Anyoftheseitemsarealsoavailableinprinttoanyshareholderwhorequeststhem.Requestsshouldbesenttothe CorporateSecretaryof Macy’s, Macy's, Inc.at151West34th 34th Street,NewYork,NewYork10001.

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The Company gathers colleague feedback at key times throughout the colleague lifecycle from onboarding to offboarding providingand provides regular venues for colleagues to ask questions and share their opinions, such as Ask Me Anything sessions, town halls and employeecolleague resource groups. The Company formally solicits feedback from all colleagues twice a year through an enterprise-widecompany-wide Culture Pulse Survey. The results are shared across the organization to provide visibility to both managers (called people leaders) and colleagues, andto help create an opportunityopportunities for open and constructive discussions among teams.  

teams and to facilitate action planning to improve the colleague experience.

The Company's commitment to diversity, equity and inclusion is guided by its values and starts from within by building a workforce that accurately represents the communities it serves atworking to enhance diversity and inclusion across all levels of our organization to enable us to more closely and by cultivatingeffectively engage with all of our customers and cultivate a culture of belonging. The Company seeks to empower colleagues to harness and unleash the power of their individuality to help drive better business decisions for customers and shareholders.

The Company actively promotes an inclusive and welcoming environment for all customers and is focused on diversity and inclusion beyond the organization—working to support and develop diverse suppliers; investing in economic and workforce development; contributing to organizations fighting for social justice; and awarding scholarships to cultivate future leaders.

One of the Company’s measures to advance the diversity of its leadership at the senior director level and above is the MOSAIC program, a one-year professional development program launched in 2019 for its top talent at the manager and director levels who self-identify as ethnically diverse.  From 2019 to 2020, approximately 61% of program participants were promoted or moved into a new role, with approximately 18% promoted to senior director level. The Company is currently at 24% ethnic diversity at the senior director level and above, with a goal to reach 25% in 2021 and 30% by 2025.

Macy’s believes people leaders play an important role in driving performance and an inclusive culture.  In 2020, the Company incorporated People Leader Commitments (which were launched in 2019) and diversity and inclusion (D&I) into the performance review process.  In 2021, the Company has included standardized D&I goals into annual reviews at the director level and above.

Company-sponsored, employee-ledcolleague-led resource groups (ERGs)(CRGs) provide an opportunity for colleagues to experience connection, achieve belonging and develop leadership skills. In 2023, the Company completed its first phase of the CRG refresh, which included further expansion of chapters resulting in 100% of Macy's and Bloomingdale's colleagues now having access to a CRG.

Since 2015, the Company has achieved a score of 100 every year on the Human Rights Campaign Foundation's Corporate Equality Index, earning the designation as “Best Place to Work for LGBTQ+ Equality.” This index is the national benchmarking tool measuring corporate policies, practices and benefits pertinent to LGBTQ+ workplace equality. In 2023, the Company received the Equality 100 Award marking the ninth consecutive year that the Company has received a score of 100. Additionally, the Company broadened the Week of Understanding programming in 2023 to encompass two additional topics, Disability Inclusion and Religion, as part of the Company's efforts to foster a more inclusive culture. Other enterprise-wide events included our CEO-led "Can We Talk?" discussion series featuring external keynote speakers designed to further build community.  ERGs expanded from 51 to 94 chapters across Macy’s and Bloomingdale’s in 2020 and continue to be a resource for attracting and retaining talent.

Macy’s Dcritical DE&I skills.

The Company's DE&I focus areas extend beyond its colleagues and include community, customers, marketing and suppliers. Below are a few additional highlights from the past year:

Macy's, Inc. believes that learning goes hand in hand with career growth, personal satisfaction and outstanding results. The Company aspires to create a learning culture where colleagues actively learn,can build their skills, apply what they have learnedtheir learning to address business challenges and share their knowledge, including their mistakes,experiences, to help others grow. Learning is accessible through Ignite (powered by Degreed), the Company’sCompany's self-directed learning experience platform as well as through technology, social learning and meaningful experiences and exposures with colleagues.

We have also partnered with Guild Education to provide eligible colleagues with a fully-funded education benefit, including more than 100 programs that range from foundational learning–such as high school completion and English language–to college degrees.

The Company makes investments in its people leaders and future leaders. Macy’s and Bloomingdale’sMacy's Executive Development ProgramsProgram and Bloomingdale's Leadership Development Program offer immersive, hands-on learning experiences for recent college graduates from top universities across the U.S. to jump startjump-start a career in retail, with specialization in technology, digital, stores, merchandising, planning, human resources and creditsupply chain. Macy's and customer service. Macy’s and Bloomingdale’sBloomingdale's offer internships for college students and Bloomindale’sBloomingdale's offers an early immersion program focused on providing experiential learning and career exposure to those who identify with underrepresented groups. Bluemercury’sfoster inclusivity. Bluemercury's Shooting Stars is a six-month mentorship program that empowers mentees to own their journey by creating a development plan, becoming an inclusive leader and leveraging resources to support their career aspirations. In 2019, Macy’s partnered with Parsons School2022, the Company launched a multi-year career development initiative. This initiative included the launch of Design to launch Macy’s Fashion Academy - a custom executive education program designedCareer Hub on the Company intranet to offer best-in-class development across all disciplinesuser-friendly tools to assist colleagues at any part of its merchant talent.

Approximately 81%their career journey; a virtual Career Expo that featured workshops, panel discussions, external speakers and functional showcases; and people leader support with learning plans focused on career coaching and development. In 2023, the Company expanded the Career Expo from two weeks to a three-month-long series of small-group interactive sessions, which enabled colleagues completed unconscious bias trainingto interact directly with experts and leaders to learn about career resources and build skills. Over the course of the series, the Company featured 18 workshops, panel discussions and career-planning sessions that gave colleagues a better sense of the many career opportunities that exist at Macy's, Inc. and how colleagues can enhance their skills within their current role or enable them to take the next step in 2019 and approximately 96% of professional colleagues have utilized Ignite for personal and professional development.  their career.

People leaders invest a minimum of 40 hours ofparticipate annually in leadership development each year.training and have access to robust on-demand development resources. Professional colleagues participate in a 90-day onboarding experience with performance milestones, support resources and role-specific training.

Data Analytics

Macy’s is embedding data and analytics into its human capital management.  Below are examples of how the Company leverages data-driven insights to support key business decisions.

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Talent

Macy’s employs approximately 90,000 full-time, part-time and seasonal colleagues nationwide across a variety of functions and roles.  The Company is committed to having the best talent in retail – encouraging the continuous upskilling of its colleagues and empowering them to chart their own career paths, while staying focused on acquiring the best and brightest to inject fresh thinking.

Total Rewards

Macy’s

Macy's, Inc. offers comprehensive benefits and an awards strategy that recognizesis designed to recognize performance and talent development. Eligible colleagues have varied medical plan options to meet individual needs.  The Company’s commitment to colleagues’ well-being expanded during the pandemic in 2020, as it covered 100% of insurance premiums for colleagues while on furlough, including coverage for dependents. The Company provides paid time-off, parental leave and holiday pay, as well as a company 401(k) plan and match, dependent care flexible spending account and a colleague merchandise discount and tuition reimbursement for eligible colleagues.

The Company believes that pay equity is fundamental to its culture and DDE&I strategy. Compensation is based on job, position, responsibilities, experience and performance with incentive opportunities that allow all colleagues to share in the Company’sCompany's success.

In 2021, the Company expects to achieve greater than 99% pay equity across gender and race.  In terms

As part of both base pay and total compensation, the Company expectsour commitment to pay femaletransparency, all colleagues at greater than 99% of what it pays malehave access to view their role's pay zone and salary range to ensure colleagues and it expects that minorities will be paid at greater than 99% of what it pays non-minorities in the U.S.

The Company informs its compensation approach through market surveys andunderstand their earnings potential. In addition, pay ranges are viewable on all job postings nationwide. People leaders and salaried colleagues have access to ensureon-demand Compensation Education webinars to learn how pay is competitivedetermined and fair and has a robust process to assess internal pay levels for consistency and fairness.  The Company’sdeep dive into our incentive programs reward colleagues across all levels and functions for achievements in driving business results and upholding its shared culture and values, including annual cash incentives for corporate colleagues based on performance, Path to Growth quarterly incentive program for frontline colleagues, spot bonuses and commissions for store colleagues, and annual equity grants to eligible senior management.

programs.

As of January 30, 2021, excluding seasonal employees, Macy’sFebruary 3, 2024 Macy's, Inc. had 75,711approximately 85,581 full-time and part-time employees.U.S. employees, on a combined basis. Macy's and Bloomingdale's workforce, on a combined basis, is comprised of approximately 65% ethnically diverse colleagues (with 30% at the Director+ levels) and 76% female colleagues. Because of the seasonal nature of the retail business, the number of employees peaks induring the holiday season. Approximately 7%8% of employees are represented by unions.

Macy’s,

The Company continues to advance its ESG strategy as it responds to evolving stakeholder expectations. Certain highlights of recent ESG accomplishments include earning a B score on its 2023 CDP Climate Change Report covering fiscal year 2022, joining US Cotton Trust Protocol, partnering with World Wildlife Fund to publish Water Stewardship policy, publishing Animal Welfare Policy, Exotic Skins Policy, an updated Fur Policy, a Preferred Materials Policy, and a Human Capital Report was releasedRights Policy. We continued our investment in March 2021our female factory workers by rolling out 14 Worker Well Being programs in private brand factories with RISE: Reimagining Industry to Support Equality.

The Company's management is responsible for the development and implementation of its ESG strategies and programs. Ultimate oversight by the Company's Board of Directors is included in its committee charters and practices. The Chief Operating Officer (COO) and Chief Financial Officer (CFO), along with the Disclosure Committee, engages with stakeholders on ESG-related issues (including climate) and provides feedback to management and the Board. The Sustainability Team, which sits within the COO and CFO's office, reports to the Senior Vice President of Private Brand Sourcing, Product Development & Production, and is available at https://macys.learn.taleo.net/files/upload/hcr/index_ORIG.html#/lessons/MQA5eF65af1i3n8XU_BME3xQTsmGcmHE.responsible for the teams that manage ESG initiatives and supply chain transparency. Management committees, including the Sustainability Executive Steering Committee, Disclosure Committee and Corporate Strategy Group, also approve the ESG strategy and priorities, guide risk management and link to growth opportunities. The contentsEnvironmental Services team is responsible for the development of the Human Capital Report are not incorporated by reference into this Annual Report on Form 10-K.

Company's environmental programs for all facilities across the organization. These programs include policies and procedures designed to ensure compliance with federal, state and local environmental laws.

ThefollowingtablesetsforthcertaininformationasofMarch 25,2021 21, 2024 regardingtheExecutiveOfficersoftheCompany:

Tony Spring was appointed Chief Executive Officer of the Company in February 2024 and is expected to succeed JeffGennettehasbeen as Chairman of the Board upon conclusion of the 2024 Annual Meeting. Prior thereto he served as President and ChiefExecutive Officer-Elect of the Company from 2023 to 2024, Executive Vice President of the Company from 2021 to 2023 and Chairman and Chief Executive Officerof Bloomingdale's from 2014 to 2023, President and Chief Operating Officer of Bloomingdale's from 2008 to 2014, Executive Vice President of Bloomingdale's from 2004 to 2008, Executive Vice President of Marketing at Bloomingdale's from 1998 to 2004 and held various other roles within theCompanysinceMarch2017andChairman Bloomingdale's organization from 1987 to 1998 where he assumed positions of increasing responsibility in theBoardsinceJanuary2018;priortheretohewas home furnishings area before being promoted to Senior Vice PresidentfromMarch2014toAugust2017,ChiefMerchandisingOfficerfrom

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February2009toMarch2014,ChairmanandChiefExecutiveOfficerofMacy’sWestinSanFranciscofromFebruary2008toFebruary2009andChairmanandChiefExecutiveOfficerofSeattle-basedMacy’sNorthwestfromFebruary2006throughFebruary2008.

for home furnishings.

Adrian V. Mitchell served as Chief Operating Officer of the Company starting in March 2023 and has been Executive Vice President and Chief Financial Officer of the Company since November 2020; prior thereto he served as a Managing Director and Partner in the DigitalBCGDigital BCG and Consumer Practices of Boston Consulting Group, a global management consulting firm, from 2017 to 2020, Chief Executive Officer of Arhaus LLC, a retail chain that designs and sells home furnishings, from 2016 to 2017, in various executive positions at Crate and Barrel Holdings, Inc. from 2010 to 2015 including interim CEO, Chief Operating & Chief Financial Officer and Chief Financial Officer, and in management positions at Target Corporation from 2007 to 2010 including Director of Strategy & Interactive Design for target.com and Director of Innovation & Productivity leading enterprise-widecompany-wide projects for Target Corporation.

ElisaD.GarciaCorporation.

Tracy M. Preston hasbeen Chief Legal Officer and Corporate Secretary of the Company since January 2024; prior thereto she served as Chief Compliance Officer, Chief Legal Officer and Corporate Secretary of HanesBrands Inc., an apparel company, from 2021 to 2023, Chief Compliance Officer, Chief Legal Officer and Corporate Secretary of Neiman Marcus Group, Inc., a retail company, from 2013 to 2021, ExecutiveVicePresident,ChiefLegalOfficer General Counsel andSecretaryoftheCompanysinceSeptember2016;priortheretosheservedasChiefLegalOfficerofOfficeDepot,Inc. Levi Strauss & Co. fromDecember 2002 to 2013, Partner at Orrick, Herrington & Sutcliffe LLP, a law firm, from 1997 toSeptember2016, 2002, and held various positions at several law firms from 1991 to 1997.

Danielle L. Kirgan has been ExecutiveVicePresidentandSecretaryfromJuly2007toSeptember2016andGeneralCounselfromJuly2007toDecember2013.

John T.HarperhasbeenExecutiveVicePresident andChiefOperationsOfficeroftheCompanysinceJanuary2020;priortheretoheservedasChiefStoresOfficerfromSeptember2017toJanuary2020,PresidentofStoreOperationsfromMay2009toSeptember2017,PresidentofMacy’sHomeStorefrom2007to2009,Vice ChairmanofMacy’sMidwestfrom2006to2007andChairmanofHecht’sdepartmentstoresfrom2004to2006.

DanielleL.KirganhasbeenExecutiveVicePresidentandChiefTransformation and Human Resources OfficeroftheCompanysinceFebruary2020andChiefHumanResourcesOfficersinceOctober2017;priortheretosheservedasSeniorVicePresident,PeopleatAmericanAirlinesGroup,Inc.fromOctober2016toOctober2017,ChiefHumanResourcesOfficeratDardenRestaurants,Inc.fromJanuary2015toOctober2016andSeniorVicePresidentfromMay2010,VicePresident,GlobalHumanResourcesatACIWorldwide,Inc. in 2009, and Vice President, Human Resources at Conagra Foods, Inc. fromJanuary2009 2004 toDecember2009,andVicePresident,HumanResourcesatConagraFoods,Inc.from2004to2008.

Paul Griscom has been Senior Vice President and Controller of the Company since August 2020; prior thereto he served as Vice President and interim Principal Accounting Officer from June to Augustin 2020, Vice President, Financial Reporting and Accounting Services from May 2019 to August 2020, Vice President, Financial Reporting from June 2017 to April 2019, Director of Financial Reporting from July 2016 to May 2017, Director, Training & Products, GAAP Dynamics from 2012 to 2016 and held various positions at KPMG LLP from 2000 to 2012.

2012.

In evaluating the Company, the risks described below and the matters described inunder “Forward-Looking Statements” should be considered carefully. Such risks and matters are numerous and diverse, may be experienced continuously or intermittently, and may vary in intensity and effect. Although the risks are organized by heading, and each risk is described separately, many of the risks are interrelated. Any of such risks and matters, individually or in combination, could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows, as well as on the attractiveness and value of an investment in the Company’sCompany's securities.

The recent outbreak You should not interpret the disclosure of COVID-19 any risk factor to imply that the risk has hadnot already materialized. While we believe we have identified and will continuediscussed below the key risk factors affecting our business, there may be additional risks and uncertainties that are not presently known or that are not currently believed to have abe significant negative impact on the Company’sthat may adversely affect our business, and financial results.

In December 2019, there was an outbreak of COVID-19 in China that has since spread to the other regions of the world. The outbreak was subsequently labeled as a global pandemic by the World Health Organization in March 2020. As the pandemic continues to spread throughout the United States, businesses as well as federal, state and local governments have implemented significant actions to attempt to mitigate this public health crisis. Although the ultimate

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severity of the COVID-19 outbreak is uncertain at this time, the pandemic has had and will continue to have adverse impacts on the Company’s financial condition, and results of operations including, but not limited to:

The Company cannot foresee whether the outbreak of COVID-19 will be effectively contained, nor can it predict the severity and duration of its impact, how variant strains of the COVID-19 virus will impact the pandemic, or the availability and distribution of effective medical treatments or vaccines. As such, the Company will continue to assess the highly uncertain financial impacts of COVID-19. The disruption to the global economy and to the Company’s

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business may lead to triggering events that may indicate that the carrying value of certain assets, including inventories, long-lived assets, intangibles, and goodwill, may not be recoverable.

The impact of COVID-19 may also exacerbate other risks included in in this section, any of which could be material. The situation is changing rapidly, and future impacts may materialize that are not yet known. Even if the COVID-19 pandemic subsides, the Company may continue to experience materially adverse impacts to the Company's business as a result of the virus' long-term economic impact, including adverse impacts on the business operations, liquidity and impacts of any recession that may occurcash flows in the future.

In February 2020,2024 we announced the PolarisA Bold New Chapter, a strategy a multi-year plan designed to stabilizeenhance the customer experience, deliver sustainable, profitable growth and unlock shareholder value over the next three years. The strategy builds on the five growth factors and focuses on three strategic priorities:

We plan to make value-enhancing investments to support these initiatives primarily focused on digital and technology, data and analytics, supply chain modernization and omni-channel capabilities. These initiatives have required and will continue to require our management, colleagues, and contractors to make changes in our business operations and to improve productivity and profitability, and positionare subject to the Company for sustainable, profitable growth. Overability to attract and retain skilled personnel to support the courseinitiatives. We face challenges in executing A Bold New Chapter strategy and initiatives in the current environment of the COVID-19 pandemic, we have refined the components of the Polaris strategy to focus where we believe we can drive competitive advantageheightened inflation, increased interest rates, economic uncertainty, geopolitical disruption and differentiation to first recover business and then drive growth, including a focus on winning with fashion and style, delivering clear value, excelling in digital shopping, enhancing store experience, modernizing supply chain and enabling transformation.other macroeconomic conditions that may impact discretionary spending. Our ability to achieve sustainable, profitable growth is subject to the successful implementation of our strategic plans including the Polaris strategy, and realization of anticipated benefits and savings. If we are unable to successfully execute our strategic plans and initiatives to achieve the intended results or these investments or initiatives do not perform as expected or create implementation or operational challenges, our profitability and growth could suffer.

Our profitability depends on our ability to manage inventory levels and merchandise selection. Overestimating customer demand for merchandise will likelycan result in the need to record unplanned and incremental inventory markdowns and sell excess inventory at clearance prices, which would negatively impact our gross margins and operating results. Underestimating customer demand for merchandise can lead to insufficient inventory shortages,to meet demands, missed sales opportunities and negative customer experiences.

If we are unable to protect against inventory shortage, our results of operations and financial condition could be adversely affected.

We conduct our retail merchandising business under highly competitive conditions. Although Macy's, Inc. is one of the nation’snation's largest retailers, we have numerous and varied competitors at the national and local levels and digital competitors at the global level, including department stores, specialty stores, general merchandise stores, manufacturers’manufacturers' outlets and websites, off-price and discount stores, online retailers and catalogs, among others. Competition is characterized by many factors, including assortment, advertising, price, quality, service, location, reputation and credit availability. Any failure by us to compete effectively could negatively affect our business and results of operations.

As consumers continue to migrate online, a trend that has accelerated with the COVID-19 pandemic,to digital shopping channels, we face pressures to not only compete from a price perspective with our competitors, some of whom sell the same products, but also to differentiate Macy's, Inc.'s merchandise offerings, serviceservices and shopping experienceexperiences to stay relevant as a modern department store in retail's ever-changing environment. Macy's launched On 34th and State of Day, new private brands, in 2023 and February 2024, respectively, and expects to refresh or replace all existing brands in its private brands portfolio through 2025. Macy's digital marketplace offers over 2,300 brands from third party sellers and the Company launched a Bloomingdale's marketplace in 2023 to introduce customers to new merchandise options. We continue to significantly invest in our omnichannelomni-channel capabilities, seeking to provideimprove the profitability of our digital business through delivery expense reduction, gross margin expansion and other initiatives to support digital sales growth. We continue to seek to improve the delivery experience of our customers with a seamless shopping experience between our store locationsstrategic investments to fulfill digital sales demand and our online and mobile environments and a favorable fashion experience.elevated delivery speed expectations. Insufficient, untimely or misguided investments in this areathese areas could significantly impact our profitability and growth and affect our ability to attract new customers, as well as maintain our existing ones.

growth.

In addition, a continuedsignificant decline of customer store traffic andor migration of sales from brick and mortarbrick-and-mortar stores to digital platforms could lead to additional store closures, restructuring and other costs that could adversely impact our results of operations and cash flows.

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We have invested in facilities and fixtures upgrades, merchandise assortment and customer service in selected stores to improve customer retention rates and overall customer satisfaction. We have opened new off-mall smaller store formats – Macy's small format and Bloomie's – in selected markets to act as fill-in locations in existing markets to gain foot traffic and a new customer base, replacement locations in markets where an underperforming full-line location closure would result in a market exit, and to enter new markets. In 2022, we introduced permanent Toys “R” Us shops within all Macy's locations. While these store investments, off-mall store formats, and in-store shops are intended to improve the customer store experience in our stores and drive traffic, realization of these benefits may not occur.

Because we rely on the ability of our physical retail locations to remain relevantattract customers, provide full or curated merchandise selections, drive traffic to customers,digital channels and assist in fulfillment, returns and other omni-channel functions, providing a desirable and sought-out shopping experiencesexperience is important to our financial success. Changes in consumer shopping habits, an over-malled/over-retailed environment,a decline in mall shopping environments, financial difficulties at other anchor tenants, significant mall vacancy issues, mall violence and new on- and off-mall developments could each adversely impact the traffic at current retail locations and lead to a decline in our financial condition or performance.

We may continue to explore opportunities to monetize our real estate portfolio, including sales of stores as well as non-store real estate, such as warehouses, outparcels and parking garages. We also continue to evaluate our real estate portfolio to identify opportunities where the redevelopment value of our real estate exceeds the value of non-strategic operating locations. This strategy is multi-pronged and may include transactions, strategic alliances or other arrangements with mall developers or other unrelated third-parties. Where feasible, we may subdivide an existing parcel, continue to operate a store and redevelop any excess parcel for mixed-use, or close the store and redevelop an entire parcel into a mixed-use development, in either event selling the parcel once the site development plan is approved by governmental authorities. Due to the cyclical nature of real estate markets and the risks of real estate development, the performance of our real estate strategy is inherently volatile and could have a significant impact on our results of operations or financial condition.

Our business is seasonal, with a high proportion of revenues and operating cash flows generated during the second half of the year, which includes the fall and the months of November and December. A disproportionate amount of our revenues is realized in the fourth quarter due to this seasonality. Should sales during this period fall below our expectations, a disproportionately negative impact on our annual results of operations could occur.

We generally incur significant additional expenses in the period leading up to the months of November and December in anticipation of higher sales volume in those periods, including costs for additional inventory, advertising and employees. If we are not successful in executing our sales strategy during this period, we may have to sell the inventory at significantly reduced prices or may not be able to sell the inventory at all, which could have a material adverse effect on our results of operations and cash flows.

Our business is dependent upon attracting, training, developing and retaining quality employees.employees at all levels of the organization, and management personnel to develop and effectively execute successful business strategies. Macy's, Inc. has a large number of employees, many of whom are in entry level or part-time positions with historically high rates of turnover. Our ability to meet labor needs while controlling costs associated with hiring and training new employees is subject to external factors such as unemployment levels, prevailing wage rates, minimum wage legislation and changing demographics. LowIn recent years, low unemployment, labor shortages, intense competition for talent and a competitive wage environment have impacted our ability to attract, and recruit talent, particularly for science, technology, engineering and math positions. The Company operates in a highly competitive and challenging business environment and is highly dependent upon management personnel to develop and effectively execute successful business strategies and tactics. Restructurings and organizational changes can have near-term impacts on knowledge transfer and result in the loss of key subject matter experts and leaders. Any circumstances that adversely impact our ability to attract, train, develop and retain quality employees could negatively affect our business and results of operations.

talent.

Minimum wage increases by states and wage and benefit increases to attract and retain workers in a tight labor market have increased labor costs in the retail sector. These increased costs pressure our margins and could have a negative impact on our financial results, particularly if future increases are instituted by state legislatures or the federal government.

results.

Our expenses relating to employee health benefits are significant. Recent medical plan cost increases have been driven by a rise in high-cost claimants, high-cost conditions, high utilization of outpatient facilities, physicians and in-hospital stays, and demographic shifts to an older enrollment population. Unfavorable changes in the cost of suchemployee health benefits could negatively affect our financial results and cash flow. Healthcare costs have risen significantly in recent years, and recent legislative and private sector initiatives regarding healthcare reform have resulted and could continue to result in significant changes to the U.S. healthcare system. Due to uncertainty regarding legislative or regulatory changes, we are not able to fully determine the impact that future healthcare reform will have on our company-sponsored medical plans.

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In 2005, in connection with the sale of most of ourthe Company's credit card accounts and related receivablesreceivable balances to Citibank, (in its role asN.A. (Citibank), the issuerCompany and Citibank entered into a long-term marketing and servicing alliance pursuant to the terms of oura Credit Card Program Agreement (Credit Card Program). Subsequent to this initial arrangement and associated amendments, on December 13, 2021, the Company entered into the sixth amendment to the amended and restated Credit Card Program with Citibank (the Program Agreement), pursuant to which Citibank issues, maintains and services Macy's and Bloomingdale's private label and co-branded credit card). Followingcards. Under the sale, we share in the economic performance ofProgram Agreement, which extends until March 31, 2030, Citibank owns the credit card receivables generated from sales through the credit cards and Macy's receives fees and shares in profits based on a tiered return on the receivables portfolio net of program with Citibank.expenses. Credit card revenues, net were $619 million, or approximately 2.7% of net sales, for 2023. Deterioration in economic or political conditions could adversely affect the volume of new credit accounts, the amount of credit card program balances and the ability of credit card holders to pay their balances. These conditions could result in the Company receiving lower payments under the credit card program.

Under the terms of the

In addition, recent shifts from sales through our proprietary credit cards to debit products and alternative buy-now-pay-later payment methods may result in increased costs and could have a negative impact to credit card program, Citibank has the rightrevenues due to terminate the agreement prior to the end of the current term if sales decrease by more than 34% over a twelve-month period as compared to the fiscal twelve-month period from July 2006 to June 2007 (the “Benchmark Year”).  Based on the results of the Company’s February 2021 fiscal period, sales for the most recent twelve-month period then ended have decreased by more than 34% as compared to the Benchmark Year.  We are in on-going discussions with Citibank concerning thepotentially reduced credit card program.  We cannot assure that Citibank will not terminate the credit card program or require more favorable terms to continue the credit card program.  If Citibank does terminate the credit card program, any new credit card program may be on terms less favorable to us than the current credit card program.  

receivable balances.

Credit card operations are subject to many federal and state laws that may impose certain requirements and limitations on credit card providers. Citibank and our subsidiary bank, FDS Bank, may be required to comply with regulations that may negatively impact the operation of our private labelproprietary credit card. This negative impact may affect our revenue streams derived from the sale of such credit card accountscards receivables portfolio and our financial results.

Significant changes in interest rates, decreases in the fair value of plan assets and timing and amount of benefit payments could affect the funded status of our plans and could increase future funding requirements of the plans. A significant increase in future funding requirements could have a negative impact on our cash flows, financial condition or results of operations.

These plans allow eligible retiring employees to receive lump sum distributions of benefits earned. Under applicable accounting rules, if annual lump sum distributions exceed an actuarially determined threshold of the total of the annual service and interest costs, we would be required to recognize in the current period of operations a settlement expense of a portion of the unrecognized actuarial loss, andwhich could have a negative impact on our results of operations.

We believe our reputation and brand image are partially based on the perception that we act equitably and honestly in dealing with our customers, employees, business partners and shareholders. Our reputation and brand image may be deteriorated by any incident that erodes the trust or confidence of our customers or the general public, particularly if the incident results in significant adverse publicity or governmental inquiry. Information about us, whether or not true, may be instantly and easily posted on social media platforms at any time, and may be adverse towhich could adversely impact our reputation or brand.brand image. The harm could be immediate without affording us an opportunity for redress or correction. Other brand risks include an active shooter incident at a location or injury or death at a parade or other branded event. If our reputation or brand image is damaged, our customers may refuse to continue shopping with us, potential employees may be unwilling to work for us, business partners may be discouraged from seeking future business dealings with us and, as a result, our operationsbusiness and financial results of operations may suffer.

We believe that our copyrights, trademarks, trade dress, trade secrets and similar intellectual property are important assets and key elements of our strategy, including those related to our private brand merchandise. We rely on copyright and trademark law, trade secret protection and confidentiality agreements with our employees, consultants, vendors and others to protect our proprietary rights. If the steps we take to protect our proprietary rights are inadequate, or if we are unable to protect or preserve the value of our copyrights, trademarks, trade secrets and other proprietary rights for any reason, our merchandise brands and business could be negatively affected.

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Our business depends on the orderly receipt and distribution of merchandise and effective management of our distribution and fulfillment centers. Unforeseen disruptions in operations due to fire, severe weather conditions (including those that may be caused by climate change), natural disasters, health pandemics or other catastrophic events, labor disagreements, or other shipping problems may result in the loss or unavailability of inventory and/or delays in the delivery of merchandise to our stores, fulfillment centers and customers.

A material disruption in our

We rely extensively on our information technology systems and related personnel to collect, analyze, process, store, manage, transmit and protect transactions summarize results and managedata. Some of these systems are managed or provided by third-party service providers, including certain cloud platform providers. In managing our business. Ourbusiness, we also rely heavily on the integrity and security of, and consistent access to, this operational and financial data for information such as sales, customer data, employee data, demand forecasting, merchandise ordering, inventory replenishment, supply chain management, payment processing, order fulfillment, customer service, and post-purchase matters. For these information technology systems, applications and processes to operate effectively, we or our service providers must maintain and update them. Delays in the maintenance, updates, upgrading or patching of these systems, applications or processes could impair, and on occasion have impaired, their effectiveness or expose us to security risks.

Our systems and the third-party systems with which we interact are subject to, and on occasion have experienced, damage or interruption from a number of causes, including power and other critical infrastructure outages, computer and telecommunications failures, computer viruses, cyber-attacksecurity breaches, internal or other security breaches,external data theft or misuse, cyberattacks, responsive containment measures by us that may involve voluntarily taking systems off line, natural disasters and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes or other extreme weather events, public health concerns such as pandemics, military conflicts, acts of war, terrorism or terrorism,civil unrest, other systems outages, inadequate or ineffective redundancy, and design or usage errors or malfeasance by our employees. Ifemployees, contractors or third-party service providers. Although we and our third-party service providers seek to maintain our respective systems effectively and to successfully address the risk of compromise of the integrity, security and consistent operations of these systems, these efforts are not always successful. As a result, we or our service providers could experience errors, interruptions, delays or cessations of service in key portions of our information technology systems are damagedinfrastructure, which could significantly disrupt our operations or cease to function properly, including a material disruption inimpair data security, impact our ability to authorizeoperate or access communications, financial or banking systems, be costly, time consuming and process transactions atresource-intensive to remedy and adversely impact our storesreputation and relationship with customers, suppliers, shareholders or on our online systems, we may haveregulators.

We are making, and expect to continue to make, a significant investment to fix or replace them, and we may suffer loss of critical data and interruptions or delays in our operations. Any material interruptionsubstantial investments in our information technology systems, could negatively affect ourinfrastructure and personnel, in some cases with the assistance of strategic partners and other third-party service providers. These investments involve replacing existing systems, some of which are older, legacy systems, outsourcing certain technology and business processes to third-party service providers, including the adoption of Generative AI in certain processes, making changes to existing systems including the migration of applications to the cloud, maintaining or enhancing legacy systems, or designing or acquiring new systems. These efforts can result in significant potential risks, including failure of the systems to operate as designed, potential loss or corruption of data, changes in security processes and resultsinternal controls, cost overruns, implementation delays or errors and disruption of operations.

In addition, COVID-19 may have an adverse impact on

Through our information technology systems, including telecommuting issues associatedwe are able to provide an improved overall shopping experience that empowers our customers to shop and interact with us from a variety of electronic devices and digital platforms. We use our digital platforms as sales channels for our products and services, as methods of providing inspiration and advertising through Macy's Media Network, and as sources of product and other relevant information to our customers to help drive sales. We also have multiple online communities, digital platforms and knowledge centers that allow us to inform, assist and interact with our employee population working remotely or ancustomers. The retail industry is continually evolving and expanding, with a significant increase in online orders due to disruptions or closures of our retail store operations.

If our technology-based e-commerce systems do not function properly, our operating results could be negatively affected.

Customers are increasingly using computers, tablets and smart phones to shopsales initiated online and via mobile applications. We must effectively respond to do pricenew developments and comparison shopping.changing customer preferences with respect to a digital and interconnected experience. We strivecontinually seek to anticipateenhance our online and digital properties to provide an attractive, user-friendly interface for our customers. Disruptions, delays, failures or other performance issues with these customer-facing technology systems, or a failure of these systems to meet our customers’ changingor our customers' expectations, and are focused on building a seamless shopping experience across our omnichannel business. Any failurecould impair the benefits they provide to provide user-friendly, secure e-commerce platforms that offer merchandise and delivery options that resonate with customers’ could place us at a competitive disadvantage, result in the loss of online and other sales, harm our reputation with customers and have a material adverse impact on the growth of our business and negatively affect our operating results.

relationship with our customers and, as a result, our financial performance and results of operations.

Through our sales, marketing activities, and use of third-party information, we collect and store certain non-public personal information that customers provide to purchase products or services, enroll in promotional programs, register on websites, or otherwise communicate to us. This may include phone numbers, driver license numbers, contact preferences, personal information stored on electronic devices, and payment information, including credit and debit card data. We gather and retain information about employees in the normal course of business. We may share information about such personssensitive Company data with vendors that assist with certain aspects of our business.business, such as social media and data analytics firms. In addition, our onlinedigital operations depend upon the transmission of confidential information over the Internet,internet, such as information permitting cashless payments.

We employ safeguards for the protection of this information and have made significant investments to secure access to our information technology network.network, the importance of which has increased due to many of our colleagues working remotely. For instance, we have implemented authentication protocols, installed firewalls and anti-virus/anti-malware software, conducted continuous risk assessments, and established data security breach preparedness and response plans.plans, conduct continuous risk assessments, and mitigate software vulnerability with security patches. We also employ encryption and other methods to protect our data, promote security awareness with our associatesemployees and work with business partners in an effort to create secure and compliant systems.

However, these protections

Protections we have in place to safeguard this information may be compromised as a result of third-party security breaches, burglaries,theft, cyberattacks, including the use of malicious codes, worms, phishing, spyware, denial of service attacks and ransomware errors by employees or employees of third-party vendors, or contractors, misappropriation of data by

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employees, vendors or unaffiliated third-parties, or other irregularities that may result in persons obtaining unauthorized access to companyCompany data.

Retail data frequently targeted by cybercriminals includes consumer credit card data, personally identifiable information, including social security numbers, and health care information. For retailers, point of sale and e-commerce websites are often attacked through compromised credentials, including those obtained through phishing, vishing and credential stuffing. Other methods of attack include advanced malware, the exploitation of software and operating vulnerabilities, and physical device tampering/skimming at card reader units. We believe these attack methods will continue to evolve.

Despite In addition, the risk of cyber-based attacks is heightened with many of our employees working and accessing our technology infrastructure remotely.

Remote work has also created additional challenges to our ability to protect remote workers, corporate networks and cloud environments. We are identifying, tracking and mitigating advanced phishing, malware and attempted credential compromises daily. These attacks are typically occurring on home networks and migrate to the corporate network. However, despite instituting controls for the protection of such information, no commercial or government entity can be entirely free of vulnerability to attack or compromise given that the techniques used to obtain unauthorized access, disable or degrade service change frequently. During the normal coursefrequently and our systems and networks may nevertheless remain vulnerable to threats and attacks. To date, no cybersecurity incident or attack has had a material impact on our business or results of business, we have experienced and expect to continue to experience attempts to compromise our information systems.operations. Unauthorized parties may attempt to gain access to our systems or facilities, or those of third parties with whom we do business, through fraud, trickery, or other forms of deception to employees, contractors, vendors and temporary staff. During the normal course of business, we have experienced and expect to continue to experience attempts to compromise our information systems. We may be unable to protect the integrity of our systems or company data. An alleged or actual unauthorized access or unauthorized disclosure of non-public personal information could:

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