MACY'S, INC. 2023
Annual Report
ABOUT MACY'S, INC.
Macy's, Inc. (NYSE: M) is a trusted source for quality brands through our iconic nameplates - Macy's, Bloomingdale's and Bluemercury. Headquartered in New York City, our comprehensive digital and nationwide footprint empowers us to deliver a seamless shopping experience for our customers. For more information, visit macysinc.com.
To Our Shareholders
This past year marked one of continued evolution and execution as we set out on a path to redefine the future of Macy's, Inc.
Fiscal 2023 Highlights.
We entered 2023 in a position of financial and operational strength, with a proven track record of executing our strategic priorities, even in periods of uncertainty. Throughout the year, we focused on testing and investing for long-term, profitable sales growth. Relative to our most recent outlook, we delivered full-year net sales in line with our expectations and achieved better-than-expected earnings. In addition, we further strengthened our balance sheet, ending the year with over $1 billion of cash and having generated $1.3 billion of operating cash flow.
Focus on Our Customers.
We also began to implement real change for our customers at Macy's, Bloomingdale's and Bluemercury during 2023, embracing both the art and science of our business. Our data science tools enable us to drive more accurate and agile decision-making based on demand, balanced with a curated and tailored approach to meet the customer's needs, across all three nameplates.
TONY SPRING
Chairman and Chief Executive Officer
2023 Financial Highlights*
Fiscal Year 2023* | |
$23.1B | Net sales |
38.8% | Gross Margin as a |
Percent of Net Sales | |
$1.3B Operating Cash Flow
$1B+ | Ending FY23 Cash |
$105M | Net Income |
*FY23 represents a 53-week period
MACY'S, INC. 2023 ANNUAL REPORT
Some of our customer-focused efforts included:
- At Macy's, we launched On 34th, our newest women's apparel and accessories private brand, further progressing the reimagination of our customer-centric portfolio. We scaled our Macy's digital marketplace, which comprised more than 2,300 brands at the end of the year. Comparable sales for both Backstage store within stores and off-mallsmall-format stores continued to outperform full-line stores. We ended the year with 12 Macy's small format locations and announced plans to open up to 30 more through 2025.
- Bloomingdale's launched its highly curated digital marketplace, ending the year with 120 brands. During the year, Bloomingdale's celebrated
50 years of its iconic Big Brown Bag, added several exciting new brands and launched key collaborations with engaging in-store and digital activations, including Barbie- and Wonka-themed takeovers of The Carousel @ Bloomingdale's. - And Bluemercury moved its headquarters to New York City. The nameplate also unveiled two remodeled luxury stores with elevated spa offerings and high-touch customer service in New Canaan, Connecticut and Bronxville, New York, which serve as the foundation for future locations. During the fourth quarter of fiscal 2023, Bluemercury posted its 12th consecutive quarter of comparable sales growth.
In addition to this operational progress, we continued to advance our Mission Every One enterprise-wide social purpose platform, an essential part of how we operate and make decisions as a business. During 2023, we continued to move forward in
our efforts to direct $5 billion of spending through 2025 to people, partners, products and programs to create a more equitable and sustainable future.
MACY'S, INC. 2023 ANNUAL REPORT
A Bold New Chapter.
We recently launched our new growth strategy, A Bold New Chapter, to fundamentally reposition the company, enhance the customer experience, deliver growth and unlock shareholder value. A Bold New Chapter challenges the status quo to create a more modern Macy's, Inc. We are making the necessary moves to reinvigorate relationships with our customers through improved shopping experiences, relevant assortments and compelling value. Our portfolio of iconic and globally recognized nameplates, healthy balance sheet and fortified operations position us to execute A Bold New Chapter across three strategic priorities over the next three years:
Strengthening
the Macy's nameplate
We plan to put the customer first, prioritizing three key areas to return to top-line growth:
- Revitalizing our assortment to improve both relevance and value;
-
Modernizing the shopping environment to facilitate a convenient, easy, and frictionless customer experience across channels with continued focus
on digital excellence; - Focusing our resources by prioritizing investment in approximately 350 go-forward locations and the continued expansion of our small-format Macy's stores, while closing approximately 150 underproductive locations.
Accelerating luxury growth
Over the next three years, we plan to take advantage of our leadership position in the luxury market, where Bloomingdale's and Bluemercury have been outperformers within the Macy's, Inc. portfolio and across the broader luxury landscape, by further growing our store fleet and digital presence. Across both new and existing markets, we look forward to opening a combined 15 new Bloomie's and Bloomingdale's the Outlet stores and at least
30 new Bluemercury stores, along with roughly 30 Bluemercury remodels.
Simplifying and modernizing end-to-end operations
We are committed to aligning operations to anticipated future omni-demand and delivering a more efficient operating model that better serves our customers. We have plans to rationalize and monetize our supply chain asset portfolio, streamline fulfillment, improve inventory planning and allocation, and deliver a more scalable technology platform.
As we look forward, 2024 is a transition and investment year. Importantly, our financial health enables us to invest in our future growth and pursue the transformative actions required to accelerate financial improvement and deliver future value creation.
MACY'S, INC. 2023 ANNUAL REPORT
Our Talented Team.
I am honored to serve as Chairman and CEO following Jeff Gennette's retirement. Jeff helped set the strong foundation we have today, which is supported by our dedicated teams across the entire enterprise.
In the past eight months, we have attracted new leaders, including a Chief Customer and Digital Officer, a Chief Marketing Officer, a Chief Legal Officer and a new Bloomingdale's CEO. Each of these individuals brings a wealth of expertise and relevant experience to their roles and further strengthens
our deep bench of Macy's, Inc. leaders. Our people have always been our greatest strength, and their commitment and enthusiasm inspire me every day.
The work of executing against our new growth strategy is already underway. We are moving swiftly and methodically. And we are confident we are building a stronger Macy's, Inc. that is well positioned to thrive and create meaningful value for all of our stakeholders. We look forward to keeping you updated on our progress and thank you for your continued support of Macy's, Inc.
TONY SPRING
Chairman and Chief Executive Officer
MACY'S, INC. 2023 ANNUAL REPORT
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Unless the context requires otherwise, references to "Macy's, Inc." or the "Company" are references to Macy's and its subsidiaries and references to "2023," "2022," and "2021" are references to the Company's fiscal years ended February 3, 2024, January 28, 2023 and January 29, 2022, respectively. Fiscal year 2023 included 53 weeks and fiscal years 2022 and 2021 each included 52 weeks.
Forward-Looking Statements
This Annual Report on Form 10-K and other reports, statements and information previously or subsequently filed by the Company with the Securities and Exchange Commission (the SEC) contain or may contain forward-looking statements. Such forward-looking statements are based upon the beliefs and assumptions of, and on information available to, the management of the Company at the time such statements are made. The following are or may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995: (i) statements preceded by, followed by or that include the words "may," "will," "could," "should," "believe," "expect," "future," "potential," "anticipate," "intend," "plan," "think," "estimate" or "continue" or the negative or other variations thereof and (ii) statements regarding matters that are not historical facts. Such forward-looking statements are subject to various risks and uncertainties, including risks and uncertainties relating to:
- the possible invalidity of the underlying beliefs and assumptions;
- the Company's ability to successfully implement A Bold New Chapter strategy, including the ability to realize the anticipated benefits within the expected time frame or at all;
- the success of the Company's operational decisions, including product sourcing, merchandise mix and pricing, and marketing and strategic initiatives, such as growing its digital channels, expanding the Company's off-mall store presence and modernizing its technology and supply chain infrastructures;
- general consumer shopping behaviors and spending levels, including the shift of consumer spending to digital channels, the impact of changes in general economic conditions, consumer disposable income levels, consumer confidence levels, the availability, cost and level of consumer debt, and the costs of basic necessities and other goods;
- competitive pressures from department stores, specialty stores, general merchandise stores, manufacturers' outlets and websites, off-price and discount stores, and all other retail channels, including digitally-native retailers, social media and catalogs;
- the Company's ability to remain competitive and relevant as consumers' shopping behaviors continue to migrate to digital shopping channels and other shopping channels;
- the Company's ability to maintain its brand image and reputation;
- possible systems failures and/or security breaches or other types of cybercrimes or cybersecurity attacks, including any security breach that results in the theft, transfer or unauthorized disclosure of customer, employee or company information, or the failure to comply with various laws applicable to the Company in the event of such a breach;
- the cost of colleagues, inclusive of inflation and cost of benefits as well as attracting and retaining quality colleagues;
- transactions and strategy involving the Company's real estate portfolio;
- the seasonal nature of the Company's business;
- declines in the Company's credit card revenues;
- the effects of weather and natural disasters, including the impact of climate change and health pandemics, on the Company's business, including the ability to open stores, customer demand and its supply chain, as well as our consolidated results of operations, financial position and cash flows;
- conditions to, or changes in the timing of, proposed transactions and changes in expected synergies, cost savings and non-recurring charges;
- the potential for the incurrence of charges in connection with the impairment of tangible and intangible assets, including goodwill;
- possible changes or developments in social, economic, business, industry, market, legal and regulatory circumstances and conditions, including supply chain disruptions, inventory shortage, labor shortages, wage pressures and rising inflation, and their related impact on costs;
- possible actions taken or omitted to be taken by third parties, including customers, suppliers, business partners, competitors, banks and other financial institutions, and legislative, regulatory, judicial and other governmental authorities and officials;
- changes in relationships with vendors and other product and service providers;
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- our level of indebtedness;
- currency, interest and exchange rates and other capital market, economic and geo-political conditions;
- unstable political conditions, civil unrest, terrorist activities and armed conflicts, including the ongoing conflict between Russia and Ukraine and the Israel-Hamas war;
- the possible inability of the Company's manufacturers or transporters to deliver products in a timely manner or meet the Company's quality standards;
- the Company's reliance on foreign sources of production, including risks related to the disruption of imports by labor disputes, regional and global health pandemics, and regional political and economic conditions;
- duties, taxes, other charges and quotas on imports;
- labor shortages;
- the Company's ability to declare and pay future dividends and continue its share repurchases; and
- the Company's ability to execute on its strategies or achieve expectations related to environmental, social, and governance matters.
In addition to any risks and uncertainties specifically identified in the text surrounding such forward-looking statements, the statements in the immediately preceding sentence and the statements under captions such as "Risk Factors" in reports, statements and information filed by the Company with the SEC from time to time constitute cautionary statements identifying important factors that could cause actual amounts, results, events and circumstances to differ materially from those expressed in or implied by such forward-looking statements.
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Macy's Inc. published this content on 15 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 April 2024 18:47:08 UTC.
