Table of Contents

MACY'S, INC.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

For purposes of the following discussion, all references to "first quarter of 2026" and "first quarter of 2025" are to the Company's 13-week fiscal periods ended May 2, 2026 and May 3, 2025, respectively.

The following discussion should be read in conjunction with the Consolidated Financial Statements and the related notes included elsewhere in this report, as well as the financial and other information included in the 2025 10-K. The following discussion 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 in "Forward-Looking Statements") and in the 2025 10-K (particularly in "Risk Factors" and in "Forward-Looking Statements"). This discussion includes Non-GAAP financial measures. For information about these measures, see the disclosure under the caption "Important Information Regarding Non-GAAP Financial Measures".

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 this quarter, adjusted earnings metrics reflect our new non-GAAP metrics.

Quarterly Overview and Company Strategy

The Company is in its third year of the execution of its Bold New Chapter strategy, which firmly places energy and focus on the needs of our customers 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 closing underproductive Macy's stores to focus resources and investments on its go-forward enterprise. During the first quarter of 2026, the Company delivered enterprise-wide growth, better-than expected performance across all key metrics, and our highest comparable sales in four years with all nameplates and channels positive. The Company's results reflect the progress it is making on each pillar of the Bold New Chapter strategy, with key highlights as follows:

•.Strengthen and Reimagine the Macy's nameplate

◦Reimagine 200 Locations: In the first quarter of 2026, we expanded learnings to an additional 75 locations for a total of 200 reimagined Macy's locations. The investments in the additional 75 stores have continued emphasis on customer experience, and build on learnings from the first two years of our Bold New Chapter strategy. The Reimagine 200 locations continued to outperform the rest of the Macy's fleet in the first quarter of 2026. We believe these locations are now better organized, easier to shop and have a more compelling visual presentation. Within each category we are driving higher interest and engagement through increased differentiation. We are carving out floor space to leverage new trends while maintaining a presence in existing categories and brands.

◦Revitalize assortment: Our assortment matrix evolution continues to gain traction as we elevate our product curation to deliver a more compelling mix of newness and fashion. Our merchants continue to be focused on clarity of offering, enhanced variety and reduced redundancies. During the first quarter of 2026, we introduced Rothy's, Donna Karan Weekend and Ted Baker Men's. In addition, we expanded Abercrombie kids offerings to infants and toddlers, and further expanded store distribution of Reiss, Free People, Theory and Rodd & Gunn.

◦Customer Experience: Macy's delivered its highest first quarter net promoter score on record. During the quarter, we introduced Ask Macy's, our new AI-powered conversational shopping assistant shaped by data and insights from thousands of colleagues. It serves as a starting point for discovery across channels and initial results indicate that customers engaging with Ask Macy's have higher conversion rates.

•.Accelerate luxury growth

◦Bloomingdale's: Bloomingdale's achieved its highest first quarter sales in its 154-year history. From a category perspective, ready-to-wear, men's apparel, fine jewelry, shoes and tabletop were standout contributors to this performance. Bloomingdale's provides its customers with a compelling and distinct experience through matrix elevation, new brand additions, and a vibrant shopping experience, including collaborations, activations and personalized customer service. In the first quarter of 2026, we introduced a number of designer brands , including Chloe ready-to-wear, Isabel Marant, Phoebe Philo, Parke Denim, Heirlome and Khaite Shoes. We also expanded the reach of our Very Important Client program, which cater to our highest spenders, and hosted our newest campaign, California Love, which featured California inspired events, animation and brand exclusives.

◦Bluemercury: Bluemercury achieved another quarter of comparable sales growth. Results continued to be driven by makeup, dermatological skincare and fragrances including Byredo and Parfums de Marly, as well as Dr. Diamond's Metacine and Skinceuticals. New and remodeled stores continued to outperform the remainder of the locations.

MACY'S, INC.

•.Simplify and modernize end-to-end operations

◦The scope of the pillar has expanded this year to incorporate optimizing and scaling enterprise-wide organizational excellence, which we believe more accurately reflects the Company's organizational model and innovation capabilities. This pillar supports revenue growth and customer experience enhancements to drive efficiencies. The Company has been testing, refining and implementing initiatives, including Artificial Intelligence ("AI"), and we believe there are meaningful opportunities to better serve our customers and support our colleagues.

Comparable sales1 highlights for the first quarter of 2026 versus the first quarter of 2025 related to components of the Bold New Chapter strategy are as follows:

•Macy's, Inc. comparable sales increased 3.0%.

•Macy's, Inc. go-forward business, inclusive of go-forward locations and digital across nameplates, total revenue was $4,776 million and comparable sales increased 3.1%. The Company's nameplate highlights include:

◦Macy's comparable sales increased 1.6%.

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

◦Bloomingdale's comparable sales increased 10.2%.

◦Bluemercury comparable sales increased 6.4%.

1 Comparable sales refers to owned-plus-licensed-plus-marketplace sales. All reported nameplate comparable sales results are on a go-forward basis.

17

MACY'S, INC.

Results of Operations

Comparison of the First Quarter of 2026 and the First Quarter of 2025

First Quarter of 2026First Quarter of 2025

Amount% to Net Sales% to Total RevenueAmount% to Net Sales% to Total Revenue

(dollars in millions, except per share figures)

Net sales$4,682 $4,599

Other revenue210 4.5 %194 4.2 %

Total revenue4,892 4,793

Cost of sales(2,860)(61.1)%(2,795)(60.8)%

Selling, general and administrative expenses(1,952)(39.9)%(1,913)(39.9)%

Gains on sale of real estate15 0.3 %16 0.3 %

Impairment, restructuring and other benefits (costs)17 0.3 %(7)(0.1)%

Operating income$112 2.3 %$94 2.0 %

Net income$63 $38

Diluted earnings per share$0.23 $0.13

Supplemental Financial Measures

Gross margin

$1,822 38.9 %$1,804 39.2 %

Digital sales as a percentage of net sales34 %33 %

Supplemental Non-GAAP Financial Measures

Adjusted net income$35 $31

Adjusted diluted earnings per share$0.13 $0.11

Adjusted EBIT$80 $85

Adjusted EBITDA$290 $304

See pages 22 to 23 for reconciliations of the supplemental non-GAAP financial measures to their most comparable GAAP financial measure and for other important information.

First Quarter of 2026First Quarter of 2025

Net sales$4,682 $4,599

Change in comparable sales3.0 %(1.2)%

Digital sales as a percent of net sales34 %33 %

Net sales for the first quarter of 2026 increased $83 million, or 1.8%, compared to the first quarter of 2025. Excluding the $40 million impact of the 14 non-go-forward locations that closed at the end of fiscal 2025, net sales grew 2.7%. The increase in net sales was driven by sales growth at all three nameplates. At Macy's, sequential improvement across all lines of business was realized in the first quarter of 2026, with watches, petites, dresses, career, kids, handbags, fragrances and shoes outperforming the total Macy's comparable store sales, while big-ticket home, especially furniture, and plus size categories were softer compared to the first quarter of 2025.

18

MACY'S, INC.

First Quarter of 2026First Quarter of 2025

$% to Net Sales$% to Net Sales

Credit card revenues, net$172 3.7 %$154 3.3 %

Macy's Media Network, net38 0.8 %40 0.9 %

Other revenue$210 4.5 %$194 4.2 %

The increase in other revenues compared to the first quarter of 2025 was due to a $18 million increase in credit card revenues which continued to be driven by a strong credit portfolio and prudent management of net credit losses. Macy's Media Network revenues were 5.0% below the first quarter of 2025, reflecting a shift in timing of advertising spend on a year-over-year basis.

First Quarter of 2026First Quarter of 2025

$% to Net Sales$% to Net Sales

Cost of sales$(2,860)61.1 %$(2,795)60.8 %

Gross margin$1,822 38.9 %$1,804 39.2 %

Gross margin rate declined 30 basis points in the first quarter of 2026 compared to the first quarter of 2025 due to an approximately 30 basis point tariff impact. Excluding the tariff impact, the gross margin rate would have been approximately flat to the first quarter of 2025.

First Quarter of 2026First Quarter of 2025

SG&A expenses$(1,952)$(1,913)

As a percent to total revenue39.9 %39.9 %

Selling, general and administrative ("SG&A") expenses increased $39 million, or 2.0%, in the first quarter of 2026 compared to the first quarter of 2025. During the first quarter of 2026, the Company continued to invest in its go-forward business, including Reimagine 200 locations and Bloomingdale's. These investments were partially offset by ongoing cost containment efforts. SG&A expenses as a percent to total revenue in the first quarter of 2026 were flat compared to the first quarter of 2025.

First Quarter of 2026First Quarter of 2025

Gains on sale of real estate$15 $16

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

First Quarter of 2026First Quarter of 2025

Impairment, restructuring and other benefits (costs)$17 $(7)

The $17 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 million of impairment, restructuring and other costs recognized in the first quarter of 2025 primarily relate to store closure costs.

First Quarter of 2026First Quarter of 2025

Net interest expense$(25)$(27)

The decrease in net interest expense, excluding loss on extinguishment of debt, in the first quarter of 2026 compared to the first quarter of 2025 was primarily driven by a decrease in interest expense as a result of the debt transactions that were executed in the second quarter of 2025.

19

MACY'S, INC.

First Quarter of 2026First Quarter of 2025

Effective tax rate32.3 %44.1 %

Federal income statutory rate21 %21 %

The income tax expense of $30 million, or 32.3% of pretax income, for the first quarter of 2026 and expense of $30 million, or 44.1% of pretax income, for the first 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 first quarter of 2026 and 2025 were impacted primarily by the impact of state and local taxes and the tax impact related to the vesting and cancellation of certain stock-based compensation awards.

Liquidity and Capital Resources

The Company's principal sources of liquidity are cash from operations, cash on hand and the Amended & Extended ABL Credit Facility. 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 and self-insurance reserves. 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.

The Company believes that, assuming no change in its current business plan, its available cash, together with expected future cash generated from operations, the amount available under the Amended & Extended ABL Credit Facility and credit available in the market, will be sufficient to satisfy its anticipated needs for working capital, capital expenditures and cash dividends for at least the next twelve months and the foreseeable future thereafter.

Capital Allocation

The Company's capital allocation goals include maintaining a healthy balance sheet and investment-grade credit metrics to be best-positioned for access to bank and capital market funding under all economic scenarios, followed by investing in the business through initiatives to drive long-term profitable growth and returning capital to shareholders through dividends and share repurchases.

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

20262025

Net cash provided (used) by operating activities$292 $(64)

Net cash used by investing activities(149)(133)

Net cash used by financing activities(95)(178)

Operating Activities

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 from the settlement agreements to resolve credit card interchange fee litigation matters in which the Company was a plaintiff.

Investing Activities

The Company's capital expenditures were $177 million in both 2026 and 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.

Financing Activities

Dividends

The Company paid dividends totaling $50 million and $51 million in 2026 and 2025, respectively.

On May 15, 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 July 1, 2026, to shareholders of record at the close of business on June 15, 2026. Subsequent dividends will be subject to approval of the Board of Directors, which will depend on market and other conditions.

20

MACY'S, INC.

Stock Repurchases

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 quarter of 2026, the Company repurchased approximately 2.6 million shares of its common stock at an average cost of $18.92 per share on the open market under its share repurchase program. During the first quarter of 2025, the Company repurchased approximately 8.7 million shares of its common stock at an average cost of $11.66 per share on the open market under its share repurchase program. As of May 2, 2026, $1,074 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.

Contractual Obligations

As of May 2, 2026, there were no material changes to the Company's contractual obligations and commitments outside the ordinary course of business since January 31, 2026, as reported in the Company's 2025 Form 10-K.

Guarantor Summarized Financial Information

The Company had $2,441 million aggregate principal amount of senior unsecured notes and senior unsecured debentures (collectively the "Unsecured Notes") outstanding as of both May 2, 2026 and January 31, 2026 with maturities ranging from 2027 to 2043. The Unsecured Notes constitute debt obligations of Macy's Retail Holdings, LLC ("MRH" or "Subsidiary Issuer"), a 100%-owned subsidiary of Macy's, Inc. ("Parent" and together with the "Subsidiary Issuer," the "Obligor Group"), and are fully and unconditionally guaranteed on a senior unsecured basis by Parent. The Unsecured Notes rank equally in right of payment with all of the Company's existing and future senior unsecured obligations, senior to any of the Company's future subordinated indebtedness and are structurally subordinated to all existing and future obligations of each of the Company's subsidiaries that do not guarantee the Unsecured Notes. Holders of the Company's secured indebtedness, including any borrowings under the ABL Credit Facility, will have a priority claim on the assets that secure such secured indebtedness; therefore, the Unsecured Notes and the related guarantees are effectively subordinated to all of the Subsidiary Issuer's and Parent and their subsidiaries' existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness.

The following tables include combined financial information of the Obligor Group. Investments in subsidiaries of $7,094 million and $7,016 million as of May 2, 2026 and January 31, 2026, respectively, have been excluded from the Summarized Balance Sheets. Equity in earnings of non-Guarantor subsidiaries of $357 million for the 13 weeks ended May 2, 2026 have been excluded from the Summarized Statement of Operations. The combined financial information of the Obligor Group is presented on a combined basis with intercompany balances and transactions within the Obligor Group eliminated.

Summarized Balance Sheets

May 2, 2026January 31, 2026

(in millions)

ASSETS

Current Assets$960 $1,033

Noncurrent Assets6,236 5,357

LIABILITIES

Current Liabilities$1,648 $1,741

Noncurrent Liabilities (a)7,843 6,800

(a)Includes net amounts due to non-Guarantor subsidiaries of $3 million and $2 million as of May 2, 2026 and January 31, 2026, respectively.

21

MACY'S, INC.

Summarized Statement of Operations

13 Weeks Ended May 2, 2026

(in millions)

Net sales$177

Consignment commission income (a)695

Other revenue33

Cost of sales(86)

Operating loss(335)

Loss before income taxes (b)(110)

Net loss(14)

(a)Income pertains to transactions with ABL Borrower, a non-Guarantor subsidiary.

(b)Includes $279 million of dividend income from non-Guarantor subsidiaries for the 13 weeks ended May 2, 2026.

Important Information Regarding Non-GAAP Financial Measures

The Company reports its financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). However, management believes that certain non-GAAP financial measures provide users of the Company's financial information with additional useful information in evaluating operating performance. Management believes that providing earnings before interest and taxes ("EBIT") and earnings before interest, taxes, depreciation and amortization ("EBITDA"), which are non-GAAP financial measures, provides meaningful information about its operational efficiency by excluding the impact of changes in tax law and structure, debt levels and capital investment. In addition, management believes that excluding certain items from EBIT, EBITDA, net income and diluted earnings per share that are not associated with the company's core operations and that may vary substantially in frequency and magnitude from period-to-period provides useful supplemental measures that assist in evaluating the company's ability to generate earnings and to more readily compare these metrics between past and future periods. Management also believes that Adjusted EBIT and Adjusted EBITDA are frequently used by investors and securities analysts in their evaluations of companies, and that such supplemental measures facilitate comparisons between companies that have different capital and financing structures and/or tax rates. The Company uses certain non-GAAP financial measures as performance measures for components of executive compensation.

Non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, the Company's financial results prepared in accordance with GAAP. Certain of the items that may be excluded or included in non-GAAP financial measures may be significant items that could impact the Company's financial position, results of operations or cash flows and should therefore be considered in assessing the Company's actual and future financial condition and performance. The methods used by the Company to calculate its non-GAAP financial measures may differ significantly from methods used by other companies to compute similar measures. As a result, any non-GAAP financial measures presented herein may not be comparable to similar measures provided by other companies.

22

MACY'S, INC.

Adjusted EBIT and Adjusted EBITDA

The following is a tabular reconciliation of the non-GAAP financial measures adjusted EBIT and adjusted EBITDA to GAAP net income, which the Company believes to be the most directly comparable GAAP measure.

13 Weeks Ended May 2, 202613 Weeks Ended May 3, 2025

(millions)

Net income$63 $38

Federal, state and local income tax expense30 30

Interest expense, net25 27

Loss on extinguishment of debt- 3

Benefit plan income, net(6)(4)

Impairment, restructuring and other (benefits) costs(17)7

Gains on sale of real estate(15)(16)

Adjusted EBIT$80 $85

Depreciation and amortization210 219

Adjusted EBITDA$290 $304

Adjusted Net Income and Adjusted Diluted Earnings Per Share

The following is a tabular reconciliation of the non-GAAP financial measures adjusted net income to GAAP net income and adjusted diluted earnings per share to GAAP diluted earnings per share, which the Company believes to be the most directly comparable GAAP measures.

13 Weeks Ended May 2, 202613 Weeks Ended May 3, 2025

Net Income DilutedEarningsPer ShareNet IncomeDilutedEarningsPer Share

(millions, except per share figures)

As reported$63 $0.23 $38 $0.13

Loss on extinguishment of debt- - 3 0.01

Benefit plan income, net(6)(0.02)(4)(0.01)

Impairment, restructuring and other (benefits) costs(17)(0.06)7 0.03

Gains on sale of real estate(15)(0.05)(16)(0.06)

Income tax impact of items noted above10 0.03 3 0.01

As adjusted to exclude items above$35 $0.13 $31 $0.11