Macy's, Inc. (NYSE:M) Q2 2019 Earnings Conference Call - Final Transcript

Aug 14, 2019 • 09:30 am ET

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Macy's, Inc. (NYSE:M) Q2 2019 Earnings Conference Call - Final Transcript

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Q & A
Executive
Jeff Gennette

focused on that, the entire organization is aligned and engaged to make that happen. It's a must-win for us. And we have a lot of confidence looking at our content, looking at our promotions, we take every opportunity to test, what's going to be important in the fourth quarter. So you saw just now on the Black Friday in July, we are really testing item price velocity using all of our analytics cap -- to make sure that we've got the right items built. We're very confident on our seasonal hiring, our entire fulfillment network, what we're doing with customer events and engagement. We also know that our digital business is a much higher penetration in the fourth quarter than the other three quarters, it penetrates higher, it's worth about 90 basis points of comp in the fourth quarter. And just lastly, Matt, to give -- to give, what gives us confidence is that we're bringing into the fall the full complement of all of the strategic initiatives in 2019 that we've been building and will be building and complete by the end of October. So that comes with us and that's why we're confident that we're going have a positive comp in the fall season to add to the positive comp that we had in the spring season.

Operator
Operator

[Operator Instructions] We'll take our next question from Kimberly Greenberger with Morgan Stanley.

Analyst
Kimberly Conroy Greenberger

Great, thank you so much. Good morning. Jeff, I wanted to just ask about the -- the store base and how you're thinking about it. You talked about the brick and mortar fleet being healthier. I'd love to hear what -- what you mean by that. It would seem, if the digital business is still growing double-digits, it would seem that the stores are still negative. But as you look at the fleet, what is it that you're seeing that's healthier and do you need to take another look at your store base with maybe a potential eye towards some additional store closures? Thank you.

Executive
Jeff Gennette

Yeah, Kimberly. So let's just talk about stores in general. So just repeat our store segmentation strategy. So we have our flagships, which include Herald Square, we've got our Magnet stores, which really are touched on by our growth initiatives, and then we have our neighborhood stores, which are very important for fulfillment and convenience for our customers that live in those localized areas. So we really have a line of sight on what growth looks like for Magnets and Flagships. The growth strategy really led by our Growth50 gave us all the confidence in getting growth out of those buildings. We talked about how those Growth50 stores had outperformed other stores in the Growth 100 by 3 full points. Those stores are positive campaign, this -- customer engagement in those particular stores is much higher than our other store fleet. So what we've done is we've applied all of those learnings to the next 100 stores, which is what we call the