M 10-K & 10-Q changes, risk factors and insider trading

In evaluating the Company, the risks described below and the matters described under “Forward-Looking Statements” should be considered carefully. Such risks and matters are numerous and diverse, may be experienced continuously or intermittently, and may vary in intensity and effect. Although the risks are organized by heading, and each risk is described separately, many of the risks are interrelated. Any of such risks and matters, individually or in combination, could have a material adverse effect on our business, financial condition, results of operations and cash flows, as well as on the attractiveness and value of an investment in the Company's securities. You should not interpret the disclosure of any risk factor to imply that the risk has not already materialized. While we believe we have identified and discussed below the key risk factors affecting our business, there may be additional risks and uncertainties that are not presently known or that are not currently believed to be significant that may adversely affect our business, financial condition, results of operations or cash flows in the future.

We plan to continue to make value-enhancing investments to support these initiatives primarily focused on digital and technology, data and analytics, supply chain modernization and omni-channel capabilities. These initiatives have required and will continue to require our management, colleagues,colleagues and contractors to make changes in our business operations and to improve productivity and profitability, and are subject to the ability to attract and retain skilled personnel to support the initiatives. We face challenges in executing the A Bold New Chapter strategy and initiatives in the current environment of heightened inflation, increased interest rates,tariffs, economic uncertainty, geopolitical disruption and other macroeconomic conditions that may impact discretionary spending. Our ability to achieve sustainable, profitable growth is subject to the successful implementation of our strategic plans and realization of anticipated benefits and savings. If we are unable to successfully execute our strategic plans and initiatives to achieve the intended results or these investments or initiatives do not perform as expected or create implementation or operational challenges, our profitability and growth could suffer.

We may not timely identify or effectively respond to consumer needs, expectations, or trends, which could adversely affect our relationship with customers, the demand for our products and services,services and our market share.

The success of our business depends in part on our ability to identify and respond to evolving trends in demographics,demographics and shifts in consumer preferences, expectations and needs, unexpected weather conditions, public health issues or natural disasters, while also managing appropriate inventory levels in our stores and distribution or fulfillment centers and maintaining an excellent customer experience.needs. It is difficult to successfully predict the products and services our customers will demand. As customers expect a more personalized experience, our ability to collect, use and protect relevant customer data is important to our ability to effectively meet their expectations, but is subject to the impact of legislation or regulations governing data privacy, security and other external factors. Customer preferences and expectations related to sustainability of products and operations are also increasing. If we do not successfully differentiate the shopping experience to meet the individual needs and expectations of or within a customer group, we may lose market share with respect to those customers.

Our profitability depends on our ability to manage inventory levels and merchandise selection. Overestimating customer demand for merchandise can result in the need to record unplanned and incremental inventory discounts or liquidations and sell excess inventory at clearance prices, which would negatively impactimpacts our gross margins and operating results. Underestimating customer demand for merchandise can lead to insufficient inventory to meet demands, missed sales opportunities and negative customer experiences. If we are unable to protect against inventory shortage, our results of operations and financial condition could be adversely affected.

The Company faces significant competition and challenges as consumers continue to migrate to other shopping channels and depends on its ability to differentiate itself in retail's ever-changing environment.

We face pressures to not only compete from a price perspective with our competitors, some of whom sell the same products, but also to differentiate Macy's, Inc.'s merchandise offerings, services and shopping experiences to stay relevant as a modern department store in retail's ever-changing environment. Macy's launchedcontinues Onto 34thexecute its Bold New Chapter strategy which includes elevating merchandise relevance, evolving its store footprint, investing in the growth areas of the business and State of Day, new private brands, in 2023 and 2024, respectively, refreshed I.N.C. and Style & Co. brands in 2023 through 2024, and expects to refresh or replace all existing brands inmodernizing its privateoperating brands portfolio through 2025. Macy's digital marketplace offers a variety of brands from third party sellers and the Company launched a Bloomingdale's marketplace in 2023 to introduce customers to new merchandise options. We continue to invest in our omni-channel capabilities, focusing on search engine optimization, site enhancements, and more transparent pricing, and seek to improve the customer experience through faster online delivery and higher product in-stocks.model. Insufficient, untimely or misguided investments in these areas could significantly impact our profitability and growth.

We launchedhave overlayed successful innovations from the First 50 Stores to an additional 75 stores (the "Reimagine 125") as a key component of the Bold New Chapter strategy to test initiatives such as focused staffing in key departments, enhanced merchandise offerings, modern visual presentations and unique store-level activations and community events. We have opened new off-mall smaller store formats – Macy's small format, Bloomie's and Bloomingdale's the Outlet – in selected markets. In 2022, we introduced permanent Toys “R” Us shops within all Macy's locations. While these store investments, off-mall store formats,formats and in-store shops are intended to improve the customer store experience and drive traffic, realization of these benefits may or may not occur.

We continue to explore opportunities to monetize our real estate portfolio, including sales of stores as well as non-store real estate, such as warehouses, outparcels and parking garages. We also continue to evaluate our real estate portfolio to identify opportunities where the redevelopment value of our real estate exceeds the value of non-strategic operating locations. This strategy is multi-pronged and may include transactions, strategic alliances or other arrangements with mall developers or other unrelated third-parties. Where feasible, we may subdivide an existing parcel, continue to operate a store and redevelop any excess parcel for mixed-use, or close the store and redevelop an entire parcel into a mixed-use development, in either event selling the parcel once the site development plan is approved by governmental authorities. Due to the cyclical nature of real estate markets and the risks of real estate development, the performance of our real estate strategy is inherently volatile and could have a significant impact on our results of operations or financial condition.

Our expenses relating to employee health benefits are significant. MedicalTotal planhealth care costs have risen over the past several years driven primarily by pharmacy costs, broader medical industry cost increases have been driven by factors such as a rise in high-cost claimants, high-cost conditions, high utilization of outpatient facilities, physicians and in-hospital stays, and demographic shifts to an older enrollment population. Unfavorable changes in the cost of employee health benefits could negatively affect our financial results and cash flow.

In 2005, in connection with the sale of most of the Company's credit card accounts and related receivable balances to Citibank, N.A. ("Citibank"), the Company and Citibank entered into a long-term marketing and servicing alliance pursuant to the terms of a Credit Card Program Agreement ("Credit Card Program"). Subsequent to this initial arrangement and associated amendments, on December 13, 2021, the Company entered into the sixth amendment to the amended and restated Credit Card Program with Citibank (the "Program Agreement"), pursuant to which Citibank issues, maintains and services Macy's and Bloomingdale's private label and co-branded credit cards. Under the Program Agreement, which extends until March 31, 2030, Citibank owns the credit card receivables generated from sales through the credit cards and the Company receives fees and shares in profits based on a tiered return on the receivables portfolio net of program expenses. Credit card revenues, net were $537$669 million, or approximately 2.4%3.1% of net sales, for 2024.2025. Deterioration in economic conditions could adversely affect the volume of new credit accounts, the amount of credit card program balances and the ability of credit card holders to pay their balances. These conditions could result in the Company receiving lower payments under the credit card program.

Credit card operations are subject to many federal and state laws that may impose certain requirements and limitations on credit card providers. Citibank and our subsidiary bank,Macy's FDSCredit Bank,Operations, LLC, may be required to comply with regulations that may negatively impact the operation of our proprietary credit card. This negative impact may affect our revenue streams derived from the credit cards receivables portfolio and our financial results.

In March 2024, the Consumer Financial Protection Bureau finalized a rule to amend Regulation Z to lower the safe harbor dollar amount credit card companies can charge for late fees to $8 from the current level of up to $41 to $8 for a missed payment. TheA federal court vacated the rule has been stayed as a result of ongoing litigation. A decrease in lateApril fees assessed would reduce credit card revenue.2025. The Company iscontinues to closely monitoringmonitor developments on this matter.

Significant changes in interest rates, decreases in the fair value of plan assets and timing and amount of benefit payments could affect the funded status of our plans and could increase future funding requirements of the plans. A significant increase in future funding requirements could have a negative impact on our cash flows, financial condition orcondition, results of operations.operations or cash flows.

We rely extensively on information technology systems and related personnel to collect, analyze, process, store, manage, transmit and protect transactions and data. Some of these systems are managed or provided by third-party service providers, including certain cloud platform providers. In managing our business, we also rely heavily on the integrity and security of, and consistent access to, this operational and financial data for information such as sales, customer data, employee data, demand forecasting, merchandise ordering, inventory replenishment, supply chain management, payment processing, order fulfillment, customer service,service and post-purchase matters. For these information technology systems, applications and processes to operate effectively, we or our service providers must maintain and update them. Delays in the maintenance, updates, upgrading or patching of these systems, applications or processes could impair, and on occasion have impaired, their effectiveness or expose us to security risks.

Our systems and the third-party systems with which we interact are subject to, and on occasion have experienced, damage or interruption from a number of causes, including power and other critical infrastructure outages, computer and telecommunications failures, computer viruses, security breaches, internal or external data theft or misuse, cyberattacks, responsive containment measures by us that may involve voluntarily taking systems off line, natural disasters and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes or other extreme weather events, public health concerns such as pandemics, military conflicts, acts of war, terrorism or civil unrest, other systems outages, inadequate or ineffective redundancy,redundancy and design or usage errors or malfeasance by our employees, contractors or third-party service providers. Although we and our third-party service providers seek to maintain our respective systems effectively and to successfully address the risk of compromise of the integrity, security and consistent operations of these systems, these efforts are not always successful. As a result, we or our service providers could experience errors, interruptions, delays or cessations of service in key portions of our information technology infrastructure, which could significantly disrupt our operations or impair data security, impact our ability to operate or access communications, financial or banking systems, be costly, time consuming and resource-intensive to remedy and adversely impact our reputation and relationship with customers, suppliers, shareholders or regulators.

We are making, and expect to continue to make, substantial investments in our information technology systems, infrastructure and personnel, in some cases with the assistance of strategic partners and other third-party service providers. These investments involve replacing existing systems, some of which are older, legacy systems, outsourcing certain technology and business processes to third-party service providers, including the adoption of Generativegenerative and agentic artificial intelligence ("AI") in certain processes, making changes to existing systems including the migration of applications to the cloud, maintaining or enhancing legacy systems, or designing or acquiring new systems. These efforts can result in significant potential risks, including failure of the systems to operate as designed, potential loss or corruption of data, changes in security processes and internal controls, cost overruns, implementation delays or errors and disruption of operations.

We use AI as a tool designed to improve customer experience and operational efficiency. AI tools assist us in areas such as customer service, supply chain, personalization, coding, human resources queries, security, marketing and advertising. We include AI in our annualmandatory compliance training andtraining, maintain guidelines requiring internal review and approval for certain AI tools.tools and monitor AI systems for proper functioning. Even with careful governance, use of AI can produce incorrect output, release private or confidential information, reflect biases,personal or violatebusiness information used to train models, create algorithmic bias and unintentional discrimination, or generate output that violates intellectual property rights.rights of others. The autonomous nature of agentic AI may present challenges in aligning with current AI governance, including testing protocols, and increase risk that agents may learn to circumvent guardrails. We also face uncertainty regarding evolving federal or state regulation of AI. These risks could have adverse business, legal or regulatory impact or harm our reputation.

Through our information technology systems, we are able to provide an improved overall shopping experience that empowers our customers to shop and interact with us from a variety of electronic devices and digital platforms. We use our digital platforms as sales channels for our products and services, as methods of providing inspiration and advertising through Macy's Media Network,Network and as sources of product and other relevant information to our customers to help drive sales. We also have multiple online communities, digital platforms and knowledge centers that allow us to inform, assist and interact with our customers. The retail industry is continually evolving and expanding, with a significant increase in sales initiated online and via mobile applications. We must effectively respond to new developments and changing customer preferences with respect to a digital and interconnected experience. We continually seek to enhance our online and digital properties to provide an attractive, user-friendly interface for our customers. Disruptions, delays, failures or other performance issues with these customer-facing technology systems, or a failure of these systems to meet our or our customers' expectations, could impair the benefits they provide to our business and negatively affect our relationship with our customers and, as a result, our financial performance and results of operations.

A breach of our information technology systems could adversely affect our reputation, business partner and customer relationships and operations,operations and result in higher costs.

Through our sales, marketing activities,activities and use of third-party information, we collect and store certain non-public personal information that customers provide to purchase products or services, enroll in promotional programs, register on websites, or otherwise communicate to us. This may include phone numbers, driver license numbers, contact preferences, personal information stored on electronic devices,devices and payment information, including credit and debit card data. We gather and retain information about employees in the normal course of business. We may share sensitive Company data with vendors that assist with certain aspects of our business, such as social media and data analytics firms. In addition, our digital operations depend upon the transmission of confidential information over the internet, such as information permitting cashless payments.

We employ safeguards for the protection of this information and have made significant investments to secure access to our information technology network, the importance of which has increased due to many of our colleagues working remotely. For instance, we have implemented authentication protocols, installed firewalls and anti-virus/anti-malware software, established data security breach preparedness and response plans, conduct continuous risk assessments,assessments and mitigate software vulnerability with security patches. We also employ encryption and other methods to protect our data, promote security awareness with our employees and work with business partners in an effort to create secure and compliant systems.

Protections we have in place to safeguard this information may be compromised as a result of third-party security breaches, theft, cyberattacks, including the use of malicious codes, worms, phishing, spyware, denial of service attacks and ransomware errors by employees or employees of third-party vendors, or contractors, misappropriation of data by employees, vendors or unaffiliated third-parties, or other irregularities that may result in persons obtaining unauthorized access to Company data. Unauthorized parties may attempt to gain access to our systems or facilities, or those of third parties with whom we do business, through fraud, trickery, or other forms of deception to employees, contractors, vendors and temporary staff.

Retail data frequently targeted by cybercriminals includes consumer credit card data, personally identifiable information, including social security numbers,numbers and health care information. For retailers, point of sale and e-commerce websites are often attacked through compromised credentials, including those obtained through phishing, vishing and credential stuffing. Other methods of attack include advanced malware, the exploitation of software and operating vulnerabilities,vulnerabilities and physical device tampering/skimming at card reader units. We believe these attack methods will continue to evolve. In addition, AI tools may provide hackers with more sophisticated methods of cyberattacks.

Remote work has also created additional challenges to our ability to protect remote workers, corporate networks and cloud environments. We are identifying, tracking and mitigating advanced phishing, malware and attempted credential compromises daily. These attacks are typically occurring on home networks and migrate to the corporate network. However, despite instituting controls for the protection of information, the techniques used to obtain unauthorized access, disable or degrade service change frequently and our systems and networks may nevertheless remain vulnerable to threats and attacks. To date, no cybersecurity incident or attack has had a material impact on our business or results of operations. Unauthorized parties may attempt to gain access to our systems or facilities, or those of third parties with whom we do business, through fraud, trickery, or other forms of deception to employees, contractors, vendors and temporary staff. During the normal course of business, we have experienced and expect to continue to experience attempts to compromise our information systems. We may be unable to protect the integrity of our systems or company data. An alleged or actual unauthorized access or unauthorized disclosure of non-public personal information could:

•materially damage our reputation and brand, negatively affect customer satisfaction and loyalty, expose us to individual claims or consumer class actions, administrative, civil or criminal investigations or actions,actions and infringe on proprietary information; and

We continue to evaluate the impact of currently effective tariffs,tariffs includingand potential future retaliatory tariffs, as well as other recent changes in foreign trade policy and the U.S. Administration on our supply chain, costs, sales and profitability, and are working through strategies to mitigate such impact, including reviewing sourcing options and working with our vendors and merchants. At this time, it is unknown how long U.S. tariffs on Chinese and other goods will remain in effect or whether additional tariffs will be imposed. Depending upon their duration and implementation, as well as our ability to mitigate their impact, these changes in foreign trade policy and any recently enacted, proposed and future tariffs on products imported by us from China, as well as general uncertainty in the tariff environment, could negatively impact our business, results of operations and liquidity if they seriously disrupt the movement of products through our supply chain or increase their cost.

The Company is a party to contracts, transactions and business relationships with various third parties, including suppliers, service providers, lenders and participants in joint ventures, strategic alliances and other commercial relationships. In some cases, we depend upon such third parties to provide products, services, advertising, technology infrastructure, development and support, data analytics, logistics, other goods and services to operate our business in the ordinary course, extensions of credit, credit card accounts and related receivables,receivables and other matters. Furthermore, third-party vendors may sell products directly to consumers in addition to, or in some cases in lieu of, traditional wholesale channels such as independent stores and retail chains. As our business model depends on offering quality and relevant merchandise brands from third-party vendors in addition to our own private label products, any material disruption in our relationship with such vendors, or material disruption in the products or services provided by other third parties, could adversely affect our revenues, expense structure, earnings and operations.

The Company's business is subject to discretionary consumer spending, unfavorable economic and political conditions,conditions and other related risks.

Unfavorable global, domestic or regional economic or political conditions and other developments and risks could negatively affect our business and results of operations. For example, unfavorable changes related to interest rates, rates of economic growth, fiscal and monetary policies of governments, inflation, deflation, tax rates and policy, unemployment trends, energy prices,prices and other matters that influence the availability and cost of merchandise, consumer confidence, spending and tourism could negatively affect our business and results of operations. Unstable political conditions, civil unrest, terrorist activities, armed conflicts or events of extreme violence, including any escalation of the conflict between Russia and Ukraine and the Israel-HamasIran war, may disrupt commerce and could negatively affect our business and results of operations.

Litigation,Legislation, legislation,litigation, regulatory developmentsrequirements or non-compliance could adversely affect our business and results of operations.

We are subject to various federal, state and local laws, rules, regulations, inquiries and initiatives in connection with both our core business operations and our credit card and other ancillary operations (including the Credit Card Act of 2009 and the Home Owners' Loan Act of 1933). Recent and future developments relating to such matters could increase our compliance costs and adversely affect the profitability of our credit card and other operations. Our effective tax rate is impacted by a number of factors, including changes in federal or state tax law, interpretation of existing laws and the ability to defend and support the tax positions taken on historical tax returns. Certain changes in any of these factors could materially impact the Company's effective tax rate and net income. The Inflation Reduction Act, enacted on August 16, 2022, includes a number of provisions that may impact the Company, including a corporate alternative minimum tax on certain large corporations, incentives to address climate change mitigation and other non-income tax provisions, including an excise tax on the repurchase of our stock.

In addition, our business is subject to complex and rapidly evolving laws addressing data privacy and data protection and companies are under increased regulatory scrutiny with respect to these matters. The Federal Trade Commission and many state attorneys general are interpreting federal and state consumer protection laws to impose standards for the online collection, use, dissemination and security of data. The interpretation and application of existing laws regarding data privacy and data protection are in flux and many states are considering new regulations in this area. Data privacy laws enacted in California, Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Kentucky, Maryland, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, Oregon, Rhode Island, Tennessee, Texas, Utah,Utah and Virginia (as of June 20242025) and other applicable U.S. privacy laws or new state or federal laws may limit our ability to collect and use data, require us to modify our data processing practices or result in the possibility of fines, litigation or orders which may have an adverse effect on our business and results of operations. The burdens imposed by these and other laws and regulations that may be enacted, or new interpretations of existing laws and regulations, may also require us to incur substantial costs to reach compliance or change the manner in which we use data.

We have identified certain climate change-related risks that have impacted or may in the future impact our business over the short-, medium- and long-term. The nature of these risks depends on both the physical aspects of climate change as well as legal, regulatory,regulatory and market requirements, pressure to reduce our carbon footprint and our ability to understand and respond to rapidly evolving developments. Climate change and related measures could have adverse impacts on the Company's business, financial condition and results of operations, including, but not limited to:

We face increasing pressure to demonstrate our products are environmentally-friendly. Our efforts to mitigate that risk include using materials or processes that are third-party certified for environmentally-friendly attributes like OEKO-TEX® as well as U.S. Cotton Trust Protocol ("USCTP") which provides traceable and preferred cotton. Macy's and Bloomingdale's have curated sitelets online to help strengthen Macy's, Inc.'s position of being identified as a responsible retailer, committed to climate-related and broader environmental topics. These mitigation efforts may not be successful.

•Acute Physical Risk. The Macy's, Inc. physical infrastructure and operations, which may be affected, damaged or interrupted by more frequent and severe weather events such as pluvial /fluvial/coastal flooding, tropical cyclone, drought,drought and wildfire. In addition to damaging physical infrastructure, such events may also impact our workforce and shopping accessibility. This includes the possibility of extreme weather events disrupting Macy's, Inc.'s infrastructure, resulting in increased insurance costs and capital expenditures. The Texas ice storms and coastal hurricanes are both acute physical risk events that have affected Macy’s, Inc. in the past and serve as proxies for other potential acute risks.

•Risk Related to Resource Use. There is increasing scrutiny on the use of resources, particularly energy sources and energy use. Pressure from regulators, consumers and other stakeholders to find alternatives and/or energy-efficient solutions to reduce our use of natural resources is escalating. Through memberships in industry groups such as Textile Exchange, we are working to reduce the environmental and social impact of apparel and footwear products around the world. Additionally, we have engaged World Wildlife Fund to help develop our water stewardship strategy within our private brand supply chain.

Changes in the credit and capital markets, including market disruptions, limited liquidity and interest rate fluctuations, may increase the cost of financing or restrict our access to this potential source of future liquidity. A downgrade in the ratings that rating agencies assign to the Company's short- and long-term debt has and may continue to negatively impact our access to the debt capital markets and increase our cost of borrowing. In addition, our asset-based credit facility requires us to maintain a specified fixed charge coverage ratio. Our ability to comply with the ratio may be affected by events beyond our control, including prevailing economic, financial and industry conditions. If our results of operations deteriorate to a point where we are not in compliance with our debt covenants,covenants and we are unable to obtain a waiver, much of our debt would be in default and could become due and payable immediately. Our assets may not be sufficient to repay in full this indebtedness, resulting in a need for an alternate source of funding. We cannot make any assurances that we would be able to obtain such an alternate source of funding on satisfactory terms, if at all,all and our inability to do so could cause the holders of our securities to experience a partial or total loss of their investments in the Company.

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to promote understanding of the results of operations and financial condition of the Company. MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying Notes to Financial Statements (Part II, Item 8 of this Form 10-K). This section generally discusses the results of operations for 20242025 compared to 20232024 and 2022.2023. The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for the fiscal years ended January 31, 2026 to February 1, 2025 toand February 3, 2024 and January 28, 2023.2024. For a full discussion of changes from the fiscal year ended February 3,1, 20242025 to the fiscal year ended JanuaryFebruary 28,3, 2023,2024, refer to Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended February 3,1, 20242025 (filed March 22,21, 20242025). This section also contains forward-looking statements that reflect the Company's plans, estimates and beliefs. The Company's actual results could materially differ from those discussed in these forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those discussed below and elsewhere in this report, particularly in "Risk Factors" and "Forward-Looking Statements."

OnThe FebruaryCompany 27,completed 2024,its second year of the Companyexecution announcedof its new three-year strategy, A Bold New Chapter,Chapter strategy, which firmlyis places energy and focusfocused on the needs of our customer and is centered on an enhanced omni-channel shopping experience across all three of our nameplates. This strategy prioritizes improving the shopping environment and elevating the customer experience, while reallocating capital fromclosing underproductive Macy's stores to focus resources and investments on its go-forward enterprise. TheDuring fiscal 2025, the Company viewedcontinued fiscalto 2024make asprogress a transition and investment year in its implementation ofon the three pillars within the A Bold New Chapter strategy, and has made progress as follows:

Comparable sales highlights for 20242025 versus 20232024 related to components of the A Bold New Chapter strategy are as follows:

•Macy's, Inc. comparable sales were downup 2.0% on an owned basis and down 0.9%1.5% on an owned-plus-licensed-plus-marketplace basis.

◦Macy's, Inc. go-forward business comparable sales, inclusive of go-forward locations and digital across nameplates, were downup 1.7% on an owned basis and down 0.6% on an owned-plus-licensed-plus-marketplace basis.

◦Macy's comparable sales were downup 2.6% on an owned basis and down 1.6%0.4% on an owned-plus-licensed-plus-marketplace basis. Macy's go-forward business comparable sales, inclusive of Macy’s go-forward locations and digital, were downup 2.4% on an owned basis and down 1.3%0.6% on an owned-plus-licensed-plus-marketplace basis.

•FirstReimagine 50125 locations comparable sales, included within Macy's go-forward locationsbusiness comparable sales, were up 1.6%1.0% on an owned basis and up 1.8% on an owned-plus-licensedowned-plus-licensed-plus-marketplace basis.

◦Bloomingdale's comparable sales were up 1.7% on an owned basis and up 2.5%7.4% on an owned-plus-licensed-plus-marketplace basis.

◦Bluemercury comparable sales were up 4.0% on an owned basis.1.6%.

See pages 2930 to 31 for reconciliations of the non-GAAP financial measures presented above to the most comparable U.S. generally accepted accounting principles ("GAAP") financial measures and other important information.

The decreaseincrease in other revenues from 20232024 to 20242025 was driven by a $82$132 million, or 13%25% decrease,increase, in credit card revenues.revenues Thiswhich decreasecontinued wasto primarilybe driven by highera netstrong credit losses as compared to 2023.portfolio. Macy Media Network grew $21$12 million, or 14%7% from 20232024, duedriven toby increasedbenefits vendorfrom engagementour andAmazon higherad advertiserpartnership andwhich campaignstarted counts.this year.

The $171$230 million and $1.0$171 billionmillion of impairment, restructuring and other costs recognized in 20242025 and 2023,2024, respectively, primarily relate to actions that align with the Company's A Bold New Chapter strategy. The primary costs consist of $88$160 million and $957$88 million non-cash asset impairment charges and $44$47 million and $55$44 million of restructuring charges recognized in 20242025 and 2023,2024, respectively. The impairment charges recognized in fiscal 20242025 and 20232024 primarily relate to thenon approximately 150go-forward locations planned for closure as part of the A Bold New Chapter Strategy and the remaining amount is associated with corporate and other assets. The restructuring charges recognized in fiscal 20242025 and 20232024 consistedare primarily of cash expenditures related to employee termination and severance charges.

The Company recorded non-cash net benefit plan income related to the Company's defined benefit plans. This income includes the net amount of interest cost, expected return on plan assets and amortization of prior service costs or credits and actuarial gains and losses. The increase in benefitBenefit plan income remained flat from 20232024 to 2024 was mainly driven by an increase in discount rates as a result of market conditions.2025.

SettlementPension settlement charges in 20242025 were primarily related to the pro-rata recognition of net actuarial losses associated with the Company's defined benefit retirement plans as the result of lump sum distributions associated with retiree distribution elections. Settlement charges in 2023 were higher than 2024 as they primarily related to the transfer of fully funded pension obligations for certain retirees and beneficiaries through the purchase of a group annuity contract with an insurance company, which occurred in the second quarter of 2023.

The 15%16% decrease in net interest expense, excluding losses on early retirementextinguishment of debt, from 20232024 to 20242025 was primarily driven by ana increasedecrease in interest incomeexpense onas investments.a result of the reduction in average outstanding debt balances following debt repayment and refinancing transactions that occurred in fiscal 2024 and 2025, including transactions in the second quarter of 2025 that resulted in an approximate $340 million reduction in long-term debt.

The Company's principal sources of liquidity are cash from operations, cash on hand and the asset-based credit facility described below. Material contractual obligations arising in the normal course of business primarily consist of long-term debt and related interest payments, lease obligations, merchandise purchase obligations, retirement plan benefits,benefits and self-insurance reserves. See Notes 4, 6 and 9 to the Consolidated Financial Statements included in Item 8 of this Report for amounts outstanding on FebruaryJanuary 1,31, 2025,2026, related to leases, debt,debt and retirement plans, respectively. Merchandise purchase obligations represent future merchandise payables for inventory purchased from various suppliers through contractual arrangements and are expected to be funded through cash from operations.

We believe that our available cash, together with expected future cash generated from operations, the amount available under our credit facility,facility and credit available in the market will be sufficient to satisfy our anticipated needs for working capital, capital expenditures,expenditures and cash dividends for at least the next 12 months and the foreseeable future thereafter.

The Company ended the year with a cash and cash equivalents balance of $1,306$1,246 million, ana increasedecrease from $1,034$1,306 million in 2023.2024. Also, the Company is party to the ABL Credit Facility with certain financial institutions providing for a $3,000$2,100 million Revolving ABL Facility. As of FebruaryJanuary 1,31, 2025,2026, borrowing capacity of the ABL Credit Facility was $2,856$1,957 million, which reflects a $144$143 million reduction due to standby letters of credit outstanding and borrowing availability was $2,459 million, which considers a further $397 million reduction due to inventory levels and its impact on the ABL borrowing base.outstanding.

Net cash provided by operating activities was $1,430 million in 2025 compared to $1,278 million in 2024 compared to $1,305 million in 2023.2024. The decreaseincrease was primarily driven by lower earnings after excluding the non-cash adjustments, partially offset by working capital changes.

The Company's future material contractual obligations and commitments as it relates to operating activities as of FebruaryJanuary 1,31, 20252026 are approximately $6.3$6.0 billion of operating lease obligations primarily due after 20292030 and $2.9$3.6 billion of other obligations, the majority consisting of merchandise purchase obligations due in less than one year. Note 4 and Note 14 to the Financial Statements provide additional information on operating leases and other obligations, respectively.

The Company's 20242025 capital expenditures were $882$740 million, mainly driven by digital and technology investments as well as omni-channel capabilities. The Company also opened 3212 new stores in 20242025 across nameplates and formats and continued to invest in its current stores. The net cash used by investing activities werewas offset by $283$107 million of net proceeds from the disposition of assets.

The Company expects capital expenditures to be approximately $800 million during 2025.2026. The Company's spend will be primarily focused on initiatives that will continue to support the A Bold New Chapter,Chapter strategy, including digital and technology investments, investments in our remaining go-forward locations, small format store openingslocations and omni-channel capabilities. These expenditures are expected to be financed with cash from operations and existing cash and cash equivalents. There can be no assurance that current expectations will be realized and plans are subject to change upon further review of capital expenditure needs or based on the current economic environment.

On February 22, 2022, the Company announced that its Board of Directors authorized a new $2.0 billion share repurchase program, which does not have an expiration date. During 2025, the Company repurchased 17.7 million shares of its common stock at an average cost of $14.21 per share for $251 million. During 2024, the Company did not repurchase any shares of its common stock on the open market. During 2023, the Company repurchased 1.4 million shares of its common stock at an average cost of $17.57 per share for $25 million. As of FebruaryJanuary 1,31, 2025,2026, $1.4$1.1 billion remained available under the authorization. Repurchases may be made from time to time in the open market or through privately negotiated transactions in accordance with applicable securities laws, including Rule 10b-18 under the Securities Exchange Act of 1934, on terms determined by the Company.

•The Company borrowed and repaid $301 million under the ABL Credit Facility in 2024. The Company had no outstanding borrowings under the ABL Credit Facility as of February 1, 2025.

At FebruaryJanuary 1,31, 2025,2026, no notes or debentures contained provisions requiring acceleration of payment upon a debt rating downgrade. However, the terms of approximately $2,235$2,185 million in aggregate principal amount of the Company's senior notes outstanding at that date require the Company to offer to purchase such notes at a price equal to 101% of their principal amount plus accrued and unpaid interest if there is both a change of control (as defined in the applicable indenture) of the Company and the notes are rated by specified rating agencies at a level below investment grade.

The Company's future contractual obligations and commitments as it relates to financing activities as of FebruaryJanuary 1,31, 20252026 are $2.8$2.4 billion of long-term debt obligations, including the current portion of long-term debt of $6 million, and $1.4$1.3 billion of related interest, $144$143 million of standby letters of credit and $23$19 million of finance lease obligations. Note 6 and Note 4 to the Financial Statements provide additional information on debt and finance leases, respectively.

As of FebruaryJanuary 1,31, 2025,2026, the Company's credit rating and outlook were as described in the table below:

For purposes of the following discussion, all references to "firstsecond quarter of 2026" and "firstsecond quarter of 2025" are to the Company's 13-week fiscal periods ended MayAugust 2,1, 2026 and MayAugust 3,2, 2025, respectively. References to the "first half of 2026" or "2026" and the "first half of 2025" or "2025" are to the Company's 26-week fiscal periods ended August 1, 2026 and August 2, 2025, respectively.

On February 18, 2026, the Company announced an update to its non-GAAP financial disclosures. These changes do not impact its historical or future GAAP metrics and disclosures. The updated disclosures, which encompass comparable sales, owned-plus-licensed-plus-marketplace ("OLM") dollar sales, revenues and non-GAAP earnings metrics, are intended to both simplify disclosures and provide increased clarity on the key metrics that support our growth profile and go-forward operating performance. Beginning thiswith quarter,the first quarter of 2026, adjusted earnings metrics reflect our new non-GAAP metrics.

•.StrengthenStrengthen and Reimagine the Macy's nameplate

•.AccelerateAccelerate and differentiate luxury growth

◦Bluemercury: Bluemercury achieveddelivered another quarter of comparable sales growth. Results continued to begrowth, driven by continued strength in makeup, dermatological skincare and fragrancesfragrance categories, including Byredobrands such as Skinceuticals, Victoria Beckham Beauty, La Mer and ParfumsJo deMalone. Marly,Performance asalso wellbenefited asfrom Dr.continued Diamond'ssuccess Metacineof andboth Skinceuticals. Newnew and remodeled stores continued to outperform the remainder of the locations.stores.

•.SimplifySimplify and modernize end-to-end operations

Comparable sales1sales2 highlights for the firstsecond quarter of 2026 versus the firstsecond quarter of 2025 related to components of the Bold New Chapter strategy are as follows:

•Macy's, Inc. go-forward business, inclusive of go-forward locations and digital across nameplates, total revenue wasincreased $4,7761.9% millionto $4.9 billion and comparable sales increased 3.1%.2.8%. The Company's go-forward nameplate highlights include:

•Reimagine 200 locations comparable sales, included within Macy's go-forward business comparable sales, increased 2.4%.1.9%.

Comparison of the FirstSecond Quarter of 2026 and the FirstSecond Quarter of 2025

Net sales for the firstsecond quarter of 2026 increased $83$54 million, or 1.8%,1.1%, compared to the firstsecond quarter of 2025. Excluding the $40$35 million impact of the 14 non-go-forward locations that closed at the end of fiscal 2025, net sales grew 2.7%.1.9%. The increase in net sales was driven by comparable sales growth at all three nameplates. AtMacy's Macy's, sequential improvement across all lines of business was realizedoutperformed in themany firstcategories quarter of 2026, withincluding watches, dresses, petites, dresses,career career,sportswear, kids, handbags, fragrances and shoesmen's outperformingand women's shoes. Big-ticket categories underperformed compared to the totalsecond Macy'squarter comparableof store2025 sales,but while big-ticket home, especially furniture, and plus size categories were softerimproved compared to the first quarter of 2025.2026.

The increase in otherOther revenues increased 3.2% compared to the firstsecond quarter of 20252025. was due to a $18 million increase in creditCredit card revenuesrevenue whichincreased continued to be2.0% driven by a stronghealthy credit portfolio and prudent management ofstable net credit card losses. Macy's Media Network revenues were 5.0%8.8% belowabove the firstsecond quarter of 2025, reflecting apartner shiftengagement inon timing ofour advertising spend on a year-over-year basis.platform.

Gross margin rate declinedincreased 30180 basis points in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025 duemainly todriven anby gross tariff refunds of approximately 30$95 basis point tariff impact. Excluding the tariff impact, the gross margin rate would have been approximately flat to the first quarter of 2025.million.

Selling, general and administrative ("SG&A") expenses increased $39$16 million, or 2.0%,0.8%, in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025.2025 During the first quarter of 2026, the Company continueddue to investhigher variable costs driven by sales growth as well as investments in itsBold go-forwardNew business,Chapter including Reimagine 200 locations and Bloomingdale's.initiatives. These investments were partially offset by ongoing cost containment efforts. The decrease in SG&A expenses as a percent toof total revenue in the firstsecond quarter of 2026 were flat compared to the firstsecond quarter of 2025.2025 was primarily driven by improved operating leverage from a higher total revenue base, together with disciplined expense management.

Asset sale gains in both the firstsecond quarter of 2026 and 2025 primarily reflect the monetization of store locations.

The $17$16 million of impairment, restructuring and other benefits recognized in the first quarter of 2026 primarily relate to the benefit recognized from lease modifications.The $7$22 million of impairment, restructuring and other costs recognized in the firstsecond quarter of 20252026 and the second quarter of 2025, respectively, primarily relate to store closure costs.

The decrease in net interest expense, excluding loss on extinguishment of debt,expense in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025 was primarily driven by aan decreaseincrease in interest expenseincome as a result of the debtCompany transactionsreceived that$3 weremillion executedin interest from tariff refunds in the second quarter of 2025.2026.

The incomeIncome tax expense of $30$58 million, or 32.3%25.6% of pretax income, for the firstsecond quarter of 2026 and expense of $30$28 million, or 44.1%24.3% of pretax income, for the firstsecond quarter of 2025, reflect a different effective tax rate as compared to the Company’s federal income tax statutory rate of 21%. The income tax effective rates for both the firstsecond quarter of 2026 and 2025 were impacted primarily by the impacteffect of state and local taxes and the tax impact related to the vesting and cancellation of certain stock-based compensation awards.taxes.

The Company ended the firstsecond quarter of 2026 with a cash and cash equivalents balance of $1,294 million, an increase of $362$465 million from $932$829 million at the end of the firstsecond quarter of 2025. The Company is party to anthe Amended & Extended ABL Credit Facility with certain financial institutions providing for a $2,100 million asset-based credit facility. As of MayAugust 2,1, 2026, borrowing availability was $1,958 million, which reflects a $142 million reduction due to standby letters of credit outstanding.

The net cash provided by operating activities in the current year versus cash used by operating activities in the prior year was primarily driven by $328 million cash received in the first quarter of 2026 from the settlement agreements to resolve credit card interchange fee litigation matters in which the Company was a plaintiff.

The Company's capital expenditures were $177$324 million in both 2026 andcompared to $343 million in 2025. Capital expenditures in the current year are primarily focused on digital and technology investments as well as omni-channel capabilities related to the Bold New Chapter strategy.

On MayAugust 15,28, 2026, the Company announced that its Board of Directors declared a regular quarterly dividend of 19.15 cents per share on its common stock, which will be paid on JulyOctober 1, 2026, to shareholders of record at the close of business on JuneSeptember 15, 2026. Subsequent dividends will be subject to approval of the Board of Directors, which will depend on market and other conditions.

On February 22, 2022, the Board of Directors authorized a $2,000 million share repurchase program, which does not have an expiration date. During the first quarterhalf of 2026, the Company repurchased approximately 2.64.9 million shares of its common stock at an average cost of $18.92$20.48 per share on the open market under its share repurchase program. During the first quarterhalf of 2025, the Company repurchased approximately 8.712.6 million shares of its common stock at an average cost of $11.66$11.96 per share on the open market under its share repurchase program. As of MayAugust 2,1, 2026, $1,074$1,024 million remained available under the authorization. Repurchases may be made from time to time in the open market or through privately negotiated transactions in accordance with applicable securities laws, including Rule 10b-18 under the Securities Exchange Act of 1934, on terms determined by the Company.