●  Macy's, Inc. · FY 2025 

Market Risk

Despite inherent interest rate risks stemming from general borrowing and credit card portfolio funding, a company has declared no material market risk exposure as of early 2025. This conservative stance is maintained through active mitigation strategies that utilize derivative instruments, including interest rate swaps and caps, to manage potential financial movements.

M L1 Synthesis
●  SYMBOLOGY.ONLINE l1 SYNTHESIS 

Macy's, Inc Market Risk Synthesis

Quantitative Market Risk Assessment: Macy's, Inc.

Interest Rate Sensitivity Exposure

Magnitude of Exposure and Structure

The Company is exposed to interest rate risk stemming from its general borrowing activities and the funding operations associated with its credit card portfolio. While all current borrowings are structured under fixed-rate instruments, this exposure remains inherent in the financing structure. The document notes that the Company may utilize derivative financial instruments when deemed appropriate to manage these movements.

Hedging and Mitigation Strategies

The primary mitigation strategies include:

  1. Fixed Rate Instruments: All existing borrowings are held under fixed rate agreements.
  2. Derivatives: The Company employs interest rate swap and interest rate cap agreements "from time to time" to help manage exposure and potentially reduce borrowing costs.
Assessment (Strengths and Weaknesses)
  • Strength: The Company maintains a conservative risk profile, explicitly stating it does not use financial instruments for trading or speculative purposes, nor is it involved in leveraged financial instruments. Furthermore, as of February 1, 2025, the Company determined there was "no material market risk exposure" due to its lack of outstanding market risk sensitive instruments on that date.
  • Weakness: The reliance on derivative contracts (swaps and caps) indicates an active management requirement. While these tools are used for mitigation, their effectiveness depends entirely on proper execution and ongoing monitoring.

Foreign Currency Exposure

The provided disclosure does not contain any information regarding foreign currency exposure, the currencies involved, or associated translation or transaction risks.

Commodity Price Risk

The provided disclosure does not mention any key commodities, contract structures, or the impact of commodity price fluctuations on margins.

Equity Price Risk

The provided disclosure does not detail the composition of any investment portfolio, nor does it provide information regarding mark-to-market impacts related to equity price changes.

Quantitative Measures and Stress Testing

No quantitative risk measures are disclosed in this filing excerpt. Specifically, there is no mention of Value-at-Risk (VaR) calculations, sensitivity tables, or results from stress testing scenarios.