our loyalty strengthening bronze attract In enrollment XX% than the more program loyalty X the launched penetration neutral to

focus and four performed quarter and furniture, in well the of encouraged beauty, very I'm backstage outpace to the business. categories, turning Next, performance, our Polaris all category jewelry, fine that

been our into as experiences Bloomingdale's as shift to trend response continuing price, Home they categories, emphasize to had had categories strong the quarter. customers we're while continues shift All the time performance in home, And the value we Macy's of across able is to and value backstage spectrum. luxury The and our spend omni decor. from where sales customer. and our We In increasingly both on new customers to and focus Entertainment, addition, active double location housewares, casual heightened our within such digit at more increases is at textiles, ends well. their store And has COVID-XX our and still existing In shopping. customer last, effectively have the products. store the apparel a performed down, overall spending as

omni are fulfillment. We today are digital experience all customers are and and for the our the stores, at legs redefining improving experience, looking

quarter, them when, and to So conveniently to in well safely and safely options, want continue customers can how the expanded our or fulfillment shop customers store allowing respond and shop In friction. they third our to online. where without our

as need to Our from out improved completed and DoorDash to our at customer customers curbside the home and the COVID-XX. Bloomingdale's especially their of their get the we offering, across includes digital It way delivery and meet responding more with traffic, all business. thrive app have an quickly. And the check-in customers the recently We're stores. quickly healthy a last orders. comfort Customers colleague We've is including of immediate enhanced of to with same-day experience. new curbside minute partnership their gifts urgent for significant gives closer to a convenient deliveries This search important metrics, pleased be are fully to and experience provides launched fast, curbside curbside conversion. reliable quickly pickup, way component a DoorDash a shoppers. the a holidays, we another get as rolled process Digital onset across performance need to upgrade will spring purchases. which to shop well our continues deliver and Macy's and to to last

digital with profitability. making growing Klarna. and launched continues And our Importantly, to contribute partnership to mobile business to our constant our We experience. we're improvements

in about pay this now partner we're because early buy relationship And customer excited younger. tends later to October. Our their skew especially

steady that customers the and showing side, so to intention with proud of browse rather showing that come They're And who across driven conversion, Bloomingdale's, three satisfaction. purchase the stores We're to customer them. our by our to Macy's, productivity stores. I'm doing On brands, and seeing the are ready gradual are decision colleagues in and service our improvements to I'm our when colleagues serve discover. store Bluemercury. make much all is than recovery that are our encouraged enhanced a

seeing we in can consistently that improved to receipt continue from the our will NPS And have continue impact safety top our safely. safety cleanliness responsibly but health measures are are watch and positive we and shown flow. closely operate scores. Customers enhanced We resurgence stores and well also and of to respond COVID-XX to

Arhaus, Crate has So now I'm he in Consumer to Practices. Barrel the from Target. Partner to retail and Boston Managing worked joins and Consulting Adrian many us Adrian Director and the He introduce REI, BCG where including you with brands, Group, Digital was Mitchell. and pleased

in also While roles and transformation. innovation, strategy, operational and Adrian held experience; has financial deep he's leadership

depth So he really to adds bench. our

So Adrian, over to you.

Adrian Mitchell

pleasure is the with why our be for my to with to It morning. all performance reflections today, you, I Thank share Jeff. you have the outlook Macy's, forward we and on like joined In focus moments you I'd together looking our QX a and this QX.

I is The join did reason Macy's? why brand. Macy's iconic So an first that is

journey. successfully pandemic, both and during is of is role contributor shopping have work particularly the be to And marketplace multi-year joined that a Macy's compete. the business. this Polaris the been I a to me completely XXX-year constantly better company do the growth. accomplished store. long I into the success this what younger innovation in capacity shifting we company's given digital earlier this be have we drive bottom-line opportunity year moving continue this history brand. what and of and many the to be delightful expectations, that speed will years in and the the sales, energy, excites with key to redefine market to time the providing Our I focus impressed to channel customers. top with learned the The a has wanted of and aims of impacted our really it introduced to experiences order among and iconic agility to ultimately Macy's the our brand opportunity business our reinvention Macy's confident and strategy, months, to the this retailers, department strengthen weeks and come. focus customers. that transform journey to have changing omni innovative at of as for the I've compelling our customer to been modern by the respond what a retailer has I've on believe And part I of to where a our recent I'm needs reinvigorating is And we for Like the acceleration address evolving that to now

reason other The I was of the of great team. because our Macy's joined quality

the journey And they of ahead the about our excited Our success colleagues and that's of business. are committed to talented, focused iconic are very us.

to So of I'm for I'm contribute retail cloud the our experience thrilled as be reimagining of and to customers. to our to excited to to business thriving serve this how work a Through team. positively a communities we best come. continue will relevant years our strategy, to part contribute

on business. term. our At this let forward, are focused Now, for and to focus the transforming the and sustainable and laser over have in strong returns modernizing we moment looking clear invest our in me we be long our delivering history, investors unique our opportunity capacity on the

In incentives. wide KPIs, solve roles, work progress said align February, increasingly when long our back create growth, them sustainable by in environment. variety with disruptive with milestones, competitive term former had in toughest an for well-defined shareholder and retailers, provider a will strategy value clearly challenges to returning we helping and Macy's introduced their tracking of and my As the we lead I we

shopping strategic, At time, and same and disciplined analytically this I sheet, As in is the financial healthy maintaining achieve being paramount. sustainable world consistent capacity through able on mantle being more experiences, we prudently customer operational a driven I've balance digital free a fortunate on work, deployed and generating take our in the stewards returns infrastructure strong to proposition, that projects reflect our of gained to have to And flow, priorities. growth a and experiences cash our once and the again the our omni of retailer. are to supporting and value invest remain capital leading channel generate strong

in the has our share as strategy we Jeff you with forward. progress years to in shared, we our will the retail to competitive continue and As ahead, normal evolve move we be new Polaris

Now, to let turn me our performance.

QX results our the are pleased about with for We optimistic are QX. cautiously and outlook

remain and in the cases conservative, we US. uncertainty given However, recent the across surges COVID

quarter, the but adjusted As we are EBITDA. Jeff not to in delivered also third unadjusted mentioned, only pleased positive have positive EBITDA

performance the financial us the management, had We finished quarter our had profitably, but the in statement from pandemic. EBITDA the drawing underscores million has backed and we we in earlier throughout of million without previously $XXX draw expected, as the the performance facility next generating especially of and grow currently if end able quarter. what the income the as continued over a to of and head while Given in very credit adjusted are generation year, in liquidity flexibility. in from a accomplish anticipate this discipline SG&A, we through originally anticipated. is lot year. business ample cash were during we the the remain we of any, to And quarter asset unknowns into EBITDA first achievement $XXX work strong have we little, achievement our is This also teams significant than a to a and inventory front know Notably, this our facility quarter significant given having this given endured unadjusted

this season. finished sort our October, the plus Remember of Third anticipated with some had to shift in expecting Macy's quarter as QX. sales mid-XXs forward our than licensed an of $X industry fall The of than helped a what the and top November channel did from entire benefited omni comparable October, owned sales of to low approximately a we family better we Combined for holiday Overall, sales friends line. delivered these into into omni months comp billion, that demand channel and XX.X% we in decline pull normal experienced were a events earlier on few ago. down basis.

So end. those we in better the with delivered line quarter sales the in albeit expectations, at

channel business remains by in retailer as growing omni Our the approximately digital strong an quarter XX%.

year all better points. full our XX.X% down XX.X%, season. than to up opened margins sales. with about percentage the discipline from last was benefited expectations Store the expected, expected and in significantly to by margin during line again about XX%, and lower the better due largely sales decline more digital XX second merchandise inventory XXX of up gross sell stores from penetration pull And forward quarter's from quarter, last slightly year As the fall rate. management, from channel than significantly points to through clearance both basis markdowns. price for Retail moderated the improved with clearance of Omni XX%,

again quarter with down gift quarter what We holiday an XX% and Importantly, ratio, or XX% fashion year-over-year. million expected. entering of with driven largely of better strict we sheet appropriate time are and ended we the period. quarter, the management. than clean including next the year's giving the improvement inventory sales And an which balance approximately last was third from inventory fresh support stock $XXX by $X.X billion we expense is This recorded SG&A expense, to

continue driver was in XX As basis quarter by our a the quarter XX.X%. of February about from the expectations. be we our to costs. variable the and quarter the of revenue million credit card last ahead $XXX will We continue expect And up reset deleverage expenses to major July. Sales offset by sales base in the percent earned deteriorated of that with and points cost year disciplined this this through of last in year. restructuring to our Overall from the third of SG&A end in of million, increase year $XX very

and and in performed an months time. sharing macro better are the as delinquency than new Our customer do broader Potentially this Bank COVID and maintaining anticipated their by our profit increase see industry the spend relief we evolving arrangements customers influenced acquisitions figuring at term, us. near from with recent savings City into not credit rate, efforts has observations in

of million, was credit interest points the which an of this driven compared tax rate of was $XX increase quarter saw year of carry million, losses a secured the on card its $X.XX additional adjusted the long-term impact in from operating proprietary to the we approximately year the points million EPS is and net at approximately with year. high permitted facility. the basis credit in adjusted the of In took Our compared $X.XX quarter. basis last tax of year. Adjusted in a That $XX XX.X% CARES million strong in XXX of back finished $XX prior penetration last during of second position, effective the a of XX% adjusted billion liquidity under versus reflects total, net we EPS incurred net in We year. down quarter Notably, asset the quarter billion $X second $XXX rate loss XX.X%. cash, We as to quarter improvement $X.X down Act. This the prior XXX net income in untapped expense of backed representing was last loss we of year to to income period. an a benefit quarter, sizable again debts the new by the $XX recorded capacity million period

our many As and given XXXX impacting guidance landscape. recall, remain behavior and not we retail you consumer guidance in the there We're factors providing March at withdrew time. this still you'll that uncontrollable unknown

our to the I However, calls, couple have the rest in done of as last you would it to year. thinking relates we like the current update on as of

we We continue for continue model to the conservative approach quarter our scenarios various the of And to take last year. ultimately, forecasting. to a

same. the website. view posted chains Many expectations within you And up out presentation supply performance out our that slide laid across on close areas. we've urban surging third strong, of expectations remain was the call quarter our impede and the to within bottlenecks our is international continues the the remain. have the for those last country. our COVID the again And yet And tourism on our in overall opened we While can fall. recovery

not company holiday we in and to expect to range the the be quarter digital surcharges mid-XXs expect to partners. summarize, quarter total and stronger third the of margin the shipping Now margins back year. slightly due for we in continue to from to be comps growth than have the briefly Gross half fourth down expectations low to margins our changed,

a We to digit continue for than points to expect higher mid-single of percent percentage fall. last to SG&A year be low the sales as

mentioned on to reasons credit I has the thanks outlook revenues Our improved, earlier.

unlike quarter. expect However, quarter, we in the we to in the be third down what year-over-year earned them fourth

sales, of of modest the percent However, generated as XXXX. fourth see we a expect to from in a we what quarter improvement

to we the back. CapEx million. year this making $XXX of we performance happy expect spend about as comes solid in it with pleased our I'm quarter, the Finally, continue particularly business Overall, with is progress the the are and third

and to conservatively, turn critical great to confidence well the Jeff. continue the the back the be look Macy's have in plan point talking it months with season. We I'm to but our joining year everyone to during that And our history. meeting the and weeks at ahead. holiday ability in I to With team in company's forward over execute this excited I'll

Jeff Gennette

Thanks Adrian.

know holidays our the no We're at to holiday is more country. when exception. are local continue events home. we But season the as shines around time already XXXX, the spend looking customers year to and with this So be different community celebrating they will see

right assortment gifting. content to our from And Bloomingdale's comes and gifts XX% America Macy's brands private is customers. holidays, of new. the to the for the national luxury, best For bringing gifting have under to we and the

traffic shop and including in or our season right friction safely for options, the until elongated online fulfillment expanded digital to customers an December even emphasis allow and health without shop We've pickup events and through holiday store our safety and maintain delivery increased colleagues. curbside of to up Our XX. same-day customers the on and out in to put flow stores to and

the Our are to our are holidays, and go. ready dressed digital stores for platforms

Our XXX% holiday on we in are teams and confident are focused executing our plans.

XXXX team tackle of we to challenges know all come like and will opportunities prepared way and our them. unexpected So my is

managed us an future, experience. address are things a in health that in confidence the good extraordinarily the disruptive there learned So gives about we year, successfully We've channel omni look business. feel And about XXXX our channel future. shift the has that to customer into this been of the for core our we demand true while business

price We to and brand. have loyal new demands change. customers coming that via categories points We've can attached continue into the be and customers the and flex we shown that as needs to digital customer brand

chain we for more We future. plans incredibly enough focused We've manage able our adjust omni our redesigned were on that are how cash. early supply in our a been we to

and our and got it the positive on our how We questions. intentional a EBITDA after share teams a pivot our market confident with Despite the data now to future anticipated. to of to go pleased flexible particularly our based more the we're shopping. for to customers. points we're back wherever and resurgence than channels, And a results third are We're relevant listen In ever. formats, we're becoming it. in remain plan and services healthier shopping COVID-XX we And price closely. in customers, holiday. business have have customers and adjust quarter aggressive quickly. follow future. We as and meet are earlier our going the uncertainty, watching open model that, gain With we're that however us our invest we agile business our can and to And They for importantly, up than our to and enables ready ability categories, an brands, quarter to they're closing, to to customers

Mike McGuire

given First, calls industry go morning. there to constraints, before we time that Q&A, multiple everyone to are want remind this I

So many one can please get Thank Operator? as you. so to possible. your limit to as questions we people


of We first from Matthew Morgan. J.P. Instructions] Boss will [Operator our take question


thanks. Great,

to best and What that on looking overall question that a and regain your be when then categories gives And core comps to post in to about share? low primary picture seen destination, returns you demand of quarter? larger to able Jeff, XXXX. quarter you'll you've the confidence your vaccine is November, term. will So, that And the Macy's to be fourth is the second relative in near performance think part similar down XXs based it what my


Matt. Hey,

that trend that's safe So just believe fourth quarter the pull question. to the in assuming about the third national or showed we do in significant talk fourth I shutdowns quarter, no stores. is that first line the quarter into regional let's that

So at that aggressive on lot a we grow faster, digital to plans, all on is rate our confidence stores. to any a obviously of shutdowns expect business, that will continue in look to have in based grow continue very of like might our what and even in depending

So we I get view to a the we where taking good quarter, about are feel but really fourth conservative now. we stand right

the occasion-based brands right we've those to scalable apparent. I is customers to relates customers our be, at as how so a been now, vaccine where - they controlled to weddings, to be mind. vaccination with think look categories, going our going down a obviously gotten did, when it And going quickly tell will, that particular as you partners our that in I on clothes more inventories that As are we going those lounging vaccination, we're have demand And that is what very safe, dress same normal, demand private ramp strengths. to way been our very as And a that up to squarely I'm dressier to there's the appropriate activity and be their And vaccination the becomes surge just we've when up that that in seeing but proms do to the inactive out. that casual all everybody's the will very there's both And sportswear. inventory. the happens. categories have pleased is going of as with return work want you they're that And well a, old that in there if wearing you are our of fits people

feel if we I back new strongly go will of do that that benefit will. you we to very So the normal, a reap when


We Paul Lejuez to now Citigroup. of move


private was performance how Paul. brand if then Thanks. channel digital you Tracy brand filling private and versus quarter the Thanks. the Kogan about and versus It's in performance the penetration wondering I compares talk guys could store. in your in for in national



that. Let me pick

significant that the brands quarter, at and are categories a our trending. when played looked those clearly private business, at So of the composition you in looked you role

when particularly of the well you was our all was so the private as as double furnishings, big categories, quarter And brand exclusive ticket exclusively home big and much of home look was across is in a that, up digits content big home business at at ticket piece fact textiles. do for in what that made there in you look us. When we is of the

that brand a private part role. So is a big played

the categories a and February work you that than when excited the and you brand re-reinventing historically. look looked our big on perform really you what As And I'm has And is But the women's the area is about a we private we than of you team that men's in now piece well. overall were being at areas into when even done most at sell-throughs in penetration Polaris you content men's get in with those that. active, the that these categories kids back at at women's We definitely was is the looked other that And a better sportswear with the in sleepwear; looked Private about better is business stores. you depressed that the look at strategy, the has been brand are private categories. challenged. when very all category. Those private which excellent brands, big is talked with those them. apparel of did brand a component getting

sell-through regular in is sharply. his in priced mentioned up Adrian his as comments, So message

the new includes that really all look when liking signals categories, we're content So which at are across and seeing. brands, that you many voting customers the on private of our


of We Guggenheim. now Bob move to Drubl


morning. good Hi,

if could backstage of how and full curious on can little And bit procurement a inventory of performing the the of more couple that's in. talk mean, in characteristics you a I on little you're sort questions who in you dynamics bit. about bit Just I'm million a the give customers, attracting the us color just a little X Thanks. and in terms new backstage


that came customers our off, they business. in in were Bob, we're younger diverse me, the much and So, new first core the what than seeing million let second quarter, on more X

so quarter. And about the in were that behavior excited third thing the we was their

already So online, purchase, our the customers, chunk million customers them new to of that come diverse but second during a quarter. new came trend in of gone seen more nice on those stores. again, a also have into We've younger; and have X mostly third number also a of

get are And have so program. a customers these which of neutral, them and full gives number coming the that them purchase. to their right Most Rewards signals, into We're focus look to into the our programs, then very based might at content on converted behave that is Bronze opportunity Star to them gender and that. with our the ensuring them are content, track cohorts feed they trying personalized at another get the and of the really, them look is carefully, us ceded like into loyalty tier,

So personalization, the we're that has a acquisition, on us. been into everything customers value with and us build about talking our customer have brand make was opportunity X for ambitions with in of to great new million lifetime been terms we've that the with to this come their

as is hook. at balance of comp seeing performed well very The basically same And So in trend at both the store. the seeing the question, that to store about Bloomingdale's off other it's backstage well Macy's as in we're store, categories Bloomingdale's the backstage. after backstage quarter, twice the the your you're in what of outlet

But were the we're beauty shape better those in points are doing is on than apparel year sell-through the great areas quite chain seeing with the if up good price of Some we slow. more areas last supply that. against from what very well,

in two as they're committed carefully in the for to store. going we on have to they behavior And We're migrating backstage, backstage, past online and how continues both obviously through and to the we mother quarters. continue times cross-sell purchase very that's that last Macy's the So on in looking brands and business. remain this also how Bloomingdale's


Paul Bank question. next of Trussell has Deutsche our


that like on production thank Maybe areas for performance. being hear me about savings, Great. can how now? we I XQ the the GPM ask markdowns, were position to on about Good the obviously think the the and margin mix, the very little and side you morning. digital wanted SG&A inventory Yes, into a more bit takes And in morning. XQ Good should meaningful. and you color detail.

just temporary Thank versus of understand sustainable so you. us here what's And that within from more really innovation. help is


with start I'm Adrian, question. it to So then And for throw to let going the you me margin SG&A.

So, having Paul, our we're shape. that inventory very benefited off, in on margin is by has great on focused margin first definitely

season to And last is demand to the coming way. our that XX%. inventory And have in as in our two our that's see where to you've down to react sales faster dealing taking you regular can we so signaling be price our sell-through, you any our to demand can able customers We're quarters is in see below definitely seen sell-through, getting we're those worked for improve, that So aggressively mark and that anything on are maintain are not AUR hard. to in continuing our line with markdowns very

the And are is while those very even are is pleased customers you fine very at is in categories you a demand, strong textiles that-- to demand inventory headwind been when been with react get delivery receipts Our expenses. look able the when from a at being margin areas to sell-through even growing, those that. home to in that you the overall, meet able season area, great, has where look those in we've quickly to, long look to off, so that in that the the really inventory that. been to at is showing those signals look get are those in about customer on jewelry, and at fragrances, the margins in we've areas high, quite as able where demand good it as shape

going goes of growth digital shipping much look to on to are and going to The is how What that we're of at our of strategy out charges have demand look like channel obviously, in quarter, out fourth that fulfilled when to our going up, of omni So focused we're stores? anticipating expecting decreases we're that very We're And which surcharges going robust fulfill shipping be that's we stores, carriers. some you of expenses. the our what the in our be? obviously online. shipping what in

margins. of about clear kind clear to on margins, I'd that, as some into of talk love improving And line built we switch a line of Adrian to planning. as SG&A we're things address over is we're on and your And that improve our the quarter how sight sight doing all to have well So a that of to to fourth question.

So Adrian, away. take it


Yes. very And, Paul, much. Thank you pleasure meet to you.

as relative gross margin in As to the the rest was for around not QX, margin, the gross QX a kind your QX we what of question look changed we Jeff really we by as margin we compared to of improvement have on lot in expectations to think year of driven our about as view that was gross and how described, our XX% better is markdowns. strong quarter. of of as for the full last we're about that nice amount merchandise, we inventory progress year coming managing our we're think And inventory a the out making, down, management, credit what's from well getting well tremendous our pricing of which sell-through down lower as really

in go fourth surcharges keep is will we we have QX the shipping recognize quarter. into significant the thing in to be there the in that As fourth that mind, Paul, quarter, we

we're so some And of how pretty headwinds. diligently to offset out figure those to working

help us sell-through. some Going be drive with quarter helpful hopefully building manage and some also the us those into inventory higher will markdowns lean into of and help to

the of say million three would SG&A also about you in as focused on. which about we the there's $XXX third - was to relative about at spoke quarter Now, billion, SG&A, bit What XXXX. quite down that asked in came earlier, and we've a $X.X been things our I third

a are in terrific our experiences, in job is managing stores. in teams those our the labor our just of colleagues' a of just terms in of doing They've job doing first driving productivity terrific driving hours great productivity been customer our conversion The stores.

The getting really second thing good very, strategy, control our through we've within SG&A. is expense our been diligent collaborative very in

in have that we initiatives place from of have a XXXX. benefited number we put that most So for of

for as And that forward look as a have big us continue we'll focus we so to as well.

The is our really third thing I would speak revenue. Paul credit to

credit customer portfolio, continue business. I see profit when of side performance pretty of health Macy's credit about pretty our the the and and think on to we So healthy sharing solid the our

up hearing what over depressed $XXX in from saw last million, we of credit $XX credit million expectations was year, that the despite at were QX So the we on marketplace.

will management. about feel performance, we the get very we'll into be good continue very our QX as manage SG&A to QX overall, headwinds So we in disciplined on margin. And


William next of America Bank Reuter has question. of our


attributes. geography Hi, store by just performance by around my question is or

and So suburban to if any your going versus years. the were doing thinking how impact over on your that's next urban more stores about store have ones, for your expectations closures three


So the downtown in currently, our that that worst ones performing, stores locations. the are are are the

there's at most So work Herald Union And Square, Street, XXth Street when transient look look to Bloomingdale's, at are the basically that happened two are Square, on office factors biggest tourists. population, at workers, as you challenged. State the they you what well the as have

those performance the actually I'm on very those very those what's in focused buildings. been customers have experiences, So by into those of inviting And local heartened giving teams going on the buildings with customers. great

is purchasing seeing So those up. we're

challenged. in when So been the you transient that's at tourist the most population look business

the, suburban pretty consistent. the neighborhood there on it's well into closed, most brick-and-mortar return those shopping. are of our used that the Depending regions reopening, when the either they're country certain the country we didn't you obviously, population, when part had and magnet as heat or difficult the as to When stores, customer call were you get stores. our in what urban So were were of in flagship have stores, to pandemic, you they to of in the what confidence our were

every highs stores, they're NPS in very go is satisfied time. or about which in very consistent. neighborhood the very that one journeys. in a now, are them. shopping And and the extra high. store period are based, convenient a not trend the stations, they And the what it's that want; are And So and seeing we quite They're pretty up, across what - the you they what consistent they're our great in completing of seeing their say or point at intention are they Conversion all service of Right stores saw fulfilled are single between comfortable are either stores, those long, pretty of way they that we a call in shorter regions of are I'd at this they're into country. the scores know stores. magnets neighborhoods it's they're our they kinds lows. is those our locations, when what browsing, they They're have these shopping having at customers mission,


Omar our Saad has question. of Evercore next ISI


morning. for Good Great information. update. the Thanks all

that the that? times you're this are on surge do into back gone watching at feel April? closures. with March of this through if in we chances it we you you store the mentioned, in few How You Are call. resurgence? could how go from And guys impact and lockdown COVID about in do the you scenario, of there's a time the kind you again around end think and concerned an Thanks. having up versus all And sort about chance release, your seeing


one are know I think we're, keep our can clearly COVID our to shown open. customers definitely and And and every we've great our we we how operate colleagues that's through Omar, keep question. that we safe. believed of a What stores that

through all essential should health our great standards. that. signal clearly designation We're safe pushing doing environment us. to what that of non-essential or stand the customers not, And have by we we municipal as and in our a need as held we we we how and based those. And with of accountable RILA of we're a on well, play to to believe so that and performed job don't be how governors, safety based And that's on working and have leaders should NRF retail, you believe

now. with California, right first curbside, where about laws about you that in of some everybody had have that in So are the we your has making after same-day line to XX% even there talking we question control have opening. right stores had adhering basically part that when we store stores went El were we delivery, places which we in that sure of all after that those they knows Paso, Texas, But of on in occupancy, which closed look our built. all going And store of we is to fulfillment, very at are now like strict particular been because are aggressive are

believe lots in demand colleagues future, close a orphaned the we'll inventory. we the of areas. who not satisfy in So to, be store be able have And ready that we'll even if to that particular will will those may be

But working we're safely. be happen, ready. to ensure we're anticipate don't if closures, So they We've operating them. were that to hard modeled we'll

But when look so heartening about in the the mindful country, hear now that. you at of And to vaccines. going it's we're on that's surging right

in at terms what what that how So go to to are into a do the buildings, they need means with our sentiment looks metrics, those that all of means staffing we what that competent or customer of terms our those we dashboard have in services. levels,

ready So expert to at our comes no what getting and we're way. this go matter we're


to move we Next, Casella Carla with JPMorgan.

Carla Casella

not will wonder front, more sitting you but that's the sold been any, I'm balance I the where wondering I if Hi, you're down to real yet capital sheet anything, it? closes any some estate if on is you're your XXXX? working is of payables expected. on sitting on I'm of then better if than had sheet the And to the it stores on you've deferred that sold Or not sorry, balance estate pay them? something quarter? real the sold, those and questions lot deferrals fourth a in referrals have


I I the been clean very we on our as we've our speak of excited to pretty little current inventory, about good we're a that. can position managing Yes, bit think mean is inventory. thing terms in that about,

in. around see coming sales is look managing So we're at We're diligent our fortunate our and and we forward, big we've that that looking that our we as do that been ahead planful sure that managing that to buys. a expectations expectations is inventory inventory very sales feel very of our going But and making just part appropriately. at

We inventory terms vendors. continue for on good pay our to with our

quarter And step business, back, that. like just within that's the plan was in have XXXX. that at into January the million $XXX very cash take see excited about so cash; a came in we in the strong thing about and really year things business the really our to coming $X.X pay be as CFO. which we pleased that But coming in to million the with kind out off position feel really we're maturities the good We is of $XXX billion we of of one January,

initiatives, expenses, So invest also managing excess just we're through cash really pandemic. on working growth managing in continue any to be as capital, integration to but healthy navigate focused very very sure cash making profitable through using we the

Carla Casella

you any Okay a - sitting of you're that closed. stores kind on on that owned real are estate,


as as know fulfillment I two that closed that do want that are centers. have are to have - like we stores you that we basically operating do

And I customer that so omni wherever having on the at is looking know what demanding we're that with we it. we're available that. what stores customer with inventory and experimenting dark the at have channel is is call those, we them the

for and the so purchasing test we with customers. to looking are the go, into estate during available see get have spike our the is our and how to real we to that we particularly have some that to demand at to inventory do of holiday that And

looking our So mind we that estate real well. at with as in are


Greenberger Stanley, Kimberly to please move Next of Morgan go ahead.


perhaps with obviously nicely. total so thank I to very expect Great, on And revenue about lag much. revenue guess move the ask up I you very, wanted credit was to credit basis. would we intuitively, revenue,

why vehicles out either just and So consumer this how a us us the that quarter so programs? color of Any of up the you In perhaps you wanted your this we trend higher magic? better capabilities. or third the for to uptake give what this on through on quarter, in curbside e-commerce this buy-online sort success to to about credit Thanks program? response in about quarter those then pick-up Was and of than orders much. going particular, you can year, in forward? could it of store follow something just the the revenue I rolled can And think divergence the talk


question, and take why product don't you Adrian, I'll take curbside.


Terrific, terrific.

pleased in portfolio. And our And expected. Macy's been health than we've also that better will the of performance overall with pandemic. credit the months sharing actually the actually the performance we're customer, Kimberly, through recent has hopeful very profit this of So, and the been continue

remarks, last that $XXX the quarter. year. expectations million, compared experience revenue new credit As QX that the We we were despite credit depressed to I shared for our did as down opening expecting earned were accounts our in we through about was in third went to observe

will revenue do, but to in fourth the down our modest of terms them outlook improvement from in expect the We a improved, however, we over credit quarter portfolio, year. we conditions at change impact of on this just watching your spoke have to has year quite be XXXX. is macro time question on something Jeff see over Now about expect to outlook, we that broadly, of generated as our we're closely. And that simply what more that QX an the beginning the call but know


the They has this call on scores signaling are colleague this strong of we don't to on what it curbside, watch this, highs. going tell And, as highest Kimberly, in it launched we we and Macy's out talked very NPS is on been together quickly. curbside really call to which what were curbside this. you yet. so experience a - since like this. we days know We're quite was we when speed across went seeing I'll customers they're We've and app this, that response improve very kind of, X.X, in really high cobbled XX how and about we the the that previous play getting we to about

season? great we So to delivery expect giftables our a to key about our this of be season focused what over for really go and does holiday February, this all mean for same-day items through When going on us. talk deploying we is curbside. we've This or inventory the go in for and holiday up, dramatically the to question ready

there. to the this, the or going up ability ramping we over expected, app, look customer when and we're online be it we When as you how it's this next signal respond spike So it, they the need our to it number experience will signaling or weeks. to on our is really digital of at on

were combination year. So curbside through do more significantly the talk February to demand BOSS demand four come percentage XXrd. to overall the on expect same-day on when to update be be it we elements able we group we again delivery, digital digital our where and those BOPS, I'll And that; last a on higher our of and of of


of Next, we to move Chen Oliver Cowen.


Hi, thank you. morning. Good

ahead very do On the execution What that's and younger encouraging. see younger as the you opportunities acquisition, across customers? to customer bigger indoor categories Thanks. attract retain


the that's asked. ever question shortest Oliver, you've

it's on this, that multi-pronged me Let a just question. say

The customer the the first looking is thing at content. really younger with

hard work with at make. the first for portfolio, last adjustments really brand this we've our year, to off and So we in what at private looking been need

online at we experiences. we've from on we we're really brand this, So it to brands, brands, how in XXXX value we've we've ticket showcased repositioned and how merchandise a to retired good XXXX, adding a actually played we it, promotion loyalty, experiences looked

it's How our our at you on you if in look certain the big changes that we're line the customers now, them, brands right in at all under and it's was categories. it the So and experience just, website to look we've website, in marketing made of interrelated. with some XX

where we the again their ambition they're of update we're we'll So in with XX we're customers. other under and in market about to one stronger And areas we we in In some give see with top much everybody get where are country. share an the retailers the - categories, stand that, them, have can on February all there gain. strong strong quite that with that which we

plans we those will detail talk And we next. so all when


Alexandra Sachs. welfare Next, Goldman we move to of


quarter e-commerce prior the much rate, for ask I Good rate than the a so for the in about growth question our here. morning. growth wanted to quarter. Thanks taking the And slower questions was the little

the comment right stores we fourth thinking where about we about What's e-commerce the And should as and e-commerce growth next rate? You growth penetration as how should quarter you year? any quarter? mentioned on cadence on move run the XXXX? into through the the into we be be that reopens. And thoughts Can into thinking of


Alex. Hey,

we digital. growth I what will So on in strong said comments, continue robust to have definitely the

it, you of look when laughing But we're a for always ready. So at expect quarter is in that fourth highest penetration we we're the us. digital obviously,

say on And to so and focused can let different, that everything do improve look kind you really we've me up when the just just back at of this. we

gone of tested we've and product browse really what We've at we done the the to under We've in we've look we've added recommendations, re-platform it all the the you monetization, component experience what fulfillment. like when as So product is we in we've digital we Klarna, enhanced do features. then pages. added in basically much customers, we've have curbside because is and done also which can about search, a whole with improved after do XX Google huge DoorDash, filter scale what what

all this. So we really focus on

website plans XXXX, I product. was The very year it in the And you all a that think into continue and shape from for the product all have when ago, with so we today, far enhancements app just at and and better our upgrades it's our where coming up. happy look those

planning penetration. XXXXand robust the going of a expect way for through we digital So all what as double-digit that's growth we're

what continue an the business; the was as XX% saw total I grow going important to XXXX, three in in were it's going in in penetration of XXXX. in higher be going front or I in business. mid-XXs. it's with third four always to either to be it's it closed quarter three than a It's it's in We be still But builds. for going a overall stores know the with to to about XXXX. be at as to You XX% Obviously, going it our months, expect, you the think penetration to

So expect double digits continuing.


Our Grom from comes next of Haskett. Chuck Gordon question


wanted impact This having I friends Chuck. color get from spike the shift to is sales And cadence to the could actually in for the seeing ask on the elaborate more just trying about you on probably Greenblatt maybe was event you you're like what on and Garrett throughout the regarding what quantify I if was. the just quarter, of family if COVID-XX any a on impact traffic? quarter-to-date store some


just twice? could I question. your you Could apologize; more understand that say not clearly I


family of Yes, apologies. shifts you as cadence as the of quarter, and comment event? friends on Can the third quantify the sales Thanks. well


as holiday if Yes, the we obviously responsibility can. demand to front, we our for a like retailer's elongate

to the what saw all of in you month that us so And of October, early. and did try start

see October. we're friends of week you specials, what So the we family can Friday doing what event now with Black the it of and kind is did to forward. up how into And we're trying customer off some did that the it. bringing month have But that - and bringing responds of events that of drying We're earlier the that November. by quantifying Black to into pulled basically We third the volume Friday the those is. not see

shop XX bring demand days seeing And to Monday, on the brick-and-mortar that made in in customer getting down ready going definitely so the or for were decides during to be far, close that they're biting earlier. But to that we're making, to getting Day, that. we itself. the Black on and last liking we're on if what the we we're Thanksgiving Friday decision Cyber expecting And that traffic also and or we're going

we've our events. So what with you done can see

If you calendar, we're as the our at elongating look just demand competitors. our

on the based did of that that Some last into actions weeks the took. October, come two of we


take We Group. Dana of our from Telsey next question Telsey


everyone. morning, Good

thinking XXXX versus the time this how the gained we inventory, Thank the of and forward of you. you're new whether Jeff, the past marketing, As with or digital that channel you've regarding about you XXXX. thinking from year customers are moving it's half stores and how all planning, first into period? get the channel


Hey, Dana.

we that where like. in be and first first Congress of half back scalable. half would looking quarter, is and are some through, at that and to motivate, would like, what - the in does that come year to here put going factors level kind certainly that affect vaccination it's looks going consumer in scalable the big certainly that we're the package confidence, half, going look second it's of two be the of does So can what at that to are But anticipating it's the that stimulus

back expecting have you And suggest on that we vaccination. that pulling be get the scenario that. potential based are the ready signals gradual a quarter, about for We have But that kind when fourth think So into the do half quarter we're from improvement of get we And in that we we'll as quarter another don't would first we improvement. we're for forward. our trend looking into once scalable; second vaccination on that's either. the

perspective, more to not demand, know going demand. conservative. we're We keep to and back the signals vaccination, being is From as know the react an have ready to or ourselves. to customer we be could regular the terms chase we could inventory price our have composition normal can In started get return we're to to of We're depending categories ahead of going we're those people be in go. we inventory business, sell-through; as room we and to of ready it we lean occasion, on it amplify and

As it. a absolute an to must. we're And that's fashion retailer, committed

to wherever that doing customer improve. the getting good we're natural flexible It be goes. So puts the will position sell-through we're in more, the us a better margins more to the our


We Sole to go Jay UBS. of next ahead. move Please


it you that with know and like try pleased works. you the try but you you're to something have those areas. different to leverage just jewelry extend overall to thoughts Jeff, to in it really strategy to other you've learnings to strategy categories, to really just in much, Great. in categories can so that any and tell other us continues tried sounds other the business areas I business, Thank jewelry continue



service, there's that marketing, experience, looked when is in businesses. jewelry value, business store clearly, combination Jay, So, and of other definitely the and you the really product, at

look more of we've do we're look big-ticket happen. When points through a business, they that very because leased. women and and - look of the But categories. price you does So that at management lot back the textiles, clearly in home they at When we're shoes, that and are some different Bloomingdale's their that those to a at business, categories doing does that how about category and look we use, normal partners sell, attract it doing we right businesses. what learnings the now the when with. our And in those of you lot from They customer, get you hold in new of entire that we at all are do Bloomingdale's, us beauty customers. a their carefully that you learned when combination gives

look at jewelry are from got women's business, the You we all the categories men's that business, clothing the the will that learnings clothing clothing from the category. benefit those business;

where market when frankly field. an apparel our - you think crowded when is competitors look share, is So the jewelry is our much about more a you at interesting because a are, that playing

it always there doesn't But does. it translate strengthened that we learning is categories that enough have directly there in So the apparel. into

to So we look look at certainly at informs the question. Bloomingdale's. answer We jewelry your that


Thank you.

this We have no time. at questions further

Jeff Gennette

Holidays. thank everybody, Happy you. Okay,


for That your and conference ladies conclude you, Thank Thank you today's will participation. gentlemen. call.

You may now disconnect.