Cover
Cover | 3 Months Ended |
May 04, 2024 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | May 04, 2024 |
Document Transition Report | false |
Entity File Number | 1-13536 |
Entity Registrant Name | Macy's, Inc. |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 13-3324058 |
Entity Address, Address Line One | 151 West 34th Street |
Entity Address, City or Town | New York |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 10001 |
City Area Code | 212 |
Local Phone Number | 494-1621 |
Title of 12(b) Security | Common Stock, $.01 par value per share |
Trading Symbol | M |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 276,411,486 |
Amendment Flag | false |
Document Fiscal Year Focus | 2024 |
Document Fiscal Period Focus | Q1 |
Entity Central Index Key | 0000794367 |
Current Fiscal Year End Date | --02-01 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Income Statement [Abstract] | ||
Net sales | $ 4,846 | $ 4,982 |
Other revenue | 154 | 191 |
Total revenue | 5,000 | 5,173 |
Cost of sales | (2,946) | (2,988) |
Selling, general and administrative expenses | (1,911) | (1,950) |
Gains on sale of real estate | 1 | 11 |
Impairment, restructuring and other costs | (19) | (2) |
Operating income | 125 | 244 |
Benefit plan income, net | 4 | 4 |
Interest expense, net | (31) | (37) |
Income before income taxes | 98 | 211 |
Federal, state and local income tax expense | (36) | (56) |
Net income | $ 62 | $ 155 |
Basic earnings per share (usd per share) | $ 0.22 | $ 0.57 |
Diluted earnings per share (usd per share) | $ 0.22 | $ 0.56 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 62 | $ 155 |
Amortization of net actuarial loss and prior service credit on post employment and postretirement benefit plans included in net income, before tax | 1 | 2 |
Tax effect related to items of other comprehensive income | (1) | (1) |
Total other comprehensive income, net of tax effect | 0 | 1 |
Comprehensive income | $ 62 | $ 156 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | May 04, 2024 | Feb. 03, 2024 | Apr. 29, 2023 |
Current Assets: | |||
Cash and cash equivalents | $ 876 | $ 1,034 | $ 603 |
Receivables | 257 | 293 | 255 |
Merchandise inventories | 4,687 | 4,361 | 4,607 |
Prepaid expenses and other current assets | 442 | 401 | 390 |
Total Current Assets | 6,262 | 6,089 | 5,855 |
Property and Equipment - net of accumulated depreciation and amortization of $4,410, $4,276 and $4,763 | 5,295 | 5,308 | 5,864 |
Right of Use Assets | 2,358 | 2,305 | 2,715 |
Goodwill | 828 | 828 | 828 |
Other Intangible Assets – net | 429 | 430 | 432 |
Other Assets | 1,277 | 1,286 | 1,174 |
Total Assets | 16,449 | 16,246 | 16,868 |
Current Liabilities: | |||
Merchandise accounts payable | 2,347 | 1,913 | 2,415 |
Accounts payable and accrued liabilities | 2,088 | 2,434 | 2,233 |
Income taxes | 115 | 83 | 134 |
Total Current Liabilities | 4,550 | 4,430 | 4,782 |
Long-Term Debt | 2,998 | 2,998 | 2,996 |
Long-Term Lease Liabilities | 3,034 | 2,986 | 2,996 |
Deferred Income Taxes | 749 | 745 | 916 |
Other Liabilities | 932 | 950 | 1,008 |
Shareholders' Equity | 4,186 | 4,137 | 4,170 |
Total Liabilities and Shareholders’ Equity | $ 16,449 | $ 16,246 | $ 16,868 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | May 04, 2024 | Feb. 03, 2024 | Apr. 29, 2023 |
Statement of Financial Position [Abstract] | |||
Accumulated depreciation and amortization | $ 4,410 | $ 4,276 | $ 4,763 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Millions | Total | Inventory Valuation and Obsolescence | [1] | Common Stock | Additional Paid-In Capital | Accumulated Equity | Accumulated Equity Inventory Valuation and Obsolescence | [1] | Treasury Stock | Accumulated Other Comprehensive Income (Loss) |
Beginning balance at Jan. 28, 2023 | $ 4,082 | $ 3 | $ 467 | $ 6,268 | $ (2,038) | $ (618) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 155 | 155 | ||||||||
Other comprehensive income | 1 | 1 | ||||||||
Common stock dividends | (45) | (45) | ||||||||
Stock repurchases | 25 | 25 | ||||||||
Stock-based compensation expense | 14 | 14 | ||||||||
Stock issued under stock plans | (12) | (108) | 96 | |||||||
Ending balance at Apr. 29, 2023 | 4,170 | 3 | 373 | 6,378 | (1,967) | (617) | ||||
Beginning balance at Feb. 03, 2024 | 4,137 | $ 23 | 3 | 352 | 6,190 | $ 23 | (1,912) | (496) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 62 | 62 | ||||||||
Common stock dividends | (48) | (48) | ||||||||
Stock-based compensation expense | 13 | 13 | ||||||||
Stock issued under stock plans | (1) | (71) | 70 | |||||||
Ending balance at May. 04, 2024 | $ 4,186 | $ 3 | $ 294 | $ 6,227 | $ (1,842) | $ (496) | ||||
[1]Represents the cumulative-effect adjustment for the change in inventory valuation method. |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||
Common stock dividends (usd per share) | $ 0.1737 | $ 0.1654 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Cash flows from operating activities: | ||
Net income | $ 62 | $ 155 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Impairment, restructuring and other costs | 19 | 2 |
Depreciation and amortization | 216 | 218 |
Stock-based compensation expense | 13 | 14 |
Gains on sale of real estate | (1) | (11) |
Benefit plans | 1 | 2 |
Amortization of financing costs and premium on acquired debt | 3 | 3 |
Deferred income taxes | (10) | (32) |
Changes in assets and liabilities: | ||
Decrease in receivables | 35 | 45 |
Increase in merchandise inventories | (273) | (340) |
(Increase) decrease in prepaid expenses and other current assets | (49) | 32 |
Increase in merchandise accounts payable | 401 | 374 |
Decrease in accounts payable and accrued liabilities | (289) | (415) |
Increase in current income taxes | 34 | 82 |
Change in other assets and liabilities | (33) | (24) |
Net cash provided by operating activities | 129 | 105 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (154) | (215) |
Capitalized software | (75) | (81) |
Disposition of property and equipment | 4 | 25 |
Other, net | 8 | 1 |
Net cash used by investing activities | (217) | (270) |
Cash flows from financing activities: | ||
Debt repaid | (1) | (1) |
Dividends paid | (48) | (45) |
Decrease in outstanding checks | (21) | (13) |
Acquisition of treasury stock | 0 | (35) |
Net cash used by financing activities | (70) | (94) |
Net decrease in cash, cash equivalents and restricted cash | (158) | (259) |
Cash, cash equivalents and restricted cash beginning of period | 1,037 | 865 |
Cash, cash equivalents and restricted cash end of period | 879 | 606 |
Supplemental cash flow information: | ||
Interest paid | 59 | 60 |
Interest received | 12 | 11 |
Income taxes paid, net of refunds received | 12 | 6 |
Restricted cash, end of period | $ 3 | $ 3 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | May 04, 2024 | Apr. 29, 2023 |
Statement of Cash Flows [Abstract] | ||
Restricted cash, end of period | $ 3 | $ 3 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 3 Months Ended |
May 04, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Nature of Operations Macy's, Inc., together with its subsidiaries (the "Company"), is an omni-channel retail organization operating stores, websites and mobile applications under three nameplates (Macy's, Bloomingdale's and Bluemercury) that sell a wide range of merchandise, including apparel and accessories (men's, women's and kids'), cosmetics, home furnishings and other consumer goods. The Company has stores in 43 states, the District of Columbia, Puerto Rico and Guam. As of May 4, 2024, the Company's operations and operating segments were conducted through Macy's (both mainbox and small format), Macy's Backstage, Bloomingdale's, Bloomingdale's The Outlet, Bloomie's, and Bluemercury. Bloomingdale's in Dubai, United Arab Emirates and Al Zahra, Kuwait are operated under a license agreement with Al Tayer Insignia, a company of Al Tayer Group, LLC. A description of the Company's significant accounting policies is included in the Company's Annual Report on Form 10-K for the fiscal year ended February 3, 2024 (the "2023 10-K"). The accompanying Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto in the 2023 10-K. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions are subject to inherent uncertainties which may result in actual amounts differing from reported amounts. The Consolidated Financial Statements for the 13 weeks ended May 4, 2024 and April 29, 2023, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly, in all material respects, the consolidated financial position and results of operations of the Company. Seasonality Because of the seasonal nature of the retail business, the results of operations for the 13 weeks ended May 4, 2024 and April 29, 2023 (which do not include the holiday season) are not necessarily indicative of such results for the full fiscal year. Merchandise Inventories On February 4, 2024, the Company changed its inventory valuation method. Previously, inventories were principally valued at lower of cost or market using the last-in, first-out (LIFO) retail inventory method (RIM). Commencing in fiscal 2024, inventories are valued at the lower of cost or market using the LIFO cost method. The LIFO cost method is preferable as compared to LIFO RIM because it will improve the cost accuracy and transparency of inventory at the unit level and will better allow the organization to evaluate selling margin realized on each sale. Additionally, it is consistent with the practices of many other retailers, improving comparability. Reported results for periods prior to fiscal 2024 have not been restated due to impracticability as the Company’s systems did not capture historical period-specific information necessary to value the inventory under the cost method. The impact of the change in accounting method had an immaterial effect on the Consolidated Financial Statements as of February 4, 2024. Under the LIFO cost method, the item-cost method is used to determine inventory cost before the application of any LIFO adjustment, as necessary. This method involves assigning costs to each item individually based on the actual purchase costs of that item. The Company continuously monitors whether the carrying cost of inventory exceeds its market value. Excess inventories may be disposed of through the normal course of business. The Company writes down the carrying value of inventories that are not expected to be sold at or above cost based on historical results. Comprehensive Income Total comprehensive income represents the change in equity during a period from sources other than transactions with shareholders and, as such, includes net income. For the Company, the only other components of total comprehensive income for the 13 weeks ended May 4, 2024 and April 29, 2023 relate to post employment and postretirement plan items. Settlement charges incurred are included as a separate component of income before income taxes in the Consolidated Statements of Income. Amortization reclassifications out of accumulated other comprehensive income (loss) are included in the computation of net periodic benefit cost (income) and are included in benefit plan income, net on the Consolidated Statements of Income. See Note 5, "Retirement Plans," for further information. Recent Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this update enhance segment reporting by expanding the breadth and frequency of segment disclosures required by public entities. Most notable, registrants will be required to disclose: (1) significant segment expenses regularly provided to the Chief Operating Decisions Maker ("CODM") and included within the reported measure(s) of a segment's profit or loss, (2) the amount and composition of other segment items, (3) how the CODM uses the reported measure(s) of a segment's profit or loss to assess segment performance and decide how to allocate resources, (4) on an interim basis, all segment profit or loss and asset disclosures currently required annually by Topic 280, as well as those introduced by the ASU, and (5) the CODM's title and position. ASU 2023-07 is effective for the Company beginning in the fiscal year ending February 1, 2025. The Company is currently evaluating the impacts of the adoption of ASU 2023-07. In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" (ASU 2023-09). The amendments in this update enhance the transparency and decision usefulness of income tax disclosures, primarily through improvements to the rate reconciliation and income taxes paid information, specifically requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation, and (2) income taxes paid disaggregation by jurisdiction. These amendments allow investors to better assess how an entity's operations and tax related risks and planning affects its income tax rate and prospects for future cash flows. ASU 2023-09 is effective for the Company beginning in the fiscal year ending January 31, 2026. The Company is currently evaluating the impacts of the adoption of ASU 2023-09. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
May 04, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: 13 Weeks Ended May 4, 2024 April 29, 2023 Net Income Shares Net Income Shares (millions, except per share data) Net income and average number of shares outstanding $ 62 275.2 $ 155 272.2 Shares to be issued under deferred compensation and other plans 0.9 0.9 $ 62 276.1 $ 155 273.1 Basic earnings per share $ 0.22 $ 0.57 Effect of dilutive securities: Stock options and restricted stock units 4.9 4.7 $ 62 281.0 $ 155 277.8 Diluted earnings per share $ 0.22 $ 0.56 In addition to the stock options and restricted stock units reflected in the foregoing table, stock options to purchase 7.8 million and 10.0 million shares of common stock and restricted stock units relating to 3.0 million and 5.4 million shares of common stock were outstanding at May 4, 2024 and April 29, 2023, respectively, but were not included in the computation of diluted earnings per share because their inclusion would have been antidilutive or they were subject to performance conditions that had not been met. |
Revenue
Revenue | 3 Months Ended |
May 04, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Net sales, which mainly consist of retail sales but also include merchandise returns, gift cards and loyalty programs, represented 97% and 96% of total revenue for the 13 weeks ended May 4, 2024 and April 29, 2023, respectively. Other revenue generating activities consist of credit card revenues as well as Macy's Media Network revenue. 13 Weeks Ended Revenues May 4, 2024 April 29, 2023 (millions) Women's Accessories, Shoes, Cosmetics and Fragrances $ 2,070 $ 2,025 Women's Apparel 1,145 1,150 Men's and Kids' 981 1,018 Home/Other (a) 650 789 Total Net Sales 4,846 4,982 Credit card revenues, net $ 117 $ 162 Macy's Media Network revenue, net (b) 37 29 Other Revenue 154 191 Total Revenue $ 5,000 $ 5,173 (a) Other primarily includes restaurant sales, allowance for merchandise returns adjustments and breakage income from unredeemed gift cards. (b) Macy's Media Network ("MMN") is an in-house media platform supporting both Macy's and Bloomingdale's customers through a broad variety of advertising formats running both on owned and operated platforms as well as offsite. Macy's accounted for 84% of the Company's net sales for the 13 weeks ended May 4, 2024 and 85% for the 13 weeks ended April 29, 2023. In addition, digital sales accounted for 32% of the Company's net sales for each of the 13 weeks ended May 4, 2024 and April 29, 2023. Retail Sales Retail sales include merchandise sales, inclusive of delivery income, licensed department income, Marketplace income, sales of private brand goods directly to third party retailers and sales of excess inventory to third parties. Sales of merchandise are recorded at point of sale for in-store purchases or the time of shipment to the customer for digital purchases and are reported net of estimated merchandise returns and certain customer incentives. Commissions earned on sales generated by licensed departments and Marketplace are included as a component of total net sales and are recognized as revenue at the time merchandise is sold to customers. Service revenues (e.g., alteration and cosmetic services) are recorded at the time the customer receives the benefit of the service. The Company has elected to present sales taxes on a net basis and sales taxes are included in accounts payable and accrued liabilities until remitted to the taxing authorities. Merchandise Returns The Company estimates merchandise returns using historical data and recognizes an allowance that reduces net sales and cost of sales. The liability for merchandise returns is included in accounts payable and accrued liabilities on the Company's Consolidated Balance Sheets and was $193 million, $136 million and $214 million as of May 4, 2024, February 3, 2024 and April 29, 2023, respectively. Included in prepaid expenses and other current assets is an asset totaling $116 million, $83 million and $127 million as of May 4, 2024, February 3, 2024 and April 29, 2023, respectively, for the recoverable cost of merchandise estimated to be returned by customers. Gift Cards and Customer Loyalty Programs The Company only offers no-fee, non-expiring gift cards to its customers. At the time gift cards are sold or issued, no revenue is recognized; rather, the Company records an accrued liability to customers. The liability is relieved, and revenue is recognized, equal to the amount redeemed at the time gift cards are redeemed for merchandise. The Company records revenue from unredeemed gift cards (breakage) in net sales on a pro-rata basis over the time period gift cards are actually redeemed. At least three years of historical data, updated annually, is used to determine actual redemption patterns. The Company maintains customer loyalty programs in which customers earn points based on their purchases. Under the Macy's Star Rewards loyalty program, points are earned based on customers' spending on Macy's private label and co-branded credit cards as well as non-proprietary cards and other forms of tender. Bloomingdale's Loyallist and Bluemercury BlueRewards programs provide tender neutral points-based programs to their customers. The Company recognizes the estimated net amount of the rewards that will be earned and redeemed as a reduction to net sales at the time of the initial transaction and as tender when the points are subsequently redeemed by a customer. The liability for unredeemed gift cards and customer loyalty programs is included in accounts payable and accrued liabilities on the Company's Consolidated Balance Sheets and was $349 million, $384 million and $360 million as of May 4, 2024, February 3, 2024 and April 29, 2023, respectively. Credit Card Revenues In 2005, in connection with the sale of most of the Company's credit card accounts and related receivable balances to Citibank, the Company and Citibank entered into a long-term marketing and servicing alliance pursuant to the terms of a 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"). The changes to the Credit Card Program's financial structure are not materially different from its previous terms. As part of the Program Agreement, the Company receives payments for providing a combination of interrelated services and intellectual property to Citibank in support of the underlying Credit Card Program. Revenue based on the spending activity of the underlying accounts is recognized as the respective card purchases occur and the Company's profit share is recognized based on the performance of the underlying portfolio. Revenue associated with the establishment of new credit accounts and assisting in the receipt of payments for existing accounts is recognized as such activities occur. Credit card revenues include finance charges, late fees and other revenue generated by the Company’s Credit Card Program, net of fraud losses and expenses associated with establishing new accounts, credit card funding costs and bad debt reserves and are a component of other revenue on the consolidated statements of income. The Program Agreement expires March 31, 2030, subject to an additional renewal term of three years. The Program Agreement provides for, among other things, (i) the ownership by Citibank of the accounts purchased by Citibank, (ii) the ownership by Citibank of new accounts opened by the Company’s customers, (iii) the provision of credit by Citibank to the holders of the credit cards associated with the foregoing accounts, (iv) the servicing of the foregoing accounts, and (v) the allocation between Citibank and the Company of the economic benefits and burdens associated with the foregoing and other aspects of the alliance. Pursuant to the Program Agreement, the Company continues to provide certain servicing functions related to the accounts and related receivables owned by Citibank and receives compensation from Citibank for these services. The amounts earned under the Program Agreement related to the servicing functions are deemed adequate compensation and, accordingly, no servicing asset or liability has been recorded on the Consolidated Balance Sheets. |
Financing Activities
Financing Activities | 3 Months Ended |
May 04, 2024 | |
Debt Disclosure [Abstract] | |
Financing Activities | Financing Activities The Company did not borrow or repay any debt, outside of capital lease activity, during both the 13 weeks ended May 4, 2024 and April 29, 2023. As of May 4, 2024 and April 29, 2023, the Company had $144 million and $138 million of standby letters of credit outstanding under its ABL Credit Facility, respectively, which reduced the available borrowing capacity to $2,856 million and $2,862 million, respectively. The Company had no outstanding borrowings under the ABL Credit Facility as of May 4, 2024 and April 29, 2023. |
Retirement Plans
Retirement Plans | 3 Months Ended |
May 04, 2024 | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |
Retirement Plans | Retirement Plans The Company has defined contribution plans that cover substantially all employees who work 1,000 hours or more in a year. In addition, the Company has a funded defined benefit plan ("Pension Plan") and an unfunded defined benefit supplementary retirement plan ("SERP"), which provides benefits, for certain employees, in excess of qualified plan limitations. Effective January 1, 2012, the Pension Plan was closed to new participants, with limited exceptions, and effective January 2, 2012, the SERP was closed to new participants. In February 2013, the Company announced changes to the Pension Plan and SERP whereby eligible employees no longer earn future pension service credits after December 31, 2013, with limited exceptions. All retirement benefits attributable to service in subsequent periods are provided through defined contribution plans. In addition, certain retired employees currently are provided with specified health care and life insurance benefits ("Postretirement Obligations"). Eligibility requirements for such benefits vary, but generally state that benefits are available to eligible employees who were hired prior to a certain date and retire after a certain age with specified years of service. Certain employees are subject to having such benefits modified or terminated. The defined contribution plan expense and actuarially determined components of the net periodic benefit cost (income) associated with the defined benefit plans are as follows: 13 Weeks Ended May 4, 2024 April 29, 2023 (millions) 401(k) Qualified Defined Contribution Plan $ 23 $ 23 Pension Plan Interest cost $ 18 $ 22 Expected return on assets (29) (34) Recognition of net actuarial loss 1 2 $ (10) $ (10) Supplementary Retirement Plan Interest cost $ 5 $ 5 Recognition of net actuarial loss 2 2 $ 7 $ 7 Total Retirement Expense $ 20 $ 20 Postretirement Obligations Interest cost $ 1 $ 1 Recognition of net actuarial gain (2) (2) $ (1) $ (1) |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
May 04, 2024 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company's financial assets are required to be measured at fair value on a recurring basis, by level within the hierarchy as defined by applicable accounting standards. Level 1: Quoted prices in active markets for identical assets Level 2: Significant observable inputs for the assets Level 3: Significant unobservable inputs for the assets The following table shows the estimated fair value of the Company's marketable equity and debt securities: Fair Value Measurements Total Level 1 Level 2 Level 3 (millions) May 4, 2024 $ 36 $ 36 $ — $ — February 3, 2024 42 42 — — April 29, 2023 36 36 — — Other financial instruments not measured at fair value on a recurring basis include cash and cash equivalents, receivables, certain short-term investments and other assets, short-term debt, merchandise accounts payable, accounts payable and accrued liabilities and long-term debt. With the exception of long-term debt, the carrying amount of these financial instruments approximates fair value because of the short maturity of these instruments. The fair values of long-term debt, excluding capitalized leases, are generally estimated based on quoted market prices for identical or similar instruments, and are classified as Level 2 measurements within the hierarchy as defined by applicable accounting standards. The following table shows the estimated fair value of the Company's long-term debt: Notional Carrying Fair (millions) May 4, 2024 $ 3,007 $ 2,998 $ 2,766 February 3, 2024 3,007 2,998 2,706 April 29, 2023 3,007 2,996 2,468 |
Supplier Finance Programs
Supplier Finance Programs | 3 Months Ended |
May 04, 2024 | |
Payables and Accruals [Abstract] | |
Supplier Finance Programs | Supplier Finance Programs The Company has agreements with third-party financial institutions to facilitate supply chain finance ("SCF") programs. The programs allow qualifying suppliers to sell their receivables, on an invoice level at the selection of the supplier, from the Company to the financial institution and negotiate their outstanding receivable arrangements and associated fees directly with the financial institution. Macy's, Inc. is not party to the agreements between the supplier and the financial institution. The supplier invoices that have been confirmed as valid under the SCF programs require payment in full by the financial institution to the supplier by the original maturity date of the invoice, or discounted payment at an earlier date as agreed upon with the supplier. The Company's obligations to its suppliers, including amounts due and scheduled payment terms, are not impacted by a supplier’s participation in the SCF programs. All outstanding amounts related to suppliers participating in the SCF programs are recorded upon confirmation with the third-party institutions in merchandise accounts payable May 4, 2024, February 3, 2024 and April 29, 2023 were $125 million, $112 million and $102 million, respectively. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Pay vs Performance Disclosure | ||
Net income | $ 62 | $ 155 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
May 04, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
May 04, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions are subject to inherent uncertainties which may result in actual amounts differing from reported amounts. The Consolidated Financial Statements for the 13 weeks ended May 4, 2024 and April 29, 2023, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly, in all material respects, the consolidated financial position and results of operations of the Company. |
Seasonality | Seasonality Because of the seasonal nature of the retail business, the results of operations for the 13 weeks ended May 4, 2024 and April 29, 2023 (which do not include the holiday season) are not necessarily indicative of such results for the full fiscal year. |
Comprehensive Income | Comprehensive Income |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this update enhance segment reporting by expanding the breadth and frequency of segment disclosures required by public entities. Most notable, registrants will be required to disclose: (1) significant segment expenses regularly provided to the Chief Operating Decisions Maker ("CODM") and included within the reported measure(s) of a segment's profit or loss, (2) the amount and composition of other segment items, (3) how the CODM uses the reported measure(s) of a segment's profit or loss to assess segment performance and decide how to allocate resources, (4) on an interim basis, all segment profit or loss and asset disclosures currently required annually by Topic 280, as well as those introduced by the ASU, and (5) the CODM's title and position. ASU 2023-07 is effective for the Company beginning in the fiscal year ending February 1, 2025. The Company is currently evaluating the impacts of the adoption of ASU 2023-07. In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" (ASU 2023-09). The amendments in this update enhance the transparency and decision usefulness of income tax disclosures, primarily through improvements to the rate reconciliation and income taxes paid information, specifically requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation, and (2) income taxes paid disaggregation by jurisdiction. These amendments allow investors to better assess how an entity's operations and tax related risks and planning affects its income tax rate and prospects for future cash flows. ASU 2023-09 is effective for the Company beginning in the fiscal year ending January 31, 2026. The Company is currently evaluating the impacts of the adoption of ASU 2023-09. |
Revenue | Retail Sales Retail sales include merchandise sales, inclusive of delivery income, licensed department income, Marketplace income, sales of private brand goods directly to third party retailers and sales of excess inventory to third parties. Sales of merchandise are recorded at point of sale for in-store purchases or the time of shipment to the customer for digital purchases and are reported net of estimated merchandise returns and certain customer incentives. Commissions earned on sales generated by licensed departments and Marketplace are included as a component of total net sales and are recognized as revenue at the time merchandise is sold to customers. Service revenues (e.g., alteration and cosmetic services) are recorded at the time the customer receives the benefit of the service. The Company has elected to present sales taxes on a net basis and sales taxes are included in accounts payable and accrued liabilities until remitted to the taxing authorities. Merchandise Returns The Company estimates merchandise returns using historical data and recognizes an allowance that reduces net sales and cost of sales. The liability for merchandise returns is included in accounts payable and accrued liabilities on the Company's Consolidated Balance Sheets and was $193 million, $136 million and $214 million as of May 4, 2024, February 3, 2024 and April 29, 2023, respectively. Included in prepaid expenses and other current assets is an asset totaling $116 million, $83 million and $127 million as of May 4, 2024, February 3, 2024 and April 29, 2023, respectively, for the recoverable cost of merchandise estimated to be returned by customers. Gift Cards and Customer Loyalty Programs The Company only offers no-fee, non-expiring gift cards to its customers. At the time gift cards are sold or issued, no revenue is recognized; rather, the Company records an accrued liability to customers. The liability is relieved, and revenue is recognized, equal to the amount redeemed at the time gift cards are redeemed for merchandise. The Company records revenue from unredeemed gift cards (breakage) in net sales on a pro-rata basis over the time period gift cards are actually redeemed. At least three years of historical data, updated annually, is used to determine actual redemption patterns. The Company maintains customer loyalty programs in which customers earn points based on their purchases. Under the Macy's Star Rewards loyalty program, points are earned based on customers' spending on Macy's private label and co-branded credit cards as well as non-proprietary cards and other forms of tender. Bloomingdale's Loyallist and Bluemercury BlueRewards programs provide tender neutral points-based programs to their customers. The Company recognizes the estimated net amount of the rewards that will be earned and redeemed as a reduction to net sales at the time of the initial transaction and as tender when the points are subsequently redeemed by a customer. The liability for unredeemed gift cards and customer loyalty programs is included in accounts payable and accrued liabilities on the Company's Consolidated Balance Sheets and was $349 million, $384 million and $360 million as of May 4, 2024, February 3, 2024 and April 29, 2023, respectively. Credit Card Revenues In 2005, in connection with the sale of most of the Company's credit card accounts and related receivable balances to Citibank, the Company and Citibank entered into a long-term marketing and servicing alliance pursuant to the terms of a 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"). The changes to the Credit Card Program's financial structure are not materially different from its previous terms. As part of the Program Agreement, the Company receives payments for providing a combination of interrelated services and intellectual property to Citibank in support of the underlying Credit Card Program. Revenue based on the spending activity of the underlying accounts is recognized as the respective card purchases occur and the Company's profit share is recognized based on the performance of the underlying portfolio. Revenue associated with the establishment of new credit accounts and assisting in the receipt of payments for existing accounts is recognized as such activities occur. Credit card revenues include finance charges, late fees and other revenue generated by the Company’s Credit Card Program, net of fraud losses and expenses associated with establishing new accounts, credit card funding costs and bad debt reserves and are a component of other revenue on the consolidated statements of income. The Program Agreement expires March 31, 2030, subject to an additional renewal term of three years. The Program Agreement provides for, among other things, (i) the ownership by Citibank of the accounts purchased by Citibank, (ii) the ownership by Citibank of new accounts opened by the Company’s customers, (iii) the provision of credit by Citibank to the holders of the credit cards associated with the foregoing accounts, (iv) the servicing of the foregoing accounts, and (v) the allocation between Citibank and the Company of the economic benefits and burdens associated with the foregoing and other aspects of the alliance. Pursuant to the Program Agreement, the Company continues to provide certain servicing functions related to the accounts and related receivables owned by Citibank and receives compensation from Citibank for these services. The amounts earned under the Program Agreement related to the servicing functions are deemed adequate compensation and, accordingly, no servicing asset or liability has been recorded on the Consolidated Balance Sheets. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
May 04, 2024 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share: 13 Weeks Ended May 4, 2024 April 29, 2023 Net Income Shares Net Income Shares (millions, except per share data) Net income and average number of shares outstanding $ 62 275.2 $ 155 272.2 Shares to be issued under deferred compensation and other plans 0.9 0.9 $ 62 276.1 $ 155 273.1 Basic earnings per share $ 0.22 $ 0.57 Effect of dilutive securities: Stock options and restricted stock units 4.9 4.7 $ 62 281.0 $ 155 277.8 Diluted earnings per share $ 0.22 $ 0.56 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
May 04, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Sales From Merchandise Category | Other revenue generating activities consist of credit card revenues as well as Macy's Media Network revenue. 13 Weeks Ended Revenues May 4, 2024 April 29, 2023 (millions) Women's Accessories, Shoes, Cosmetics and Fragrances $ 2,070 $ 2,025 Women's Apparel 1,145 1,150 Men's and Kids' 981 1,018 Home/Other (a) 650 789 Total Net Sales 4,846 4,982 Credit card revenues, net $ 117 $ 162 Macy's Media Network revenue, net (b) 37 29 Other Revenue 154 191 Total Revenue $ 5,000 $ 5,173 (a) Other primarily includes restaurant sales, allowance for merchandise returns adjustments and breakage income from unredeemed gift cards. (b) |
Retirement Plans (Tables)
Retirement Plans (Tables) | 3 Months Ended |
May 04, 2024 | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |
Summary of Costs of Retirement Plans | The defined contribution plan expense and actuarially determined components of the net periodic benefit cost (income) associated with the defined benefit plans are as follows: 13 Weeks Ended May 4, 2024 April 29, 2023 (millions) 401(k) Qualified Defined Contribution Plan $ 23 $ 23 Pension Plan Interest cost $ 18 $ 22 Expected return on assets (29) (34) Recognition of net actuarial loss 1 2 $ (10) $ (10) Supplementary Retirement Plan Interest cost $ 5 $ 5 Recognition of net actuarial loss 2 2 $ 7 $ 7 Total Retirement Expense $ 20 $ 20 Postretirement Obligations Interest cost $ 1 $ 1 Recognition of net actuarial gain (2) (2) $ (1) $ (1) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
May 04, 2024 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |
Summary of Fair Value of Plan Assets Measured on a Recurring Basis | The Company's financial assets are required to be measured at fair value on a recurring basis, by level within the hierarchy as defined by applicable accounting standards. Level 1: Quoted prices in active markets for identical assets Level 2: Significant observable inputs for the assets Level 3: Significant unobservable inputs for the assets The following table shows the estimated fair value of the Company's marketable equity and debt securities: Fair Value Measurements Total Level 1 Level 2 Level 3 (millions) May 4, 2024 $ 36 $ 36 $ — $ — February 3, 2024 42 42 — — April 29, 2023 36 36 — — |
Summary of Estimated Fair Values of Company's Long Term Debt | The following table shows the estimated fair value of the Company's long-term debt: Notional Carrying Fair (millions) May 4, 2024 $ 3,007 $ 2,998 $ 2,766 February 3, 2024 3,007 2,998 2,706 April 29, 2023 3,007 2,996 2,468 |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies - Narrative (Details) | May 04, 2024 state |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of states in which entity operates | 43 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Earnings Per Share [Abstract] | ||
Net income | $ 62 | $ 155 |
Net income available to common stockholders, basic | $ 62 | $ 155 |
Basic earnings per share (usd per share) | $ 0.22 | $ 0.57 |
Weighted average number of shares issued, basic (in shares) | 275.2 | 272.2 |
Shares to be issued under deferred compensation and other plans (in shares) | 0.9 | 0.9 |
Average number of shares outstanding, basic (in shares) | 276.1 | 273.1 |
Effect of dilutive securities: | ||
Net income available to common stockholders, diluted | $ 62 | $ 155 |
Diluted earnings per share (usd per share) | $ 0.22 | $ 0.56 |
Stock options and restricted stock units (in shares) | 4.9 | 4.7 |
Average number of shares outstanding, diluted (in shares) | 281 | 277.8 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Employee Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings (in shares) | 7.8 | 10 |
Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings (in shares) | 3 | 5.4 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
May 04, 2024 | Apr. 29, 2023 | Feb. 03, 2024 | |
Disaggregation of Revenue [Line Items] | |||
Percentage of net sales revenue | 97% | 96% | |
Macy's sales to total company sales percentage | 84% | 85% | |
Percentage of digital sales | 32% | 32% | |
Contract with customer, refund liability | $ 193 | $ 214 | $ 136 |
Contract with customer, right to recover product | 116 | 127 | 83 |
Contract with customer, liability, current | $ 349 | $ 360 | $ 384 |
Credit Card Intermediary | |||
Disaggregation of Revenue [Line Items] | |||
Agreement renewal option number of years | 3 years |
Revenue - Sales From Merchandis
Revenue - Sales From Merchandise Category (Details) - USD ($) $ in Millions | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 4,846 | $ 4,982 |
Other Revenue | 154 | 191 |
Total revenue | 5,000 | 5,173 |
Women's Accessories, Shoes, Cosmetics and Fragrances | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2,070 | 2,025 |
Women's Apparel | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,145 | 1,150 |
Men's and Kids' | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 981 | 1,018 |
Home/Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 650 | 789 |
Credit card revenues, net | ||
Disaggregation of Revenue [Line Items] | ||
Other Revenue | 117 | 162 |
Macy's Media Network revenue, net | ||
Disaggregation of Revenue [Line Items] | ||
Other Revenue | $ 37 | $ 29 |
Financing Activities (Details)
Financing Activities (Details) - USD ($) | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Debt Instrument [Line Items] | ||
Stock repurchased (in shares) | 0 | 1,400,000 |
Stock repurchases | $ 25,000,000 | |
Revolving Credit Facility | Revolving A B L Facility | ||
Debt Instrument [Line Items] | ||
Letters of credit outstanding | $ 144,000,000 | 138,000,000 |
Line of credit facility, remaining borrowing capacity | 2,856,000,000 | 2,862,000,000 |
Revolving Credit Facility | Revolving A B L Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Amount outstanding under credit facility | $ 0 | $ 0 |
Retirement Plans - Narrative (D
Retirement Plans - Narrative (Details) | 3 Months Ended |
May 04, 2024 hour | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |
Number of hours required for participation in defined benefit and defined contribution plans | 1,000 |
Retirement Plans - Net Periodic
Retirement Plans - Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
May 04, 2024 | Apr. 29, 2023 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Total Retirement Expense | $ 20 | $ 20 |
Other Postretirement Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | 1 | 1 |
Recognition of net actuarial loss | (2) | (2) |
Total net periodic benefit cost | (1) | (1) |
Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | 18 | 22 |
Expected return on assets | (29) | (34) |
Recognition of net actuarial loss | 1 | 2 |
Total net periodic benefit cost | (10) | (10) |
Supplementary Retirement Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | 5 | 5 |
Recognition of net actuarial loss | 2 | 2 |
Total net periodic benefit cost | 7 | 7 |
Defined Contribution Qualified Plan | Other Postretirement Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
401(k) Qualified Defined Contribution Plan | $ 23 | $ 23 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets Measured At Fair Value On A Recurring and Nonrecurring Basis (Details) - USD ($) $ in Millions | May 04, 2024 | Feb. 03, 2024 | Apr. 29, 2023 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Marketable equity and debt securities | $ 36 | $ 42 | $ 36 |
Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Marketable equity and debt securities | 36 | 42 | 36 |
Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Marketable equity and debt securities | 0 | 0 | 0 |
Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Marketable equity and debt securities | $ 0 | $ 0 | $ 0 |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated Fair Value Of Company Long Term Debt (Details) - USD ($) $ in Millions | May 04, 2024 | Feb. 03, 2024 | Apr. 29, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Notional Amount | $ 3,007 | $ 3,007 | $ 3,007 |
Carrying Amount | 2,998 | 2,998 | 2,996 |
Fair Value | $ 2,766 | $ 2,706 | $ 2,468 |
Supplier Finance Programs (Deta
Supplier Finance Programs (Details) - USD ($) $ in Millions | May 04, 2024 | Feb. 03, 2024 | Apr. 29, 2023 |
Payables and Accruals [Abstract] | |||
Supplier Finance Program, Obligation, Current, Statement of Financial Position [Extensible Enumeration] | Merchandise accounts payable | Merchandise accounts payable | Merchandise accounts payable |
Supplier finance program, confirmed obligation | $ 125 | $ 112 | $ 102 |