Log in
Log in
Or log in with
GoogleGoogle
Twitter Twitter
Facebook Facebook
Apple Apple     
Sign up
Or log in with
GoogleGoogle
Twitter Twitter
Facebook Facebook
Apple Apple     

MACY'S, INC.

(M)
  Report
Delayed Nyse  -  04:00:02 2023-02-03 pm EST
24.46 USD   +0.20%
02/03Fitch Downgrades Three Classes of GSMS 2013-G1
AQ
02/03DBRS Morningstar Confirms All Classes of COMM 2014-CCRE21 Mortgage Trust
AQ
02/03DBRS Morningstar Confirms Ratings on JP Morgan Chase Commercial Mortgage Securities Trust 2011-C3
AQ
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisionsFunds 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

MACY'S, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

11/30/2022 | 04:14pm EST
For purposes of the following discussion, all references to "third quarter of
2022" and "third quarter of 2021" are to the Company's 13-week fiscal periods
ended October 29, 2022 and October 30, 2021, respectively. References to "2022"
and "2021" are to the Company's 39-week fiscal periods ended October 29, 2022
and October 30, 2021, respectively.

The following discussion should be read in conjunction with the Consolidated
Financial Statements and the related notes included elsewhere in this report, as
well as the financial and other information included in the 2021 10-K. The
following discussion contains forward-looking statements that reflect the
Company's plans, estimates and beliefs. The Company's actual results could
materially differ from those discussed in these forward-looking statements.
Factors that could cause or contribute to those differences include, but are not
limited to, those discussed below and elsewhere in this report (particularly in
"Risk Factors" and in "Forward-Looking Statements") and in the 2021 10-K
(particularly in "Risk Factors" and in "Forward-Looking Statements"). This
discussion includes Non-GAAP financial measures. For information about these
measures, see the disclosure under the caption "Important Information Regarding
Non-GAAP Financial Measures".

Quarterly Overview

Certain financial highlights are as follows:

• Comparable sales for Macy's, Inc. decreased 3.1% on an owned basis; and

decreased 2.7% on an owned plus licensed basis compared to the third quarter

of 2021.

Macy's brand comparable sales decreased 4.4% on an owned basis and
            4.0% on an owned-plus-licensed basis compared to the third quarter of
            2021.

Bloomingdale's comparable sales on an owned basis were up 5.3% and on

            an owned-plus-licensed basis were up 4.1% compared to the third
            quarter of 2021.

Bluemercury comparable sales were up 14.0% on an owned and owned-plus

            licensed basis compared to the third quarter of 2021.


• Digital sales decreased 9% versus the third quarter of 2021. Digital

      penetration was 31% of net sales for the third quarter of 2022, a
      2-percentage point decline from the third quarter of 2021.

• Gross margin was 38.7%, compared to 41.0% in the third quarter of 2021.

• Net credit card revenues were $206 million, down $7 million from the third

quarter of 2021.

• Selling, general and administrative ("SG&A") expense was $2.1 billion, up

$84 million from the third quarter of 2021. SG&A expense as a percent of

sales was 39.3%, 300 basis points higher compared to the third quarter of

2021.

• Net income was $108 million in the third quarter of 2022, compared to $239

million in the third quarter of 2021.

• The third quarter of 2022 had positive earnings before interest, taxes,

depreciation and amortization ("EBITDA") of $392 million compared to EBITDA

of $757 million during the third quarter of 2021. On an adjusted basis,

      EBITDA was $439 million for the third quarter of 2022, compared to $765
      million during the third quarter of 2021.


• Diluted earnings per share and adjusted diluted earnings per share were

$0.39 and $0.52, respectively, during the third quarter of 2022. This

compares to diluted earnings per share and adjusted diluted earnings per

      share of $0.76 and $1.23 for the third quarter of 2021, respectively.


  • Inventory was up 4.3% from the third quarter of 2021.


During the third quarter of 2022, the Company continued to execute its Polaris strategy and these actions impacted its operating results for the period, notably:

• Win With Fashion and Style: By offering a wide assortment of categories,

products and brands from off-price to luxury, the Company continued to reach

a broad and diverse range of customers during the third quarter. The Company

      is committed to providing quality fashion newness through a curation of
      premium owned and market brands, which is brought to life at


                                       15
--------------------------------------------------------------------------------
                                  MACY'S, INC.

Macy's through the Own Your Style platform. Customer shopping trends shifted

into occasion-based categories, such as career and tailored sportswear,

fragrances, shoes, dresses and luggage rather than popular pandemic

categories such as active, casual sportswear, sleepwear and soft home.

• Deliver Clear Value: The Company is leveraging data analytics and pricing

tools to efficiently plan, place and price inventory, including location

level pricing, competitive pricing and point-of-sale ("POS") pricing work.

Throughout the third quarter, the Company maintained a mix of full-price,

promotions and markdown items that, when combined with selectively higher

tickets, resulted in an eighth consecutive quarter of average-unit-retail

improvement. Inventory turn for the trailing 12 months remained relatively

      consistent with 2021.


• Excel in Digital Shopping: While the Company experienced a deceleration in

the growth of its digital channel during the third quarter as consumers

shifted back to in-store shopping, the Company continued to make digital

investments to serve customers' lifestyle needs through the introduction of

personalized and live shopping as well as ongoing refinement of existing

online platforms, including the Company's mobile app, which resulted in an

increase in active app customers of 11% on a trailing 12-month basis. In

addition, Macy's Media Network, an in-house media platform that enables

business-to-business monetization of advertising partnerships, generated net

income of $31 million in the third quarter of 2022, an increase of 21% from

the third quarter of 2021. Finally, the Company launched the Macy's digital

      Marketplace in late September 2022, which features a collection of new
      brands, product and categories from third-party sellers, representing a

pathway to introduce customers to new merchandise options while limiting

      inventory risk.


• Enhance Store Experience: In the third quarter of 2022, consumers continued

      to shift shopping channels from digital to stores as they returned to
      in-store shopping. The Company continues to invest in physical stores to
      support its digitally-led omnichannel business model and build new

capabilities to help make the shopping experience convenient and compelling.

For example, the Company is advancing its off-mall, smaller format stores in

2022 by continuing to open additional locations, including two Market by

Macy's locations that opened in the third quarter of 2022. The Company also

opened an additional Market by Macy's location and a second Bloomie's

location in November 2022. Finally, the Company introduced permanent Toys

"R" Us shops within all Macy's locations during the third quarter with an

encouraging initial response through a 63% increase in toy sales from the

      third quarter of 2021.


• Modernize Supply Chain: The Company has continued to update its supply chain

infrastructure and network, both upstream and downstream, while leveraging

improved data and analytics capabilities in fulfillment strategies to meet

customers' preference for speed and convenience while also improving

inventory placement. The investments to-date have allowed the Company to

strategically bring in seasonal product earlier and provided the added

capacity to chase in-season trends. The Company is expanding and relocating

distribution centers to support business growth and serve the growing

customer base. This includes plans to open a modern, new facility in Texas

in mid-2023 which is expected to continue to support stores in the region.

In addition, the Company plans to open a new fulfillment center in North

      Carolina in 2025.


• Enable Transformation: The Company has continued to modernize its technology

foundations to increase agility in reacting to customers and the market

regardless of the channel in which customers interact. These activities

include increasing the Company's data science and analytics capabilities.

      The Company is committed to continue its transformation efforts by
      attracting and retaining talent through several initiatives designed to
      engage current and potential candidates.



In addition to the pillars of the Polaris strategy above, the Company is
committed to providing value to people, communities and the planet through the
evolution of its Mission Every One social purpose platform. In early November,
the Company launched S.P.U.R. Pathways: Shared Purpose, Unlimited Reach, with
its partner Momentus Capital. S.P.U.R. Pathways is a multi-year, multi-faceted
program that ultimately will provide up to $200 million of funding. The Company
is committed to contribute approximately $30 million over five years to empower
new brands across the Company's network of stores and broaden the Company's
range of suppliers. The funding is designed to advance entrepreneurial growth,
close wealth gaps and address systemic barriers faced by diverse-owned and
underrepresented businesses serving the retail industry.


                                       16
--------------------------------------------------------------------------------
                                  MACY'S, INC.



Results of Operations

                                                    Third Quarter of 2022              Third Quarter of 2021
                                                                    % to Net                           % to Net
                                                  Amount             Sales            Amount            Sales
                                                        (dollars in millions, except per share figures)
Net sales                                       $     5,230                 

$ 5,440

  Increase (decrease) in comparable sales              (3.1 )%                             37.2 %
Credit card revenues, net                               206               3.9 %             213              3.9 %
Cost of sales                                        (3,204 )           (61.3 )%         (3,207 )          (59.0 )%
Selling, general and administrative expenses         (2,057 )           (39.3 )%         (1,973 )          (36.3 )%
Gains on sale of real estate                             32               0.6 %              50              0.9 %
Impairment, restructuring and other costs               (15 )            (0.3 )%              -                -
Operating income                                        192               3.7 %             523              9.6 %

Diluted earnings per share                      $      0.39                        $       0.76

Supplemental Financial Measure
Gross margin (a)                                $     2,026              38.7 %    $      2,233             41.0 %
Digital sales as a percentage of net sales               31 %                                33 %

Supplemental Non-GAAP Financial Measure
Increase (decrease) in comparable sales on an
  owned plus licensed basis                            (2.7 )%                             35.6 %
Adjusted diluted earnings per share             $      0.52                        $       1.23
EBITDA                                          $       392                        $        757
Adjusted EBITDA                                 $       439                        $        765


(a) Gross margin is defined as net sales less cost of sales.



See pages 24 to 26 for reconciliations of the supplemental non-GAAP financial
measures to their most comparable GAAP financial measure and for other important
information.

Comparison of the Third Quarter of 2022 and the Third Quarter of 2021

                                                    Third Quarter of       Third Quarter of
                                                          2022                   2021
Net sales                                           $           5,230      $           5,440
Increase (decrease) in comparable sales                          (3.1 )%                37.2 %
Increase (decrease) in comparable sales on an
owned plus licensed basis                                        (2.7 )%                35.6 %
Digital sales as a percent of net sales                            31 %                   33 %


Net sales for the third quarter of 2022 decreased for Macy's but improved for
Bloomingdale's and bluemercury. During the third quarter of 2022, consumer
shopping behavior continued to shift more towards occasion-based apparel, with
strength in career and tailored sportswear, fragrances, shoes, dresses and
luggage rather than pandemic categories such as active, casual sportswear,
sleepwear and soft home. Digital sales decreased 9% compared to the third
quarter of 2021 as a result of the shift in consumer behavior back to in-store
shopping.


                                                       Third Quarter of 2022       Third Quarter of 2021
Credit card revenues, net                             $                   206     $                   213
Credit card revenues, net as a percent of net sales                       3.9 %                       3.9 %
Proprietary credit card sales penetration                                44.5 %                      43.0 %


Net credit card revenues performance during the third quarter of 2022 was driven
by similar factors to the first half of 2022: the continuation of the strong
credit health of the credit card portfolio's customers, leading to lower levels
of bad debt, higher credit sales and higher spending on the co-brand credit
card.



                                       17
--------------------------------------------------------------------------------
                                  MACY'S, INC.


                            Third Quarter of 2022      Third Quarter of 2021
Cost of sales               $               (3,204 )   $               (3,207 )
As a percent to net sales                     61.3 %                     59.0 %
Gross margin                $                2,026     $                2,233
As a percent to net sales                     38.7 %                     41.0 %


The decrease in the gross margin rate was primarily driven by an increase in
promotional and clearance markdowns to sell through slower moving categories at
Macy's, including casual apparel, soft home, and warmer weather seasonal goods.
This was partially offset by higher average unit retail driven by higher ticket
prices and favorable category mix particularly within occasion-based categories.

                            Third Quarter of 2022      Third Quarter of 2021
SG&A expenses               $               (2,057 )   $               (1,973 )
As a percent to net sales                     39.3 %                     36.3 %


SG&A expenses increased in third quarter of 2022 compared to the third quarter
of 2021 both in dollars and as a percent to net sales. The increase in SG&A
expense dollars and as a percent to net sales corresponds with the Company
filling a significant number of positions that were open in the prior year as
well as adjustments to colleague compensation to remain competitive and attract
the best talent.


                               Third Quarter of 2022      Third Quarter of 2021
Gains on sale of real estate   $                   32     $                 

50

The third quarter of 2022 and 2021 asset sale gains were driven by the $32 million related to the sale of the Macy's Westminster location and $33 million related to the sale of the Macy's Baldwin Hills location, respectively.



                      Third Quarter of 2022      Third Quarter of 2021
Settlement charges   $                   (32 )   $                   (8 )


During the third quarter of 2022 and 2021, the Company recognized non-cash
settlement charges of $32 million and $8 million, respectively, related to the
pro-rata recognition of net actuarial losses associated with the Company's
defined benefit plans and are the result of an increase in lump sum distribution
associated with retiree distribution elections.


                                                    Third Quarter of
                                                          2022             Third Quarter of 2021
Losses on early retirement of debt                  $               -     $                  (185 )


During the third quarter of 2021, the Company recognized $185 million of losses
on early retirement of debt due to the redemption of the entire outstanding $1.3
billion aggregate principal amount of its senior secured notes due 2025.


                        Third Quarter of 2022       Third Quarter of 2021
Net interest expense   $                   (42 )   $                   (53 )


The decrease in net interest expense, excluding losses on early retirement of
debt, was primarily driven by interest savings associated with the financing
activities completed in the first quarter of 2022.

                                 Third Quarter of 2022       Third Quarter of 2021
Effective tax rate                                 13.6 %                      18.7 %
Federal income statutory rate                        21 %                        21 %

The Company's effective tax rate varies from the federal income tax statutory rate of 21% in both periods, primarily driven by the impact of return-to-provision adjustments that were identified in connection with the filing of its U.S. federal income tax returns in the respective periods.

                                       18
--------------------------------------------------------------------------------
                                  MACY'S, INC.



                                                       39 Weeks Ended                    39 Weeks Ended
                                                      October 29, 2022                  October 30, 2021
                                                                   % to Net                        % to Net
                                                 Amount              Sales           Amount         Sales
                                                      (dollars in millions, except per share figures)
Net sales                                      $    16,178                  

$ 15,794

  Increase in comparable sales                         2.3 %                             52.4 %
Credit card revenues, net                              601                 3.7 %          568            3.6 %
Cost of sales                                       (9,856 )             (60.9 )%      (9,449 )        (59.8 )%
Selling, general and administrative expenses        (5,918 )             (36.6 )%      (5,618 )        (35.6 )%
Gains on sale of real estate                            74                 0.5 %           61            0.4 %
Impairment, restructuring and other costs              (25 )              (0.2 )%         (21 )         (0.1 )%
Operating income                                     1,054                 6.5 %        1,335            8.5 %

Diluted earnings per share                     $      2.37                          $    2.17

Supplemental Financial Measures
Gross margin (a)                               $     6,322                39.1 %    $   6,345           40.2 %
Digital sales as a percentage of net sales              31 %                               34 %

Supplemental Non-GAAP Financial Measures
Increase in comparable sales on an
  owned plus licensed basis                            2.3 %                             52.5 %
Adjusted diluted earnings per share            $      2.60                          $    2.91
EBITDA                                         $     1,681                          $   1,962
Adjusted EBITDA                                $     1,738                          $   2,073


(b) Gross margin is defined as net sales less cost of sales.



See pages 24 to 26 for reconciliations of the supplemental non-GAAP financial
measures to their most comparable GAAP financial measure and for other important
information.

Comparison of the 39 Weeks Ended October 29, 2022 and October 30, 2021

                                                                 2022         2021
Net sales                                                      $ 16,178     $ 15,794
Increase in comparable sales                                        2.3 %       52.4 %
Increase in comparable sales on an owned plus licensed basis        2.3 %       52.5 %
Digital sales as a percent of net sales                              31 %   

34 %



Net sales through the third quarter of 2022 increased as compared to the same
period in 2021 and the Company continued to experience an increase in comparable
sales. Through the third quarter of 2022, consumer shopping behavior shifted
more towards occasion-based apparel, with strength in dresses, women's and men's
shoes, career and tailored sportswear, luggage and fragrances. Pandemic-driven
categories such as casual, activewear, sleepwear and soft home, underperformed
the prior year. Digital sales decreased compared to the prior year period given
a shift back to in-store shopping.


                                                       2022       2021
Credit card revenues, net                             $  601     $  568

Credit card revenues, net as a percent of net sales 3.7 % 3.6 % Proprietary credit card sales penetration

               43.6 %     42.1 %


The increase in net credit card revenues was driven by the strong credit health
of the credit card portfolio's customers leading to lower levels of bad debt,
higher credit sales and higher spending on the co-brand credit card.

                                       19
--------------------------------------------------------------------------------
                                  MACY'S, INC.


                              2022         2021
Cost of sales               $ (9,856 )   $ (9,449 )
As a percent to net sales       60.9 %       59.8 %
Gross margin                $  6,322     $  6,345
As a percent to net sales       39.1 %       40.2 %


The decrease in the gross margin rate was primarily driven by an increase in
clearance and promotional markdowns in pandemic-related categories and seasonal
merchandise. This was partially offset by higher average unit retail driven by
higher ticket prices and favorable category mix particularly within
occasion-based categories.


                              2022         2021
SG&A expenses               $ (5,918 )   $ (5,618 )

As a percent to net sales 36.6 % 35.6 %



SG&A expenses increased in the first nine months of 2022 both in dollars and as
a percent to net sales. The increase in SG&A expense dollars and as a percent to
net sales corresponds with the Company filling a significant number of positions
that were open in the prior year as well as adjustments to colleague
compensation to remain competitive and attract the best talent, including
increasing the Company's minimum wage to $15/hour starting May 1, 2022.


                               2022      2021
Gains on sale of real estate   $  74     $  61

The 2022 asset sale gains mainly consisted of gains from the sale of four properties, while the 2021 asset gains are mainly driven by the Baldwin Hills sale, coupled with less significant gains from the sale of approximately 12 other properties.



                                            2022      2021

Impairment, restructuring and other costs $ (25 ) $ (21 )

Impairment, restructuring and other costs in the first nine months of 2022 and 2021 primarily related to the write-off of capital software assets.


                     2022      2021
Settlement charges   $ (32 )   $ (90 )


During the first nine months of 2022, the Company recognized a non-cash
settlement charge of $32 million primarily driven by an increase in lump sum
distributions associated with retiree distribution elections. During the first
nine months of 2021, the Company recognized a non-cash settlement charge of $90
million primarily driven by the transfer of fully funded pension obligations for
certain retirees and beneficiaries through the purchase of a group annuity
contract with an insurance company.


                                     2022       2021

Losses on early retirement of debt $ (31 ) $ (199 )



In the first nine months of 2022, losses on early retirement of debt were
recognized due to the early payment of $1.1 billion aggregate principal amount
of senior notes and debentures in the first quarter of 2022. In the first nine
months of 2021, losses on early retirement of debt were recognized primarily due
to the redemption of the entire outstanding $1.3 billion aggregate principal
amount of Company's senior secured notes due 2025 in the third quarter of 2021
as well as the repurchase of $500 million aggregate principal amount of notes in
a tender offer in the first quarter of 2021.


                        2022       2021

Net interest expense $ (131 ) $ (211 )



The decrease in net interest expense, excluding losses on early retirement of
debt, was primarily driven by interest savings associated with the redemption of
the Company's $1.3 billion aggregate principal amount of its senior secured
notes due 2025 in August 2021, as well as the financing activities completed in
the first quarter of 2022.

                                       20
--------------------------------------------------------------------------------
                                  MACY'S, INC.


                                 2022       2021
Effective tax rate                24.2 %     22.3 %
Federal income statutory rate       21 %       21 %

The Company's effective tax rate varies from the federal income tax statutory rate of 21% in both periods mainly driven by the impact of state and local taxes.

Liquidity and Capital Resources


The Company's principal sources of liquidity are cash from operations, cash on
hand and the asset-based credit facility described below. Material contractual
obligations arising in the normal course of business primarily consist of
long-term debt and related interest payments, lease obligations, merchandise
purchase obligations, retirement plan benefits, and self-insurance reserves.

Merchandise purchase obligations represent future merchandise payables for inventory purchased from various suppliers through contractual arrangements and are expected to be funded through cash from operations.

Capital Allocation


The Company's capital allocation goals include maintaining a healthy balance
sheet and investment-grade credit metrics, followed by investing in growth
initiatives and returning capital to shareholders through modest yet predictable
dividends and meaningful share repurchases.

The Company ended the third quarter of 2022 with a cash and cash equivalents
balance of $326 million. This compares to a balance of $316 million at the end
of the third quarter of 2021. The Company is party to the ABL Credit Facility
with certain financial institutions providing for a $3 billion asset-based
credit facility.


                                              2022             2021

Net cash provided by operating activities $ 488 $ 841 Net cash used by investing activities

           (869 )           (203 )

Net cash used by financing activities (1,005 ) (2,071 )

Operating Activities


The decrease in net cash provided by operating activities was primarily driven
by changes in accounts payable and accrued liabilities, which decreased in the
third quarter of 2022 from 2021 fiscal year end compared to an increase in the
third quarter of 2021 from 2020 fiscal year end. This was largely driven by
certain expense prepayments that occurred at the end of 2020, more significant
bonus accruals at the end of 2021 compared to 2020 and a reduction in the
Company's gift card reserve due to lower gift card sales and lower redemption
patterns as compared to historical levels.

Investing Activities

The Company's 2022 capital expenditures were $983 million compared to $385 million through the third quarter of 2021. The increase is mainly driven by investments in its stores and distribution centers as well as its technology-based initiatives, including those that support the digital business, data science initiatives and the simplification of its technology structure.


Financing Activities

Dividends

The Company paid dividends totaling $130 million and $46 million in 2022 and 2021, respectively.


In 2022, the Board of Directors declared regular quarterly dividends of 15.75
cents per share on the Company's common stock, which were paid on April 1, 2022,
July 1, 2022, and October 3, 2022 to Macy's, Inc. shareholders of record at the
close of business on March 15, 2022, June 15, 2022, and September 15, 2022,
respectively. In 2021, the Board of Directors declared a regular quarterly
dividend of 15 cents per share on the Company's common stock, which was paid on
October 1, 2021 to Macy's, Inc. shareholders of record at the close of business
on September 15, 2021.

On October 28, 2022, the Company's Board of Directors declared
a regular quarterly dividend of 15.75 cents per share on its common stock,
payable January 3, 2023, to shareholders of record at the close of business on
December 15, 2022. Subsequent dividends will be subject to approval of the Board
of Directors, which will depend on market and other conditions.

                                       21
--------------------------------------------------------------------------------
                                  MACY'S, INC.

Stock Repurchases


On February 22, 2022, the Company announced that its Board of Directors
authorized a new $2.0 billion share repurchase program, which does not have an
expiration date. During 2022 and 2021, the Company repurchased approximately
24.0 million and 13.0 million shares of its common stock at an average cost of
$24.98 and $23.02 per share, respectively. As of October 29, 2022, $1.4 billion
of shares remained available for repurchase under the Company's share repurchase
program. Repurchases may be made from time to time in the open market or through
privately negotiated transactions in accordance with applicable securities laws,
including Rule 10b-18 under the Securities Exchange Act of 1934, on terms
determined by the Company.

Debt Transactions


Beginning August 2021, the Company completed a series of debt transactions that
resulted in a $1.9 billion decrease in its long-term debt through the third
quarter of 2022. These transactions also contributed to a decrease in interest
expense, a re-laddering of fixed interest rate debt maturities and an
improvement in the Company's leverage ratio.

As of October 29, 2022, and October 30, 2021, the Company had $65 million and
$116 million of standby letters of credit outstanding under its revolving credit
facility ("ABL Credit Facility"), respectively, which reduced the available
borrowing capacity to $2,935 million and $2,825 million respectively. The
Company had outstanding borrowings under the ABL Credit Facility of $183 million
as of October 29, 2022 and $140 million as of October 30, 2021.

The Company may, from time to time, repurchase or otherwise retire, exchange or
extend its outstanding debt and/or take other steps to reduce its outstanding
debt or otherwise optimize its capital structure and improve its financial
position. These actions may include open market debt repurchases, tender or
exchange offers, negotiated repurchases, other retirements or redemptions of
outstanding debt and/or opportunistic refinancing of debt or otherwise. The
amount of debt that may be repurchased or otherwise retired or refinanced, if
any, will depend on prevailing market conditions, trading levels of the
Company's debt, the Company's cash position, compliance with debt covenants and
other considerations.

Credit Ratings

As of October 29, 2022, the Company's credit rating and outlook were as described in the table below.

                 Moody's   Standard & Poor's   Fitch
Long-term debt       Ba1                  BB     BBB-
Outlook           Stable            Positive   Stable

Subsequent to October 29, 2022, Standard & Poor's upgraded the Company's long-term debt rating to BB+ and the outlook to stable.

Contractual and Other Material Cash Obligations


As of October 29, 2022, other than the financing transactions discussed above
and in Note 4 to the accompanying Consolidated Financial Statements, there were
no material changes to our contractual and other material cash obligations and
commitments outside the ordinary course of business since January 29, 2022, as
reported in the Company's 2021 Form 10-K.

                                       22
--------------------------------------------------------------------------------
                                  MACY'S, INC.

Guarantor Summarized Financial Information


The Company had $3,007 million and $2,935 million aggregate principal amount of
senior unsecured notes and senior unsecured debentures (collectively the
"Unsecured Notes") outstanding as of October 29, 2022 and January 29, 2022,
respectively, with maturities ranging from 2023 to 2043. The Unsecured Notes
constitute debt obligations of MRH ("Subsidiary Issuer"), a 100%-owned
subsidiary of Macy's, Inc. ("Parent" and together with the "Subsidiary Issuer,"
the "Obligor Group"), and are fully and unconditionally guaranteed on a senior
unsecured basis by Parent. The Unsecured Notes rank equally in right of payment
with all of the Company's existing and future senior unsecured obligations,
senior to any of the Company's future subordinated indebtedness, and are
structurally subordinated to all existing and future obligations of each of the
Company's subsidiaries that do not guarantee the Unsecured Notes. Holders of the
Company's secured indebtedness, including any borrowings under the ABL Credit
Facility, will have a priority claim on the assets that secure such secured
indebtedness; therefore, the Unsecured Notes and the related guarantee are
effectively subordinated to all of the Subsidiary Issuer's and Parent and their
subsidiaries' existing and future secured indebtedness to the extent of the
value of the collateral securing such indebtedness.

The following tables include combined financial information of the Obligor
Group. Investments in subsidiaries of $8,905 million and $7,975 million as of
October 29, 2022 and January 29, 2022, respectively, have been excluded from the
Summarized Balance Sheets. Equity in earnings of non-Guarantor subsidiaries of
$487 million and $1,568 million for the 13 and 39 weeks ended October 29, 2022,
respectively, have been excluded from the Summarized Statement of Operations.
The combined financial information of the Obligor Group is presented on a
combined basis with intercompany balances and transactions within the Obligor
Group eliminated.

© Edgar Online, source Glimpses

All news about MACY'S, INC.
02/03Fitch Downgrades Three Classes of GSMS 2013-G1
AQ
02/03DBRS Morningstar Confirms All Classes of COMM 2014-CCRE21 Mortgage Trust
AQ
02/03DBRS Morningstar Confirms Ratings on JP Morgan Chase Commercial Mortgage Securities Tru..
AQ
02/02Fitch Affirms SGCMS 2016-C5; Revises One Outlook to Stable
AQ
02/01PATTERN Beauty Launches At Macy's, Expanding the Retailer's Growing Haircare Portfolio
CI
02/01PATTERN Beauty Launches at Macy's, Expanding the Retailer's Growing Haircare Portfolio
BU
01/30Apparel Retail Sector Faces Choppy Scenario in 2023 Amid High Inflation, Goldman Sachs ..
MT
01/30Apparel Retailers Expected to See 'Muted' Growth in 2023 as Inflationary Pressures Moun..
MT
01/30It's all about central banks this week
MS
01/30Goldman Sachs Initiates Macy's at Buy With $28 Price Target
MT
More news
Analyst Recommendations on MACY'S, INC.
More recommendations