Macy's, Inc. (M) CEO Jeffrey Gennette Presents at JPMorgan 7th Annual Retail Round-Up Virtual Conference (Transcript)

Summary of Macy's, Inc. Conference Call Company Overview - Company: Macy's, Inc. (NYSE:M) - Event: JPMorgan 7th Annual Retail Round-Up Virtual Conference Call - Date: April 14, 2021 Key Points Industry and Market Position - The retail industry is experiencing a recovery as the pandemic subsides, with Macy's positioned to capture demand due to its flexible Polaris strategy [4][6] - Macy's is the second-largest online retailer in its categories, aiming for $10 billion in digital sales by 2023 [6] Consumer Behavior - There is a noticeable increase in consumer spending, particularly among core customers, with a 7% increase in average spend compared to 2019 [5][10] - New customer acquisition has increased by 19% compared to 2019, indicating a positive trend in customer engagement [5][12] Sales and Revenue Trends - Digital sales grew by 24% in 2020, with continued momentum into 2021, including a 75% increase in unique visits and an 8% increase in conversion rates [15][16] - The company is seeing strong performance in categories such as home goods, fine jewelry, fragrances, and luxury handbags [19][20][22] Inventory and Margin Management - Gross margins are improving due to better pricing analytics and inventory management, with a focus on reducing delivery expenses for digital orders [7][43] - The company aims for a gross margin of 37% in 2021, with expectations of lower margins in new categories like toys and home goods [48][53] Store Fleet Transformation - Macy's is closing underperforming stores while investing in remaining locations to enhance omnichannel experiences, including curbside pickup and faster service [38][39] - The company plans to open 45 new Backstage stores, reflecting a successful off-price strategy [26] Capital Allocation and Financial Health - Macy's ended 2020 with$ 1.7 billion in cash, providing flexibility for growth initiatives and debt reduction [61] - The company is focused on investing in digital supply chain improvements and technology to enhance competitiveness [63] Future Outlook - Macy's aims to return to pre-pandemic sales levels and achieve sustainable profitability through a digitally-led omnichannel strategy [67] - The company is optimistic about the recovery of apparel sales and the growth of new categories, expecting to maintain a healthy sales-to-stock ratio [55][68] Additional Insights - The Macy's Media Network is generating new income streams, contributing $35 million in 2020 and expected to reach$ 60 million in 2021 [59] - The company is committed to improving customer experience both online and in-store, focusing on younger demographics and enhancing product assortments [28][29] This summary encapsulates the key insights from the conference call, highlighting Macy's strategic positioning, consumer trends, financial health, and future outlook in the retail industry.