Macy’s, Inc. Fourth Quarter 2025 Earnings Call - Bold New Chapter Showing Traction, Bloomingdale’s Leads but Tariffs and Lower Asset Gains Temper Optimism

Operator: Greetings, and welcome to the Macy’s, Inc. fourth quarter 2025 earnings conference call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this call is being recorded. I would now like to turn the call over to Pam Quintiliano, Vice President, Investor Relations. Pam, you may now begin.

Pam Quintiliano, Vice President, Investor Relations, Macy’s, Inc.: Thank you, operator. Good morning, everyone, and thanks for joining us. With me on the call today are Tony Spring, our Chairman and CEO, and Adrian Mitchell, our COO and CFO. Along with our fourth quarter 2025 press release, a Form 8-K has been filed with the Securities and Exchange Commission, and a presentation has been posted on the investor section of our website, macysinc.com, and is being displayed live during today’s webcast. Unless otherwise noted, the comparisons we provide will be versus 2024. All references to our prior expectations, outlook or guidance refer to information provided on our December third earnings call. On today’s call, we will refer to certain non-GAAP financial measures. Reconciliations of these measures can be found in our earnings presentation and SEC filings available at www.macysinc.com/investors.

All references to comp sales throughout today’s prepared remarks represent comparable owned plus licensed plus marketplace sales, or OLM, unless otherwise noted. Going forward, Macy’s, Inc.’s comparable sales and other go-forward metrics include Macy’s go-forward locations in digital and Bloomingdale’s and Bluemercury nameplates, inclusive of stores in digital. As a reminder, we recently announced an update to our non-GAAP financial disclosures, the details of which are available in a Form 8-K filed on February eighteenth. These changes do not impact our historical or future GAAP metrics and disclosures. The updated disclosures, which encompass comparable sales, OLM dollar sales, revenues, and non-GAAP earnings, are intended to both simplify disclosures and provide increased clarity on the key metrics that support our growth profile and go-forward operating performance. For fourth quarter and full year 2025 results, we reported non-GAAP earnings consistent with previous disclosures and prior guidance.

All prior and updated non-GAAP metrics will be available in our investor presentation located on our website. Beginning with the first quarter of fiscal 2026, adjusted earnings metrics will reflect our new non-GAAP metrics. Please note that all forward-looking statements are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and assumptions mentioned today. A detailed discussion of these factors and uncertainties is contained in our filings with the SEC. Today’s call is being webcast on our website. A replay will be available approximately 2 hours after the conclusion of this call. With that, let me turn it over to Tony.

Blake Anderson, Analyst, Jefferies3: Good morning, everyone, and thank you for joining us today. 2025 was a year of transformation. Solid execution of our Bold New Chapter strategy, supported by our strong balance sheet, drove enterprise-wide improvements. We’re gaining measurable traction and delivering meaningfully positive results. As we look back on 2025, we achieved several major milestones. First, we returned to positive comparable sales for total Macy’s, Inc. and Macy’s nameplate, marking an important inflection point. Second, we achieved better-than-expected top line and bottom line results in every quarter, demonstrating strong and consistent execution. Third, we delivered adjusted diluted EPS well above our most recent guidance. Results were also above our initial guidance, despite the unanticipated impact of tariffs and lower-than-expected asset sale gains. I’m thankful to our colleagues. Their leadership, talent, and commitment are the driving force behind our performance.

Our teams have worked collaboratively with our partners to deliver A Bold New Chapter, and together, we are making meaningful progress towards our long-term sustainable profitable growth. Now let me provide a brief overview of fourth quarter results before turning to our full year performance and fiscal 2026 expectations. In the fourth quarter, Macy’s, Inc. net sales, comparable sales, and core adjusted EBITDA all exceeded guidance. Results were driven by better-than-expected performance across key line items and positive go-forward comparable sales at each nameplate, led by Bloomingdale’s impressive 9.9% growth. Adjusted diluted EPS of $1.67 was well above our guidance range of $1.35-$1.55. During the fourth quarter, customers responded favorably to our merchandising, marketing, and promotional events, supported by an improved omni-channel shopping experience.

Macy’s Thanksgiving Day Parade drew a record 34 million-plus viewers and had over 3 billion earned social media impressions, up about 30% to last year. We leveraged the power of the parade into our retail offerings. Holiday destination categories, including fragrances, jewelry, and handbags, outperformed. Other highlights included women’s contemporary, denim, dresses, and children’s. At Bloomingdale’s, our Happy Together campaign generated roughly 15 billion unique impressions per month in earned media for November and December. Our Burberry and Bloomingdale’s partnership generated buzz through its in-store pop-ups and exclusive products. While almost every category had positive comps in the quarter, standouts included fragrances, women’s contemporary, designer apparel, and fine jewelry. Fourth quarter performance wrapped up a successful second year of our Bold New Chapter strategy. For fiscal 2025, we exceeded expectations on all key line items, including net sales, comparable sales, EBITDA, and core adjusted EBITDA.

An adjusted diluted EPS of $2.32 was well above our most recent guidance of $2-$2.20. Now let’s review how our strategic pillars drove annual results, beginning with strengthening and reimagining Macy’s. Macy’s nameplate achieved 0.6% go-forward comparable sales growth, representing a 190 basis points improvement versus last year and a 690 basis points improvement on a two-year basis. Performance was led by the Reimagine 125 locations in digital. The Reimagine 125 comparable sales grew 1%. Stores that have received initiatives delivered positive comps in seven of the past eight quarters and serve as a strong proof point of our ability to return to growth. Performance reflects our customer-led focus, including clear and purposeful changes at Macy’s. We’ve improved our assortment relevancy.

We’re investing in staffing and events, and we’re leveraging local market strengths. These initiatives are having a halo effect on Macy’s omnichannel business and contributing to positive digital comparable sales results. Speaking of digital, Macy’s digital channel represents approximately 1/3 of our annual sales. It is benefiting from a modernized macys.com inspired by what we’re doing in stores. Over the past year, we have shifted to a more editorialized approach that reinforces our fashion authority and facilitates shopping across categories that drives commerce. Across stores and digital, we are emphasizing products and experiences. Our inventory composition and in-stocks have improved. We have a better balance of newness and evergreen product and have further refined our assortments and brand matrix. In 2025, we introduced 60 new brands, including Abercrombie Kids, MFK, BCBG, and Good American.

At the same time, we expanded distribution on top existing brand partners such as Avec Les Filles, Sam Edelman, and Donna Karan, while we continued to edit less productive brands. Our omnichannel customer experience is supported by investments in our colleagues. We’ve rolled out enhanced education, a tiered approach to staffing and events, and dedicated frontline colleagues to specific merchandise areas. In addition, we’re taking a more localized approach to provide store-level empowerment and deliver against direct customer preferences in each of the markets we serve. This year, we achieved our best Net Promoter Score on record. We’re proud of the results and our deep customer engagement. We had approximately 900,000 respondents participate in surveys throughout the year, and we remain committed to continuous improvement. As I reflect on 2025, Macy’s has a clear, well-defined strategy that is gaining traction.

When combined with our strong financial foundation, I am confident we can further build momentum. Now turning to our second pillar of strategy, accelerating and differentiating luxury. In 2025, Bloomingdale’s achieved 7.4% comparable sales growth, representing a 490 basis point improvement versus last year and a 1,030-point improvement on a two-year basis. Strength was broad-based across stores and digital, with growth in almost all product categories. Our Bloomingdale’s strategy is anchored on being the local leader in the markets we serve. We have a clear emphasis on discovery, newness, and connection with the premium contemporary to luxury customer. Over the past year, we have raised the bar on curation. At the same time, we’ve deepened brand partnerships and further invested in experiences. This approach is resonating. We continue to gain market share across brands, categories, and regions.

Our unique multi-generational audience is drawn to our inviting and vibrant shopping environment and compelling assortments. During the year, we introduced new brands including Totême, Christian Louboutin, Victoria Beckham Beauty, SKIMS, Messika, and Vuori, just to name a few. These brands have inspired existing customers, attracted new ones, and further strengthened Bloomingdale’s relevancy. It’s an exciting time at Bloomingdale’s. Our team is strong and has never felt better. We have a highly loyal and engaged customer base and excellent vendor partnerships. We also have an omnichannel roadmap for growth. Recent performance demonstrates how a disciplined focus, clear brand strategy, and consistent execution can drive results. We are well-positioned to build on this foundation and deliver sustained performance. Rounding out the conversation on luxury, Bluemercury achieved 1.6% annual comparable sales growth. Results continue to be driven by dermatological skincare and fragrances including SkinCeuticals, Dr.

Diamond’s Metacine, Sisley-Paris, and Parfums de Marly. We’re also encouraged by the performance in our new stores, which continue to post growth as we iterate on assortments and develop each store’s client base. The third pillar of our strategy is simplifying and modernizing end-to-end operations to improve customer service and drive greater efficiencies. Initiatives are delivering results. As our business continues to evolve, we are expanding the aperture of end-to-end to encompass a broader view of organizational excellence and operational efficiency. This continues to incorporate the use of AI, where we are building capabilities throughout the organization. The team has walked me through over 35 different use cases, all of which are designed to support how customers shop and how our colleagues serve them, and I’m excited about what’s to come. Looking to fiscal 2026, we are focused on the factors in our control.

We continue to execute our Bold New Chapter strategy. We’ll build on what’s been working, including our go-forward fleet, product, and brand relevancy, and our improved omni-channel experiences and messaging. This will be supported by our strong culture and seasoned leadership team. At Macy’s, we’re confident in the reimagined location’s ability to deliver profitable growth. Earlier this year, we introduced initiatives to an additional 75 locations, creating the Reimagine 200. Now, nearly 60% of our go-forward Macy’s store base has the full suite of initiatives, accounting for roughly 75% of our go-forward Macy’s store sales, delivering meaningful scale to our overall business. 2026 is a year of milestones. We have the 50th anniversary of our Fourth of July fireworks and the 100th anniversary of the Macy’s Thanksgiving Day Parade, and we will be top of mind during these key moments as well as many others.

We are calling 2026 Celebrations Start at Macy’s. In addition to the large-scale event that the whole country celebrates with us, we also have localized strategies designed to engage customers, generate excitement, increase brand loyalty, and enhance the shopping experience. We had our first celebration, Prom Starts Here, last Saturday. Customers at Herald Square and our stores across the country were able to meet their favorite content creators, explore curated prom edits, attend beauty master classes, and personalize their looks. These activations drove social engagement and our overall sales. Prom is just one of the many events that Macy’s will host for the entire family this year. Macy’s is not celebrating alone. Last week, Bloomingdale’s launched its spring fashion campaign, California Love, featuring unique experiences, exclusive products, and community-driven moments. At its heart is Surf Shop, a new carousel spotlighting California-owned and inspired product.

The carousel introduces 16 new California brands, 270 limited time exclusives from customer favorites, including Vince, Citizens of Humanity, AGOLDE, STAUD, SIMKHAI, FRAME, and MOTHER. It also has an AQUA and Lisa Says Gah collaboration. Bloomingdale’s has strong momentum with multiple levers for continued growth. We’re a partner of choice, allowing us to introduce more new relevant and exclusive brands while expanding our points of distribution with existing brands. Our immersive shopping environment, which invite customers to spend the day with us, are differentiated and resonate across geographies. With stores in just 14 of the top 50 designated U.S. markets, there is significant room for expansion of small format Bloomingdale’s and outlets, and we are methodically evaluating all opportunities. I am confident in our ability to further expand our position as a leading modern luxury shopping destination.

Now, I would like to discuss the consumer and our approach to 2026 guidance. Thus far, our customers have remained resilient, and we are pleased with our quarter to date results. Our customers across nameplates skew more towards the middle and upper-income tiers. Performance remains stronger in these cohorts, while the lower tiers remain more choiceful. As we look ahead, there are many macroeconomic and geopolitical factors that could influence discretionary spend. While we remain confident in our strategy and believe we are well-positioned to build on our recent momentum, we are taking a prudent approach to guidance. Our first quarter and fiscal 2026 guidance ranges support our go-forward growth initiatives while preserving flexibility to respond to changes in the competitive landscape and consumer demand. To close, our commitment to the Bold New Chapter is unwavering. It is delivering results.

We have achieved four consecutive quarters of better than expected top line and bottom line performance, and three consecutive quarters of comparable sales growth led by our go-forward Macy’s and Bloomingdale’s business. In 2026, we are well-positioned to deliver further progress. Looking further ahead, our proven initiatives, strong execution, strategic clarity, and customer focus should drive sustainable growth and unlock future value creation. Now, let me turn it over to Tom.

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: Thanks, Tony, and good morning, everyone. We are encouraged by our fourth quarter performance, which capped off a year of meaningful advancement of our Bold New Chapter strategy. For both the quarter and the full year, we achieved better than expected net sales, comparable sales, go-forward comparable sales, adjusted EBITDA, and adjusted diluted EPS. Let’s begin with a detailed view of the fourth quarter. Macy’s, Inc. net sales of $7.6 billion were above our guidance range of $7.35-$7.5 billion and compared to $7.8 billion last year. Excluding the approximately $200 million impact from the 64 non-go-forward stores that closed at the end of fiscal 2024, Macy’s, Inc. sales grew 0.9%. Macy’s, Inc.

Comparable sales rose 1.8%, materially above our guidance for down 2.5% to flat, led by go-forward business comparable sales growth of 2% compared to guidance of down 2% to flat. By nameplate, Macy’s go-forward comparable sales rose 0.6%, including Reimagine 125 growth of 0.9%. Both the first 50 and next 75 locations were positive. Bloomingdale’s comparable sales rose 9.9%, benefiting from its best holiday result on record, and Bluemercury comparable sales increased 1.3%. Turning to revenue, Macy’s, Inc. total revenue was $7.9 billion, down 1.1% to last year. Similar to net sales, the decline was entirely attributable to last year’s store closures. Revenues included $277 million other revenue comprised of credit card and Macy’s Media Network.

Credit card revenue was $205 million, up 17.1% versus the prior year, driven by our healthy credit portfolio. Macy’s Media Network revenue was $72 million, up 12.5%. Gross margin was $2.7 billion, or 35.2% of net sales compared to 35.7% last year. Excluding an approximately 60 basis point tariff impact, which was in line with our expectations, gross margin rate would have expanded about 10 basis points. For the quarter, AUR continued to rise, driven by a favorable mix shift and positive consumer response to newness. SG&A expense of $2.4 billion declined $23 million or 1% from last year. The decline reflected the net benefit of the 64 closed Macy’s locations and ongoing expense savings initiatives.

It was partially offset by investments in our go-forward business, which we view as critical to driving healthy and sustainable top-line growth. As a percent of total revenue, SG&A expense was 29.8% compared to 29.7% in the prior year. During the quarter, we recognized $3 million of asset sale gains. This compared to our expectation for $15 million-$20 million and $41 million last year and reflects the shift in timing of certain transactions. We remain committed to optimizing our go-forward fleet and being disciplined in our approach to closing underproductive stores. With that, looking at fourth quarter earnings, adjusted EBITDA was $840 million or 10.6% of total revenue. This compares to $903 million or 11.3% last year.

Adjusted EPS of $1.67 exceeded the high end of our guidance range of $1.35-$1.55, including a tariff impact of approximately $0.13 and a roughly $0.04 impact from lower than expected asset sale gains. Performance was supported by our disciplined approach to cash flow, balance sheet, and capital allocation. Let’s start with cash flow. Macy’s, Inc. generates robust operating cash flow on an ongoing basis. This supports our capital allocation priorities. For the year, operating cash flow was $1.4 billion versus $1.3 billion last year, and free cash flow was $797 million versus $679 million last year. This represents a free cash flow yield of over 15%.

We achieved higher free cash flow despite monetization proceeds of $107 million compared to $283 million last year and ended the year with $1.2 billion of cash on our balance sheet. During the year, our balance sheet was further strengthened via a series of financing transactions. We now have no material long-term debt maturities until 2030. Our adjusted debt to adjusted EBITDAR leverage ratio remains below our 2.5 times target, which reinforces our financial flexibility. At year-end, inventories were $4.4 billion, down 1.3% from last year. Heading into spring, we feel good about our composition. We have more newness, less aged goods, and open-to-buy flexibility to respond to market dynamics and trends. Turning to capital expenditures, we’re focused on supporting growth and efficiencies and improving our customer experience.

We evaluate all initiatives based on return on investment. For 2025, capital expenditures were $740 million, down from $882 million in 2024. The reduction in year-over-year spend primarily reflected the completion of several longer-term projects, including our China Grove Distribution Center, which opened last year. Looking ahead, we continue to believe there are compelling investment opportunities to support and accelerate our long-term growth profile. Our capital allocation priorities are clear and consistent. First, invest in the business to support the Bold New Chapter strategy. Second, manage our balance sheet leverage and liquidity. Third, return cash to shareholders through dividends and share repurchases. For the year, we returned $448 million to shareholders, including $197 million of cash dividends. Since reinstating our regular quarterly dividend in 2021, our annual payout amount has risen 27%.

In addition to the quarterly dividend, in 2025, we repurchased $251 million of shares, including $50 million in the fourth quarter. This leaves approximately $1.1 billion remaining on our authorization. As we reflect on 2025, we made significant progress towards achieving our long-term goal of sustainable, profitable growth. Before turning to guidance, I want to share a few observations from my first 9 months. Starting with the team, I have been impressed by our talented colleagues. Their dedication, skill, and expertise, combined with the willingness and urgency to drive the business forward, is delivering results. Beyond our teams, I believe Macy’s, Inc. has significant underappreciated capabilities in areas such as data science, AI, and technology. Our Macy’s ecosystem is a fundamental strength, which I’ll describe in more detail shortly.

With these observations as a backdrop, my focus and approach is clear: support the execution of what is already working, adjust direction and adapt where needed, and build on our strengths and opportunities to accelerate growth. There are three specific areas that highlight these learnings and approach that are incorporated into our plans for 2026 and beyond. The first area is our Macy’s store portfolio. One of my top priorities has been to carefully evaluate the Macy’s base, including current performance, future potential, and real estate value considerations. We are taking a pragmatic approach and are committed to running an optimized fleet that can profitably grow. Based on our assessment, our target go-forward fleet remains approximately 350 locations. These will form a cohesive market-by-market framework that supports our broader Macy’s omnichannel business.

We still plan to exit approximately 65 locations, completing the previously announced 150 closures. With our strong balance sheet and cash flow generation, we can be flexible on timing of transactions. In order to maximize value of remaining assets, we now expect closures through 2028. The second area is related to organizational excellence and operational efficiencies of our end-to-end operations. Our end-to-end initiatives are working. We have materially improved delivery times and now share specific delivery expectations with our customers. Following our multi-year network modernization efforts, our new state-of-the-art China Grove distribution facility has streamlined and automated how we work and will provide better customer service and reduce cost to serve. Building on this as a base, we believe there is significant opportunity to leverage AI throughout the organization, including supply chain, merchandising, marketing, and call centers, as well as in customer-facing and omnichannel areas.

Now let’s discuss the Macy’s ecosystem. I’ve been impressed with our deep customer knowledge. We connect with nearly 40 million customers annually, giving us visibility to over 70% of transactions. This is enabled by our stores, digital channels, loyalty, and credit card programs, in addition to Macy’s Media Network, marketing, and events. They are all interconnected and provide value to our customers and to Macy’s, Inc. Having spent many years across the retail, consumer goods, and hospitality industries, this ecosystem is a unique strength. Now, before turning to guidance, as a reminder, on February 18, we filed an 8-K updating our non-GAAP metrics and definition of non-GAAP earnings, which now excludes non-cash asset sale gains and benefit plan income. These measures illustrate sequential improvement and a return to growth and are intended to simplify reporting to better focus on our go-forward business performance.

Moving to guidance, we enter the year well-positioned. Our inventories have a relevant mix of categories and brands across a variety of price points. This is supported by compelling marketing campaigns and events that are designed to activate and engage customers. For our guidance, we are taking a prudent approach, giving ourselves flexibility to respond to changes in the competitive landscape and external environment, as well as macroeconomic and geopolitical unknowns. As we look at 2026, a few considerations. The tariff environment continues to evolve. Our first quarter outlook largely reflects rates before recent changes, as prior tariffs are incorporated in our existing inventory cost basis. For the second quarter and rest of year, our outlook assumes similar tariffs remain in place. With that, for the full year, we expect net sales of approximately $21.4 billion-$21.65 billion. Macy’s, Inc.

Comparable sales to be in a range of -0.5% to +0.5%. Other revenue of about $920 million. Gross margin as a percent of net sales to be 38.3%-38.6%. We expect a tariff impact to gross margin of roughly 20 to 30 basis points. We begin to lap higher tariffs in the second quarter. We expect gross margin rate to be down in the first quarter and up in the second through fourth quarters. SG&A to be up 1%-2% on a dollar basis to last year, below the rate of inflation. Please keep in mind that planned spend reflects investments to support sustainable top-line growth, including enhancements to the omnichannel shopping experience across nameplates and in talent.

We are not benefiting from as meaningful an SG&A reduction from closed stores on a year-over-year basis, with 14 closures in fiscal 2025 compared to 64 in fiscal 2024. We are also maintaining our always-on expense savings approach. Based on seasonality of spend, we expect the highest SG&A dollar growth in the first and third quarters. We expect adjusted EBITDA as a percent of total revenue of 7.7%-7.9% versus 7.9% in fiscal 2025, and interest expense of roughly $110 million. We expect adjusted diluted EPS of $1.90-$2.10. This does not include potential future share buybacks. It does incorporate a roughly 10-20 cent tariff impact and compares to adjusted diluted EPS of $2.15 in the year ago period.

For the first quarter, we expect net sales of approximately $4.575 billion-$4.625 billion. Macy’s, Inc. comparable sales are expected to be up approximately 0.5%-1.5%. Adjusted EBITDA as a percent of total revenue of 4.9%-5.1% versus 6.3% last year. Adjusted EPS of -$0.01 to +$0.01 compared to $0.11 last year. We expect tariffs to negatively impact EPS by roughly $0.05-$0.10 and gross margin rate by roughly 40-60 basis points.

In conclusion, we ended 2025 on a strong note. Better than expected fourth quarter results across key metrics underscore the strength and promise of our A Bold New Chapter strategy. We have proven initiatives in place supported by our solid free cash flow, balance sheet and capital allocation strategy. As we look to 2026, we are well-positioned to thoughtfully navigate the near term, deliver our long-term goals, and provide meaningful value to our customers and shareholders. Now, I will turn the call back to Tony for closing remarks.

Blake Anderson, Analyst, Jefferies3: Thanks, Tom. The Bold New Chapter strategy is centered on creating a more focused, resilient company. It balances the art and science of retail. We combine customer insights, data, and creative merchandising to meet customers where they are. Recent performance reflects accelerating momentum across each pillar of our strategy and reinforces our confidence in the direction. We have a clear path to growth. Our balance sheet, relationships, and initiatives position us to build on recent financial and operational success and pursue new opportunities. With that operator, we’re now ready for questions.

Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We do ask that you please limit yourself to one question and one follow-up question. Again, that’s star one to register a question at this time. Our first question today is coming from Blake Anderson of Jefferies. Please go ahead.

Blake Anderson, Analyst, Jefferies: Hi, guys. Good morning and congrats on the nice quarter here. Wanted to ask Tony to start. Given the continued macro and consumer volatility, just how are you feeling about the ability for Macy’s, Inc. to be more resilient going forward despite the headwinds to the consumer? What gives you confidence you can continue to build on the momentum you made this past year?

Blake Anderson, Analyst, Jefferies3: Thanks, Blake, for the question. I feel terrific about how we closed the 2025. Growth across Macy’s, Bloomingdale’s, and Bluemercury. Reimagined stores continuing to outperform 7-8 quarters of growth. Bloomingdale’s running on all cylinders. Growth in digital, growth in physical, growth in full price and growth in off-price. We end the year with a healthy balance sheet and inventories below the prior year. There is a lot of uncertainty, our guidance reflects this tension between how good we feel about our strategy, how good we feel about our team, and the level of uncertainty relative to macro and geopolitical environment. I feel good about the things that we control.

The team is clear-eyed and focused on delivering for the customer, making sure that we build on the Net Promoter Scores, that we are at record levels, and the level of traction that we’re getting across all three nameplates.

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: Blake, I’d just add here that we have a business model that puts us at an advantage in this situation. We’re multi-brand, multi-category, multi-channel, serve off-price to luxury, so we can react and adjust depending on circumstances to serve the consumer and meet their needs.

Blake Anderson, Analyst, Jefferies: Great. Thank you. Tom, if you could add on AUR versus units, just curious how you think about that for the guide this year.

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: Sure, happy to. We’ve been very pleased with AUR continuing to grow, and we saw that continue in Q4, as well as in Q3, and before that. It’s really a reflection of our strategy to improve our assortment, to bring in better brands, to reimagine our stores, to modernize our digital channels. We’re feeling good that that trend will continue, and that’s included in our expectations going forward. Overall basket is also increasing. While units may be down slightly, we’re seeing an overall basket in our consumer buying more on a dollar basis. We see traffic steady and more predictable, and on the conversion side, maybe a slightly more choiceful consumer. Feel good about going forward from an AUR perspective.

Blake Anderson, Analyst, Jefferies: Great. Thanks so much.

Blake Anderson, Analyst, Jefferies3: Thanks, Blake.

Operator: Thank you. Our next question is coming from Matthew Boss of JP Morgan. Please go ahead.

Matthew Boss, Analyst, JP Morgan: Great, thanks. Tony, on performance across nameplates, could you elaborate on the inflection at Bloomingdale’s the last two quarters? How much of this you believe is execution relative to luxury consolidation? What is the range of outcomes for Macy’s go-forward banner comps next year within the flat consolidated guide? Tom, on the cadence, maybe could you just touch on top-line guidance for the first quarter relative to the 100 basis points or so of moderation that’s baked into the full year? How much of this is near-term trends that you’re seeing in the business today versus macro uncertainty that maybe you’ve prudently baked into the full year guide?

Blake Anderson, Analyst, Jefferies3: Thanks, Matt. Look, we feel terrific about the Bloomingdale’s business. There’s every indication that the growth continues because it’s so broad-based. It’s in the apparel business, it’s in the home business, it’s in the accessories business, it’s in our flagship stores, it’s in our smaller stores, it’s off price in Bloomie’s. The vendor community has rallied around Bloomingdale’s like never before. They are delivering for their customers at an exceptional level right now. We are continuing to fund from both a capital and from a SG&A standpoint, the growth potential of Bloomingdale’s. It’s important to the overall architecture of Macy’s, Inc.’s go-forward business. I feel strong about the opportunity for Bloomingdale’s. The disruption in the marketplace only gives more fuel to the fire. Relative to Macy’s, I’m pleased that we’re up to 200 stores now in the Reimagine program.

That’s 60% of our go-forward Macy’s fleet and 75% of the Macy’s store go-forward sales. You’ve moved from test to iterate to now we’re at the scale point, and I think the Reimagine program has the opportunity to continue to deliver comp growth for the Macy’s brand. As we mentioned on the call, our digital business at Macy’s is healthy, a third of our business and growing, with a nice balance between 1P and 3P. The external environment is where we have concern. The performance of our business relative to the fourth quarter, the first quarter so far, and the broad-based growth across all three nameplates gives us confidence in what we control.

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: Matt, I’ll continue with the quarter, Q1 trends and into the rest of the year. We are encouraged by Q4 performance. Our consumer skews more to the higher income, and we’re seeing them be more resilient. We’re seeing these trends continue into Q1 and pleased with that. However, we’re cognizant of that broader external environment and wanna take a prudent and measured approach to guidance. We also have 60% of the quarter from a volume basis left to go. When we look at the rest of the year, we’re looking at our comps on a multi-year stack, and on that basis, they’re more evenly paced through the year. We’re really thoughtfully considering that as we guide it for the full year on a comp basis.

We’re very confident of our strategies and continue to build on the A Bold New Chapter momentum as we move through the year.

Matthew Boss, Analyst, JP Morgan: Great color. Best of luck.

Blake Anderson, Analyst, Jefferies3: Thanks, Matt.

Operator: Thank you. Our next question is coming from Brooke Roach of Goldman Sachs. Please go ahead.

Brooke Roach, Analyst, Goldman Sachs: Good morning, and thank you for taking our question. Tony, with some competitors leaning into value in a bigger way this year, what actions are you taking to appeal to a more price-sensitive consumer amidst the inflationary macro backdrop in 2026? What are your plans for promotion and marketing on this? Thanks.

Blake Anderson, Analyst, Jefferies3: Thanks, Brooke, for the question. We have value as a part of our overall architecture as being a department store, promotional department store at Macy’s. Remember, we have backstage, we have regular promotional events. We have a private brand portfolio that offers meaningful value in the different categories that we play. So to me, it’s always a balance. We wanna offer promotion to make sure that we are continuing to capture the customer that is looking for deals or for value. At the same time, we don’t undershoot the customer who’s looking for the better brands and the range of price points that we can offer across our entire portfolio in both 1P and 3P and from off price to full price and certainly from Macy’s to Bloomingdale’s.

I like how we’re positioned. We’re really being requiring of ourselves in the market to make sure that we get the balance right, call it a barbell approach, but from good, better, best, we’re looking at it from every brand type and every price point to make sure that we’re executing and doing everything we can to capture all different levels of consumers.

Brooke Roach, Analyst, Goldman Sachs: Great. Just a follow-up for Adrian Mitchell. Can you detail the puts and takes to gross margin this year beyond tariffs? What are the core operational drivers of the improvement that you’re forecasting, and how should we be thinking about the cadencing and magnitude of that improvement as you move into the back half?

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: Sure. Thanks for the question, Brooke. The core underlying performance, and if I look at the full-year guide, we’re guiding down flat to 20 basis points and tariffs are 20-30 basis points. The underlying trend is positive. We expect gross margin to be strong and improve and expand as we move through the year. We would see that as well in Q1, except there’s a slightly higher tariff impact of 40-60 basis points in the quarter.

The items that are driving our gross margin performance, which is exactly what we saw in Q3 and Q4, are really the fundamental A Bold New Chapter initiatives of improving and creating a more relevant assortment, bringing in better brands, having better experiences across our omni-channel platform, both in stores and in digital, and that is supporting AUR and gross margin as we move forward. We do expect that trend to continue through the year. We haven’t guided to specifics on a quarterly basis, but we would expect that fundamental trend to be positive, reflecting our strategy.

Brooke Roach, Analyst, Goldman Sachs: Great. Thanks so much. I’ll pass it on.

Blake Anderson, Analyst, Jefferies3: Thanks, Brooke.

Operator: Thank you. Our next question is coming from Dana Telsey of Telsey Advisory Group. Please go ahead.

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: Hi, good morning, everyone, and nice to see the progress. Bloomingdale’s 59th Street, that fourth floor looks terrific with the brand expansion. On the Macy’s additional 75 stores being added to the Reimagine bucket, how are you thinking about the progression there versus the original stores that you added to the bucket? Do you expect the same type of results? Is there different timing, different things you’d add up or down? And then just on the number of store closures this year, how many will there be in 2026? And are you thinking of any number of store openings even for the smaller Bloomie’s? Thank you.

Blake Anderson, Analyst, Jefferies3: Thanks, Dana, for the question. The Reimagine program, we’re very proud of and pleased with the contribution. We’ve had seven of eight quarters of growth in the Reimagine and growth from the first 50 on forward. As we added the next 75, we began that in February. Those tactics roll out over the course of the first few weeks of the spring season. That’s additional colleagues in the store. That’s additional brands within the assortment. That’s better execution in the store, better storytelling, localized events. As a part of that program, we certainly have iterated before we got to scale.

I would tell you that as opposed to directing top-down centrally every aspect of the program, we are empowering locally more so in the next tranche of stores and even going back to the original stores, allowing our local leaders to determine where those colleagues can be best utilized. We’re also trying to make sure that we’re customizing local events so they resonate more meaningfully with the consumer base. We’re obviously amping up our work in visual and storytelling because we can see what a difference it makes in selling regular price and in selling the new brands that we’re adding to our assortment. I’ll let Tom cover the store closures.

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: Thanks for the question on the store closures, Dana. As we look at the non-go-forward stores, our goal is to have an optimized fleet on a market-by-market basis that supports our broader Macy’s omni-channel business. We’ve rigorously evaluated the future and current performance of our stores and the real estate value. As a result, we’re extending the closure timing of the remaining approximately 65 stores through 2028. While we don’t provide an advance closure guidance, I would look to that three-year timeframe for the remaining approximate store closures. That’ll allow us to wait for the most favorable real estate market in order to get the most value for our shareholders and for our business.

The way we can do that is we can be patient because of our strong balance sheet and cash flow and still invest in the business to drive our overall growth. As a result of this, we’re expanding and increasing our cash expectations from this initiative from a previous $500-$650 million to a total of $650-$700 million. That leaves us, after we’ve monetized approximately $400 million, $250-$300 million to go, which is worth about $1 a share. We look forward to running an optimized fleet that will support our broader business going forward.

Oliver Chen, Analyst, TD Cowen: Thank you.

Blake Anderson, Analyst, Jefferies3: Thanks, Dana.

Operator: Thank you. The next question is coming from Oliver Chen of TD Cowen. Please go ahead.

Oliver Chen, Analyst, TD Cowen: Hi, Tony and Tom. Which categories drove upside this quarter? Also as you think about private brands, where are you there? More simply, what are your thoughts on what it’ll take to positive comp above 2%-3% more consistently? Finally, in the realm of AI, what’s live today, you know, relative to the use cases and the KPIs you’re thinking of? I know AI is applying to supply chain as well as customer experience as well as marketplace, but are there thoughts in terms of how you’re evaluating proof points there? Macy’s Media Network had impressive momentum. It could probably be $500 million-$1 billion, though, so would love thoughts there as well. Thank you.

Blake Anderson, Analyst, Jefferies3: Thanks, Oliver. In terms of categories, let me start there. Good to see the growth in women’s contemporary apparel at both Macy’s and Bloomingdale’s. Continuing to see the strength in the dress business and the tailored clothing business, which I think underscores the dress up and return to office and the mix of both, a little bit dressier and casual tops and bottoms. Seeing growth in the accessory category, particularly fine jewelry, lab-grown diamonds, watches. You know, we feel good that there’s a broad-based interest in fashion across a multitude of categories. Fragrance is obviously a strength for both brands.

Private brands is still a area of development, so we’re still at the 12% or so of our total business, and we have reworked all of these brands. I would say that the team is keenly focused on improving the quality and improving the value offering despite the impact of tariffs. I’ll let Tom you know cover the you know future 2%-3%. We’re obviously not guiding that in 2026, but I think we intend to be a growth company. We are reworking the framework of this portfolio because we believe we can be a growth company. The fact that we had growth in Macy’s, Inc., growth at Macy’s, growth at Bloomingdale’s, growth at Bluemercury says that we’re on the right track.

I would just close with AI for us is an opportunity to combine the improvements in technology and data science with humanity and deliver a relationship-oriented business that is focused on the consumer. Our initiatives are focused on growing the business, on providing a simpler experience for our customers and our colleagues, and taking cost and driving efficiency throughout the operation. It’s not any one initiative. We are not buying shiny objects. We are solving problems and helping the overall business grow and improve the architecture of how we run the business. Tom, what would you add?

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: On the positive comps, Oliver, I think there are a number of things that are already growing and we can continue to expand on. First, is bringing in better brands and having a more relevant assortment. That is working, and I think we have a long runway there to continue to expand. The other is to look at our overall owned licensed marketplace, and we’ve been, in our new 8-K, sharing our OLM sales and focus more on OLM comp because we can and are managing the business across all different areas. That’s how the consumer shops us.

They don’t know exactly where it may be coming from or who owns the inventory, but we can create the best experience and provide more relevant assortment across all of our different means of delivering to the customer. The last thing I talk about, which I mentioned in the script, is this Macy’s ecosystem. I think there’s huge value here, and I talk and see the 40 million customers we know of that are in our loyalty programs. We know not just what they’re buying on a given day, but what their history is and what their preferences are. That’s where I look at the credit card, the Macy’s Media Network, and our knowledge and our capabilities in AI and data science that are all coming together, I believe, very nicely with strength to allow us to build and scale up in this area.

Oliver Chen, Analyst, TD Cowen: A follow-up. Digital has been impressive. It’s a big percentage of mix. What should we know about profitability rate versus dollars and any initiatives we should focus on? Thanks a lot, gentlemen.

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: Thank you, Oliver. Digital is a very important part of our business. It’s approximately a third of the business, and it is benefiting from the overall initiatives that we’re doing in store as we build up better brands. We’re also doing some things in digital specifically to modernize the look and feel and make digital and our various sites a place for fashion authority that builds on the Bold New Chapter. As we look forward, we’re going to continue to grow it along with the rest of the business. It is profitable, and we’re happy to sell via stores or digital. I just would end by saying that the stores are a foundation for the business. That’s what gives us a market-by-market presence that supports digital and again pulls everything together into one system.

Oliver Chen, Analyst, TD Cowen: Best regards.

Blake Anderson, Analyst, Jefferies3: Thanks, Oliver.

Operator: Thank you. Our next question is coming from Paul Lejuez of Citi. Please go ahead.

Blake Anderson, Analyst, Jefferies0: Hey, thanks, guys. I’m curious what it costs from a CapEx and SG&A investment to bring a store into the reimagined program, and also what kind of sales and EBIT dollar lift do you expect in year one and year two? Apologies if I missed it, but can you talk about CapEx plans for FY 2026? Just how that breaks down? Thanks.

Blake Anderson, Analyst, Jefferies3: Let me take the first part of that, Paul. Obviously, we’re pleased with the fact that we had 7 of 8 quarters of growth in the Reimagine program. The fact that we’re adding 75 additional stores, the fact that we’re continuing to comp positive, quarter to date. We are now at 60% of our Macy’s go-forward fleet in the Reimagine program and 75% of the store sales. It is accretive to what we’re doing. You know, our job, Tom and I, is to make sure that we are getting a return on the investments we’re making. These stores continue to be capital light with minor little to no in the first tranche of stores, in terms of CapEx.

In terms of OpEx, it’s designed per location based on the volume level and what we believe to be the incremental sales opportunity. We’ve now got it down to more of a science to go with the art and make sure that, again, along with the Net Promoter Score continuing to improve in these locations, we’re delivering a better experience that’s resulting in a better business.

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: Paul, I’ll build on that on the reimagined stores. As I came into the company, wanted to understand better those exact returns, and how much we’re investing. There was an analysis, detailed analysis done of how things were working out. What we saw was the investments, of course, are driving growth, which you saw, and as Tony mentioned, 7 of the last 8 quarters of reimagined stores are growing. What we’re also seeing is a good return on investment, and it’s meeting our expectations, over the years and as we progress. In addition, as we iterate, we’ll be even more effective in allocating resources and to improve our returns. On a CapEx basis, our CapEx was lower this year as we completed some major projects, most notably the China Grove, new distribution facility.

As we look to next year, our guidance is approximately $800 million, and the main part of that increase will be in Bloomingdale’s. We’re increasing our CapEx allocation because we think there’s a significant growth opportunity there, both organically and as we look at opening, potentially some stores, as Tony earlier noted. The other part of our investments are in the Macy’s store, our technology, and supply chain.

Blake Anderson, Analyst, Jefferies0: Thanks, Tom. Just one other P&L item. You gave some guidance on the other line, but can you talk about the split between credit card and media revenues and maybe anything you could share about the underlying health of the credit card portfolio? Thanks.

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: I’d be happy to. Our guide for other revenue is approximately $920 million. It’s up 7% versus prior year. Both the credit card and Macy’s Media Network are very healthy. When we look at the credit card, we’re up 24% in 2025. That’s due to a big improvement in the net credit quality of our customers. As we look forward, we expect it to grow along with the business, and our portfolio remains healthy. We’re getting higher applications and working very carefully across digital and in stores to expand usage. Macy’s Media Network, we expect to grow relatively stronger, and that is supported by our whole business and all of our partner brands and others, in addition to an Amazon ad initiative that we announced earlier.

I’d also just like to add with a note that we call it other revenue, but it’s really an integral part of the business. I want to say that the credit card and the Macy’s Media Network exists because of the broader Macy’s business and customers and brand strength. We look forward to talking about it more in the future.

Blake Anderson, Analyst, Jefferies0: Thank you. Good luck.

Blake Anderson, Analyst, Jefferies3: Thanks, Paul Lejuez.

Operator: Thank you. Our next question is coming from Simeon Siegel of Guggenheim. Please go ahead.

Blake Anderson, Analyst, Jefferies1: Thanks. Morning, everyone. Nice job. Did you say traffic was up and how much was AUR up in Q4? Then Tom Edwards, just really helpful to get the go forward breakdown and framing. Thanks for that. Can you help us think about maybe following up on the credit card revenues? How do we think about how credit card revenues are associated with go forward versus non-go forward? Then maybe similar, should we think about the gross margin SG&A profiles for the go forward versus non-go forward businesses? I’m assuming that the latter is going to be a healthier margin, so that would be helpful. Thank you.

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: Sure. Thanks, Simeon. In Q4, we continued to see, as we’ve seen through the year, AUR being positive versus prior year, driven by our A Bold New Chapter initiatives. In the quarter, we did have some weather events and traffic was a little softer. Overall, as you can see by our results, we were pleased that we were growing and continue to grow revenue and comp sales. From a credit card basis, a credit card exists across the whole business, and we’re very careful as we’re looking at go forward versus non-go forward to make sure we maintain a market presence on a store basis as well as a digital basis. So, I wouldn’t expect a material change as a result of our go forward initiatives.

Similarly, on a GM basis, our non-go forward stores are profitable. We have called them underproductive, but we’re really looking at them from a can we grow them profitably over the long term. I wouldn’t look at a major difference in gross margin between the two.

Blake Anderson, Analyst, Jefferies1: That’s really helpful.

Blake Anderson, Analyst, Jefferies3: Yes, I mean, I would just add the traffic outside of the weather event was essentially flat in stores and up online in both of all three of our brands, and that our AUR continues to improve and increase, again, across all three brands, mainly based on the mix of products more so than just the impact of tariffs.

Blake Anderson, Analyst, Jefferies1: That’s great. That’s really helpful. Thanks, guys. Is there any help how to think about go forward store expectations by banner?

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: Going forward, store expectations by banner?

Blake Anderson, Analyst, Jefferies1: Yeah.

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: When you’re talking go forward, I’m mainly talking about the Macy’s banner. We plan to close an additional 65 stores over the next 3 years. In the 8-K that we provided that updated our disclosure metrics, we’re really pleased to focus on our OLM go forward sales. I would say this shows a significant improvement over the last 3 years. In 2023, down almost 6%. In 2024, down almost 1%. This year, up 1.7%. I’d focus on a return to growth for those businesses.

Blake Anderson, Analyst, Jefferies1: Perfect. Thanks a lot, guys. Best of luck for the year.

Blake Anderson, Analyst, Jefferies3: Thank you, Simeon.

Operator: Thank you. Our next question is coming from Michael Binetti of Evercore ISI. Please go ahead.

Michael Binetti, Analyst, Evercore ISI: Hey, guys. Thanks for all the detail here. Could you just walk us through some of the flow-through metrics in the first quarter EBIT guidance? It looks like you’re targeting EBIT down about $130-$150. It was only down 20 basis points in fourth quarter. First quarter comps still slightly positive, and the tariffs are about the same impact as fourth quarter. I’m curious about what deteriorates a little bit in 1Q. Maybe could you just walk us through how the Reimagine 200 stores now contribute to the comps in 2026 guidance and how that evolves from first quarter through the rest of the year?

Maybe I can ask it as, you know, when we look at the spread of the Reimagine stores versus the go-forward comps or the total business comps, as you expand it to more stores and start to push the initiatives out sequentially through the year, does Reimagine start to break away, and push the comps higher? Do we see that spread widen?

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: Thanks for the question, Michael. I’ll take the first part in the Q1 flow through to EBIT. We are seeing a gross margin impacted by tariffs, 40-60 basis points and expect gross margin on the whole to be down in the quarter, but importantly up through the remainder of the year. The other change is in SG&A. We are expecting some additional investments in SG&A through the year, including in Q1, and those are really to support and drive growth. Our investments have driven growth in the past, and we’re looking forward to continue to invest, including in the Reimagine 200 to continue that pace. That’s really the key difference.

Blake Anderson, Analyst, Jefferies3: Relative to the Reimagined stores, Mike, you have a convergence that I think begins to happen by the time you get to the latter part of the year and certainly going into next year, where the majority of our fleet is in the Reimagined program. While they continue to outperform the remainder of the go forward fleet, the differential is smaller. We expect comp growth in our Reimagined stores, and that will help build our confidence for growth in the Macy’s brand going forward.

Michael Binetti, Analyst, Evercore ISI: Okay. Thanks very much, guys. Appreciate it.

Blake Anderson, Analyst, Jefferies3: Thanks, Mike.

Operator: Thank you. Our next question is coming from Bob Drbul of BTIG. Please go ahead.

Bob Drbul, Analyst, BTIG: Hi. Good morning. I guess two questions from me. The first one is, can you outline a bit around the progress that you think you’re making with younger consumers? I think you mentioned the prom event, but you know, just sort of where you’re really focused and what you’re seeing you know, with that consumer segment. I guess the second question I have is just around some of the newer brands that you’re bringing in. Can you just you know, detail a bit on full price selling and sort of what you’re seeing you know, with the promotional environment versus you know, your ability to obtain full price as you sort of work through the program. Thank you.

Blake Anderson, Analyst, Jefferies3: Sure. Thanks, Bob, for the question. Continuing to focus on the five different generations that are shopping with us, we believe we have a tremendous opportunity with the next generations of customers. As you mentioned, we held a prom event in over 200 locations, had tremendous turnout activating high schools across the country, continued to be a resource and destination for Sweet Sixteen. As I mentioned, 25,000 people getting married registered at Bloomingdale’s. 75% of them are in the Gen Z and Gen Alpha, I guess more so Gen Z kind of a population. Other categories like timepieces, fragrances, tend to skew younger and I think give us the opportunity to continue to grow with that cohort.

We are a destination for first job, first home, marriage, and the moments in life that I think expose you to these multiple generations of consumers. The newer brands we’re very pleased with, and I think the best indication of our full price sell-through and of our performance is the fact that the brands are expanding distribution with us and adding more stores. We believe in the breadth of good, better, best. We need to have the right mix of assortment and opening price point, as well as not undershoot the customer in terms of their interest in most wanted or sought-after brands.

We wanna have that breadth of Polo Ralph Lauren and Coach and Reiss and Theory, and at the same time, we wanna have the right, good, and better brands within our mix so that we can be a destination for customers that are looking for a variety of brands and price points.

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: Bob, I’d add that we ended the year with inventories down and in a very good position with increased newness. We have ample open to buy so we can chase into these trends should they occur and also flexibility otherwise. We’re looking to maintain our flexibility to deliver against these consumers.

Bob Drbul, Analyst, BTIG: Thank you. Good luck.

Blake Anderson, Analyst, Jefferies3: Thank you.

Operator: Thank you. Our next question is coming from Jay Sole of UBS. Please go ahead.

Jay Sole, Analyst, UBS: Great. Thank you so much. Tom, two questions for you. One is, you just talked about some of the SG&A investments. If you could elaborate a little bit more on what you’re spending on. And then within the interest expense guide of $110 million for fiscal 2026, can you maybe talk about what’s driving that? I think interest expense was $20 million in 4Q. So just kind of wondering why it’s going up on a run rate basis if we look into 2026. Thank you so much.

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: Sure. I’d be happy to help, Jay. On the SG&A investments, first and foremost, is in the Reimagine 200 as we expand that. In others, it’s across Macy’s and Bloomingdale’s, and investments in digital, and our technology areas. As I look at this year’s SG&A increase of approximately 1%-2%, it also includes lapping greater savings last year when we had more significant number of store closures impacting the year. In 2024, we closed 64 stores. In the past year, beginning of this year, announced 14 store closures. That’s also a factor in our SG&A. I would say that we maintain an always-on approach to generating savings. We have seen that pay off, and deliver results, through 2025, and we’re continuing that into 2026.

From an interest expense point of view, we’re really looking at a more consistent. Our overall debt level hasn’t changed aside from the refinancing at the very beginning of last year. You would expect the $110 million or the $100 million very consistent with the prior year.

Jay Sole, Analyst, UBS: Okay. Thank you so much.

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer, Macy’s, Inc.: Welcome.

Operator: Thank you. Our next question is coming from Marni Shapiro of Retail Tracker. Please go ahead.

Blake Anderson, Analyst, Jefferies2: Hey, guys. Congratulations. The stores look absolutely fantastic. Congratulations on that. Especially, very impressed with what I’m seeing at Macy’s. Could you talk a little bit about the customer coming into Macy’s? Are you getting I know Bloomingdale’s, I think you’ve talked about it quite a bit, and you’re seeing the generational shopping also. Are you seeing that at Macy’s, beyond, say, the prom event? Are you getting a younger customer back into the store? Is the online shopper a different shopper? Are you getting the younger customer in through online? And then I just have one quick follow-up on the beauty business. If you could just give us a quick update there about what’s changing there or expected to change in 2026.

Blake Anderson, Analyst, Jefferies3: Sure, Marni. Thanks for the question. Both Macy’s and Bloomingdale’s have an opportunity with the younger consumer. I think it’s both being a destination for all of these life’s moments that begin from bar mitzvahs, bat mitzvahs, confirmations, sweet sixteens, and yes, the prom events and the first jobs and the weddings that happen. That we are definitely driving those consumers along, in some cases with their parents or sisters or siblings, into the stores. Digital certainly is an opportunity for us to capture a younger consumer who’s looking for a broad array of price points and brands. Marketplace gives us the opportunity to lean into baby and into maternity and into other aspects of life that give us more exposure to the younger consumer.

The prom event, just as an example, ’cause I was in our stores at both Macy’s and Bloomingdale’s. You know, there’s just a tremendous amount of traffic in the stores, and it is all these young consumers. The activation of these high schools across the country was phenomenal, and I think just underscores the interest that these local communities have in national retailers kind of stepping up and doing something distinctively different, to make sure that we’re obviously a part of their life’s moments. What was your question on beauty?

Blake Anderson, Analyst, Jefferies2: I was just kind of curious. You guys have a stronghold in fragrance, obviously. There are a lot of new brands in beauty that are targeting a younger consumer. I see some of them filtering in, especially Bloomingdale’s. Are you pushing the envelope on that? Just an update, you know, on Bluemercury and any changes happening there.

Blake Anderson, Analyst, Jefferies3: Sure. You know, we had growth again in the fourth quarter at Bluemercury. Finished the year with growth across the nameplate. We are continuing to see the strength at Bluemercury in dermatological skincare and brands that are not as available in more mainstream stores.

Blake Anderson, Analyst, Jefferies2: Mm-hmm.

Blake Anderson, Analyst, Jefferies3: As it relates to Bloomingdale’s and Macy’s, we are absolutely leaning into newness, as well as partnering with the major brands on how we make the counter a greater destination, greater interest. How the beauty advisor with the free services offers her consultancy and helps people with their beauty regimen. Because we know we’re seeing back to young people, kids as young as 12, 13, 14 starting a skincare regimen. And the mother is looking for someone to help with that. You’re not just putting anything on your skin, you’re trying to find actually what’s gonna work with your skin.

We’re proud of the breadth of the assortment that we carry and that we continue to expand brands like Sisley and La Mer, and that we also introduce newness from Clarins, as well as play in the color space with brands like Victoria Beckham Beauty and others.

Blake Anderson, Analyst, Jefferies2: Fantastic. Thanks, guys. Best of luck on the next quarter.

Blake Anderson, Analyst, Jefferies3: Thanks, Marni.

Operator: Thank you. At this time, I’d like to turn the floor back over to Mr. Spring for closing comments.

Blake Anderson, Analyst, Jefferies3: Thank you everyone for your thoughtful questions. We appreciate the interest in Macy’s, Inc., and we look forward to updating you on our progress on the first quarter call. Have a great day and rest of the week. Take care.

Operator: Ladies and gentlemen, thank you for your participation. This concludes today’s event. You may disconnect your line or log off the webcast at this time, and enjoy the rest of your day.