Macy's, Inc. (NYSE:M) Q3 2019 Earnings Conference Call - Final Transcript

Nov 21, 2019 • 08:00 am ET

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Macy's, Inc. (NYSE:M) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, and welcome to Macy's, Inc. Third Quarter 2019 Earnings Conference Call. Today's hour-long conference is being recorded.

I would now like to turn the call over to Mike McGuire, Head of Investor Relations. Please go ahead.

Executive
Mike McGuire

Thank you, operator. Good morning, everyone, and thanks for joining us on this conference call to discuss our third quarter 2019 results, and our full year 2019 outlook.

With me on the call today are Jeff Gennette, our Chairman and CEO; Paula Price, our CFO; and Hal Lawton, our President. Jeff and Paula have several prepared remarks to share, after which Hal will join them for a question-and-answer session.

Given the time constraints and the number of people who want to participate, we ask that you please limit your questions to one with a quick follow-up. In addition to this call and our press release, we have posted a slide presentation on the Investors section of our website, macysinc.com. Presentation summarizes the information in our prepared remarks as well as some additional facts and figures regarding our operating performance and guidance. Additionally, our Form 10-Q will be filed in a few weeks and that, too, will be available on our website at that time.

Keep in mind 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 the Company's filings with the Securities and Exchange Commission.

In discussing the results of our operations, we will be providing certain non-GAAP financial measures. You can find additional inflation regarding these non-GAAP financial measures as well as others used in our earnings release on the Investors section of our website.

As a reminder, today's call is being webcast on our website. A replay will be available approximately two hours after the conclusion of this call, and it will be archived there following the call for one year.

Now I'd like to turn this over to Jeff.

Executive
Jeff Gennette

Thank you, Mike. Good morning, everyone, and thanks for joining us. As you saw in our press release this morning, after seven consecutive quarters of positive comparable sales, Macy's Inc. had a tough quarter, with comp sales down 3.5%. While we anticipated a negative comp as we were lapping a very strong quarter last year, the sales' deceleration was steeper than we expected. However, having cleared the excess inventory we faced earlier in the year, we were able to take a more balanced approach to sales and profit in the quarter. Versus the first half of this year, this resulted in a significantly improved margin compression on lower sales.

Let me share some detail on the drivers of our sales decline. Our third quarter sales were impacted by continued soft international tourism, weaker-than-anticipated performance in our lower tier malls and the late arrival of cold