Macy's, Inc. (NYSE:M) Q2 2019 Earnings Conference Call - Final Transcript
Aug 14, 2019 • 09:30 am ET
Paula A. Price
margin in the fall season is expected to be down slightly to a year ago. Our confidence in this trend improvement is based in the four factors I mentioned earlier. Inventory parity, merchant team liquidity, enhanced precision in our fall promotions and our productivity program.
Regarding inventory, we are expecting it to rise as we in the third quarter as we are intentionally bringing in receipts to support early November Sales and the truncated holiday season. We still expect to be below last year by the end of the fall season. As we look at asset sale gains plan for the back half of the year, we anticipate the balance of our $100 million guidance to occur in the fourth quarter. We now expect adjusted EPS to be in the range of $2.85 to $3.05 or $2.60 to $2.80 when excluding asset sale gains.
Any potential impact from a fourth tranche of tariffs is not contemplated in our guidance as we are still processing the details released yesterday, as Jeff noted. We are in active discussions with our vendors and suppliers to mitigate tariffs and minimize customer impact in 2019 as much as possible, and we'll know more in the coming weeks. With respect to our overall guidance, we are confident in the outcome of what we can control. We are also mindful of what we cannot control and we are providing guidance with prudent ranges that are cognizant of the current macro uncertainty.
You can find our complete guidance in the slide presentation we posted on our website earlier this morning. As we committed, we will be sharing more details on our funding our future productivity programs in early September. I along with Jeff and Hal Lawton, our President, will lay out our productivity strategy more fully, including detail on the six workstreams and anticipated total savings over the next three to five years.
To wrap up, while the second quarter was indeed a challenge, I'm confident that we're on the right track to accomplish both our short-term and long-term objective. We've strengthened our balance sheet through steady debt retirement and it is in a healthy position that allows us additional flexibility. We're making the right investments in the business and we are hyper-focused on profitable growth. We're making good progress on the initiatives that will enhance both customer and shareholder value. Our strategic initiatives are growing our sales, our productivity program will transform the way we work and diligent inventory management and capital allocation, our top of mind, day-in, day-out.
We're improving our management disciplines every day with data analytics, better tools and better processes and we have a strong team that is working together to win every day. With that, Jeff and I will be happy to take your questions.