Neil Goh

Neil Goh, on for Oliver Chen, asked whether the heightened promotional environment expected in the back half is driven more by the competitive landscape or by Macy's own inventory position. He also asked for key factors being watched regarding consumer health.

Answer

CEO Tony Spring stated that while the company monitors all economic indicators, its focus is on controlling its own inventory health, which is well-positioned with good composition and newness. He emphasized the strategy is to provide compelling value without simply giving away margin. COO and CFO Adrian Mitchell added that the company is controlling what it can, focusing on internal opportunities to improve the customer experience and drive growth, regardless of the external environment.

The analyst inquired about the drivers of the strong U.S. growth, including customer and category specifics, future initiatives for the region, and the recovery of the aspirational customer.

Answer

The executive explained that the 41.6% U.S. GMV growth was driven by a 48% increase in top customers, particularly in ready-to-wear categories and key affluent regions. Future initiatives will continue to focus on this high-end segment with unique experiences and targeted marketing. While there are 'green shoots' among aspirational customers, the primary growth driver remains the top-spending clientele.

Asked about expectations for inventory management in 2024, the current promotional environment, and any implications for merchandise margins.

Answer

The company feels well-positioned with healthy inventory and will continue its disciplined approach of chasing demand. They are not seeing or anticipating an unusually elevated promotional environment, which is a positive for merchandise margins.