Certain financial highlights are as follows:
• Comparable sales were up 12.8% on an owned basis; and up 12.4% on an owned
plus licensed basis compared to the first quarter of 2021.
• Digital sales increased 2% versus the first quarter of 2021. Digital
quarter of 2021.
• Selling, general and administrative (“SG&A”) expense was $1.9 billion, up
$131 million from the first quarter of 2021. SG&A expense as a percent of
sales was 35.1%, an improvement of 200 basis points from the first quarter
of 2021.
• Net income was $286 million in the first quarter of 2022, compared $103
million in the first quarter of 2021.
• The first quarter of 2022 had positive earnings before interest, taxes,
depreciation and amortization (“EBITDA”) of $676 million compared to EBITDA
of $454 million during the first quarter of 2021. On an adjusted basis,
• Diluted earnings per share and adjusted diluted earnings per share were
$0.98 and $1.08, respectively, during the first quarter of 2022. This
compares to diluted earnings per share and adjusted diluted earnings per
• During the first quarter of 2022, the Company took the following actions to
boost its liquidity and financial flexibility as well as return capital to
shareholders:
• On March 8, 2022, the collateral securing the Company’s second lien
• Using the proceeds from the issuance of $850 million in new unsecured
approximately $1.1
shareholders.
During the first 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 was able to reach
a broad and diverse range of customers during the first quarter. In
merchandise, strengths shifted away from pandemic-driven products such as
casual, activewear, and soft home, and into occasion-based categories, such
as dresses, women’s shoes, accessories and men’s tailored. This shift
contributed to an increase in store foot-traffic and the Company’s balanced
assortment allowed it to meet demand and capture sales. Additionally, during
the first quarter of 2022, the Company launched Own Your Style, a new
multiyear creative brand platform and tagline celebrating individuality and
placing customers at the center of communication and Mission Every One, a
social purpose platform in which Macy’s invests in its people, partners,
products and programs to create a more equitable and sustainable future.
Finally, the Company is in the early stages of reinventing its private brand
• Deliver Clear Value: The Company is leveraging data analytics and pricing
tools to efficiently plan, place and price inventory, including location
level pricing and point-of -sale (“POS”) pricing work. The Company’s POS
pricing optimization contributed to lower promotional markdowns on regular
priced goods which contributed to higher average unit retail and improved
gross margin performance during the first quarter. Additionally, higher
ticket prices and category mix benefited average unit retail during the
quarter. These collective activities have resulted in higher average unit
retail prices and gross margin performance. In addition, inventory turn for
• Excel in Digital Shopping: While the Company experienced a deceleration in
the growth of its digital channel during the first quarter, as consumers
shifted back to in-store shopping, the Company continued to improve its
digital offerings through continued website and app updates. Digital
conversion for the quarter was 3.8%. Macy’s Media Network, an in-house media
platform that enables business-to-business monetization of advertising
partnerships, generated $26 million of net revenue during the first quarter
of 2022, nearly double that of the first quarter of 2021. In addition, in
November 2021, the Company announced its plan to launch a curated, digital
• Enhance Store Experience: During the first quarter of 2022, the consumer
shifted shopping channels from digital to stores as consumer comfort levels
grew along with their desire to return 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 as convenient and compelling as possible. For example,
the Company invested in its customer service experience by enhancing At Your
Service centers. The Company is in the process of adding 37 new Macy’s
Backstage locations nationwide as well as 5 to 10 off-mall, smaller format
stores in 2022, a mix of Market by Macy’s, Freestanding Backstage, Bloomie’s
• Modernize Supply Chain: The Company has continued to update its supply chain
infrastructure and network, while leveraging improved data and analytics
capabilities in fulfillment strategies to meet customers’ desire for speed
and convenience and improving inventory placement. The Company is navigating
supply chain disruptions by adjusting freight strategies, diversifying ports
and working closely with international carriers and brand partners to
prioritize product. 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
will continue to support stores in the region as well as provide online
fulfillment. In addition, the Company plans to open a new 1.4
million-square-foot fulfillment center in North Carolina in 2024. The
facility will be equipped with new automation technology to increase
capacity and productivity to help drive profitable digital sales growth and
• 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 are
coupled with others to build out data science and analytics capabilities
with a focus on areas to provide competitive differentiation. The Company
segments. As part of the Company’s ongoing initiatives to attract and retain
talent, in May 2022, the Company raised its minimum pay rate to $15 per hour
and began providing a debt-free education benefit program through which
U.S.-based, regular, salaried and hourly colleagues are able to pursue a
range of education programs with 100% of tuition, books and fees covered.
Results of Operations
$ 4,706
(a) Gross margin is defined as net sales less cost of sales.
Comparison of the First Quarter of 2022 and the First Quarter of 2021
37.1 %
Impairment, restructuring and other costs in the first quarter of 2021 primarily related to the write-off of investment assets.
21 %
Liquidity and Capital Resources
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
Net cash provided by operating activities $ 248 $ 494 Net cash used by investing activities
Net cash used by financing activities (1,094 ) (300 )
Operating Activities
The decrease in net cash provided by operating activities was driven by the decrease in accounts payable and accrued liabilities due to the timing of payments and a lower net inflow from the increase in merchandise accounts payable and merchandise inventories.
Investing Activities
The Company’s first quarter of 2022 capital expenditures were $171 million, mainly driven by investments in its department stores as well as its technology-based initiatives, including those that support the digital business, data science initiatives and the simplification of its technology structure.
Stock Repurchases
Debt Transactions
Contractual Obligations
Guarantor Summarized Financial Information
© Edgar Online, source Glimpses

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