Macy’s CFO says his finance team will help “shape” results in 2023, not just report results

“The finance team will not be reporting the news,” said Adrian V. Mitchell, CFO of Macy’s Inc. “The finance team will help shape the results with our partners across the business. That mentality change was pretty critical.”

As we head into 2023, I caught up with Mitchell on the progress of Macy’s transformation into a digitally-led company. He says finance is at the heart of a collaborative effort by the department to modernize the retailer, which has been in business for more than 150 years.

“A lot of the effort in modern department stores is to retool Macy’s by building new skills, discarding old skills, and making them visible to the customer,” he says.

By streamlining its supply chain, Macy’s improved inventory turns by 15% compared to before the pandemic, the company reported in its Q3 results. A big part of supply chain and inventory management has to do with analytical skills using tools like machine learning and demand forecasting, Mitchell says.

With a strong focus on the supply chain in 2021, “we were able to source the vast majority of our stock in time for the holidays, and very little [of 2021 goods] actually spilled over into 2022,” he says. “In 2022 we have seen a loosening of the supply chain. Execution rates continue to improve every month and every quarter this year. So we have adjusted and are monitoring confirmed orders.”

He continues: “So if you think about the 2022 holidays, we had 55% new arrivals, that’s 30 percentage points more than 2019. We’re going into the season as a fashion retailer with a lot of new arrivals and we can actually adapt depending on the needs profile in the Season.”

Location-level pricing is one area where Macy’s uses machine learning, Mitchell says. For example, you can check the speed of a specific item, like a black polo shirt, its stock availability in specific locations, and its availability for the digital store,” he explains on a case-by-case basis. This is different than in the past when you look at the sell-through rate and then make decisions about discounts that would apply to every store in a particular region, he says.

“Pricing analytics continues to pay off for us,” says Mitchell.

Mitchell has replaced manual processes with technology that includes enterprise reporting. “That’s a truth to how the entire leadership team and their management teams talk about performance,” he says. “We’re talking inventory, sales, margin, lending business, marketplace business, all on one sheet of data and information.”

Macy’s reported third-quarter net sales were $5.2 billion, down 3.9% from the same period last year. However, the retailer beat the estimates. “We’re pleased to be at the high end of our sales expectations,” said Mitchell. “We were able to significantly exceed the end result compared to expectations.”

“By mid-October, our stores were ready for the holidays,” he says. “This year, we think the holiday pattern is very much a pre-pandemic pattern.” Demand is on Black Friday, Cyber ​​Monday, Cyber ​​Week and the 10 to 12 days leading up to Christmas, he says.

“The consumer remains under pressure,” says Mitchell. “We recognize that things are more expensive in dollars on the non-discretionary side. So we have to continue to delight the customer.” The company will be able to share more data in January, he says.

Getting a 360-degree view of the company is critical to Mitchell’s finance team, and it doesn’t just happen from your desk. “My finance leaders and their teams will do it now [distribution centers]they go to the stores, they sit in business meetings with business partners to understand what levers we need to pull to drive financial results,” he explains.

See you tomorrow.

Sheryl Estrada
[email protected]

Big thing

Accenture’s new Payments Gets Personal report examines the transactional journey of consumers and offers insights into future payment innovations. Globally, 66% of consumers surveyed use cash to pay at least five times a month. By region, North America had the lowest percentage of consumers (59%) who use cash frequently. The debit card was the second most used form of payment worldwide (64%). And more than half (56%) of respondents use a digital wallet. Biometric payments are the authentication of physical features such as retinas, fingerprints and faces. Forty-two percent of respondents believe that biometrics will likely be widespread by 2025. Additionally, 9 percent said they would be willing to use it as their primary personal payment method by 2025, if available. The results are based on a survey of more than 16,000 consumers in 13 countries in Asia, Europe, Latin America and North America.

go deeper

Amazon Web Services (AWS), Amazon’s cloud-computing services, the company’s “highest-performing and least-recognized business, is cutting few, if any, jobs” and could even hire new employees over the next year, writes Wealth’s Geoff Colvin. For his article, “The CEO of Amazon Web Services likes to hire people who are ‘restless and unhappy.’ Here’s why.” Colvin sat down with Adam Selipsky to talk about the culture of AWS and how he selects team members.

leaderboard

Christina Zamarro was promoted to EVP and CFO at The Goodyear Tire & Rubber Company (Nasdaq: GT), effective January 1. Zamarro will succeed Darren R. Wells, who will become EVP and Chief Administrative Officer. Zamarro joined Goodyear in 2007 after several years with Ford Motor Company. She is currently Vice President of Finance and Treasurer at Goodyear. For more than 15 years with the company, Zamarro has played key roles in financial strategy, treasury and investor relations.

James M Moses has been appointed Vice Chairman and CFO of First Hawaiian Bank and its parent First Hawaiian, Inc. (Nasdaq: FHB), effective January 3. Moses has over 20 years of banking experience. He joins the company from First Bank in St. Louis, Missouri, where he served as EVP and CFO. His previous experience includes serving as EVP and CFO of Berkshire Hills Bancorp and as SVP and Manager of Asset Liability Management at Webster Bank.

overheard

“We still have a long way to go.”

– Federal Reserve Chair Jerome Powell told a news conference on Wednesday that officials were not close to ending their campaign of interest rate hikes to curb inflation. Powell’s statement followed the central bank’s announcement of a 0.50 percentage point hike in interest rates, down from the four previous 0.75 percentage point hikes. Officials also signaled that borrowing costs would be higher than expected next year, wealth reported.