Macy's, Inc. (M) CEO Jeff Gennette Presents at Goldman Sachs 28th Annual Global Retailing Conference (Transcript)

Summary of Macy's, Inc. Conference Call Company Overview - Company: Macy's, Inc. (NYSE:M) - Industry: Retail - Sales: Over $20 billion - **Store Locations**: Over 700 across various banners including Macy's, Bloomingdale's, and Bluemercury [3][3] Core Business Strategy - **Polaris Strategy**: Focused on transforming the business and enhancing omni-channel capabilities, combining physical stores with a strong e-commerce presence [4][6] - **Omni-Channel Engagement**: Approximately 60-70% of customers engage through omni-channel, highlighting the importance of a seamless shopping experience [4][4] Financial Performance - **Q2 Performance**: Sales exceeded 2019 levels by nearly 2% with a comparable store sales increase of about 6% [9][9] - **New Customer Acquisition**: 5 million new customers acquired in Q2, with 3.2 million being new to the Macy's brand [9][9] - **Guidance**: Expecting single-digit increases in comparable sales for the remainder of the year, with potential headwinds from supply chain issues and COVID variants [10][10] Consumer Trends and Demand - **Consumer Spending**: Confidence in continued consumer spending despite potential economic headwinds [8][8] - **Category Performance**: Strong performance in categories like denim and sportswear, with a cautious outlook on apparel due to supply chain constraints [11][11] Pricing and Promotions - **Pricing Strategy**: Focus on higher average unit retail (AUR) and reduced reliance on deep discounts, with gross margin at 40.6%, an improvement of 180 basis points from 2019 [49][49] - **Promotional Levels**: Lower promotional levels compared to historical norms, with a focus on optimizing pricing through data analytics [52][52] Supply Chain Management - **Supply Chain Challenges**: Anticipating impacts on certain categories, particularly apparel, but confident in managing inventory needs through strong vendor relationships [58][58] - **Inventory Strategy**: Inventory down 14% compared to Q2 2019, with a focus on maintaining a healthy stock-to-sales ratio [61][61] Store Portfolio and Future Outlook - **Store Closures**: Continued assessment of store locations, with 125 closures planned over multiple years, focusing on high-performing locations [66][66] - **Market Share Focus**: Aiming for market share gains and leveraging omni-channel opportunities as the company emerges stronger post-pandemic [67][67] Key Initiatives - **Toys R Us Partnership**: Aiming to leverage the Toys R Us brand to capture a larger share of the toy market, with plans for significant in-store presence [30][30] - **Digital Investments**: Committed to increasing capital spend on digital initiatives to enhance omni-channel capabilities, targeting$ 10 billion in digital sales by 2023 [46][46] Conclusion - Overall Sentiment: Macy's is positioned to capitalize on market opportunities with a strong focus on omni-channel strategies, customer acquisition, and maintaining financial health through effective inventory and pricing management [69][69]