Macy's, Inc,
Fiscal Year 2026 Q3.

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 "second quarter of 2025" and "second quarter of 2024" are to the Company's 13-week fiscal periods ended August 2, 2025 and August 3, 2024, respectively. References to the "first half of 2025" or "2025" and the "first half of 2024" or "2024" are to the Company's 26-week fiscal periods ended August 2, 2025 and August 3, 2024, 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 2024 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 2024 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".

Second Quarter of 2025Second Quarter of 2024 SG&A expenses$(1,944)$(1,973) As a percent to total revenue38.9 %38.7 % Selling, general and administrative ("SG&A") expenses decreased $29 million, or 1.5%, in the second quarter of 2025 compared to the second quarter of 2024. During the second quarter of 2025, the Company continued to invest in its go-forward business, including Reimagine 125 locations and Bloomingdale's. These investments were offset by the net impact of the benefit from closed Macy's locations and ongoing cost containment efforts. The increase in SG&A expenses as a percent to total revenue in the second quarter of 2025 was primarily due to a decline in net sales compared to the second quarter of 2024.

•.Strengthen and Reimagine the Macy's nameplate ◦Macy's delivered its strongest second quarter net promoter score on record. ◦Reimagine 125 Locations: In early February 2025, we overlaid successful initiatives from the First 50 locations to an additional 75 stores for a total 125 reimagined Macy's locations. The additional 75 stores have continued emphasis on customer experience, and build on learnings from the first year of our Bold New Chapter strategy. The Reimagine 125 locations continued to outperform the rest of the Macy's fleet in the second quarter of 2025. Customers are responding well to elevated merchandise, more effective staffing and localized events as we continue to see stronger Reimagine 125 performance in traffic, average order value and net promoter scores relative to the broader nameplate. ◦Revitalize assortment: Our assortment matrix evolution continues to gain traction. As one of our vendors' largest partners, we receive compelling product from the brands our customers are asking for, such as Coach, Donna Karan, Levi's and Ralph Lauren, all of which have thrived at Macy's. We have been attracting new partners, including abercrombie kids, expanding distribution of existing labels such as Sam Edelman, Hugo Boss and Good American, and continuing to update our private brand assortments. Our off-price concept, Backstage, and Macy's Marketplace remained strong. Backstage and Marketplace fill white space in our assortments and help us maintain loyal customers seeking more price and brand variety.

20252024 $% to Net Sales$% to Net Sales Credit card revenues, net$306 3.2 %$242 2.5 % Macy's Media Network, net74 0.8 %71 0.7 % Other revenue$380 4.0 %$313 3.2 % The increase in other revenues included a $64 million increase in credit card revenues primarily due to higher profit share, reflecting both a strong credit portfolio and continued active management of credit card losses. Macy's Media Network grew $3 million, or 4%, compared to 2024, driven by growth in advertiser spend. 22

Current Liabilities$1,450 $1,744 Noncurrent Liabilities (a)6,995 6,493 (a)Includes net amounts due to non-Guarantor subsidiaries of $2 million and $1 million as of August 2, 2025 and February 1, 2025, respectively.

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 2025 with a cash and cash equivalents balance of $932 million, an increase of $56 million from $876 million at the end of the first quarter of 2024. 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 3, 2025, borrowing availability was $1,956 million, which reflects a $144 million reduction due to standby letters of credit outstanding.

Summarized Balance Sheets May 3, 2025February 1, 2025 (in millions) ASSETS Current Assets$1,023 $1,160 Noncurrent Assets5,673 5,727 LIABILITIES Current Liabilities$1,479 $1,744

MACY'S, INC. •Company's nameplate highlights include: ◦Macy's comparable sales declined 2.9% on an owned basis and declined 2.1% on an owned-plus-licensed-plus-marketplace basis. Macy's go-forward business comparable sales, inclusive of Macy's go-forward locations and digital, declined 2.7% on an owned basis and declined 1.9% on an owned-plus-licensed-plus-marketplace basis. •Reimagine 125 locations comparable sales, included within Macy's go-forward business comparable sales, declined 1.3% on an owned basis and declined 0.8% on an owned-plus-licensed basis.

Quarterly Overview and Company Strategy The Company is in its second year of the execution of its strategy, A Bold New Chapter, which firmly places energy and focus 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 closing underproductive Macy's stores to focus resources and investments on its go-forward enterprise. During the second quarter of 2025, the Company continued to make progress on the three pillars within the Bold New Chapter strategy, as follows:

MACY'S, INC. Second Quarter of 2025Second Quarter of 2024 $% to Net Sales$% to Net Sales Credit card revenues, net$153 3.2 %$125 2.5 % Macy's Media Network, net34 0.7 %34 0.7 %

Second Quarter of 2025Second Quarter of 2024 Effective tax rate24.3 %23.1 % Federal income statutory rate21 %21 % The income tax expense of $28 million, or 24.3% of pretax income, for the second quarter of 2025 and $45 million, or 23.1% of pretax income, for the second quarter of 2024, 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 the second quarter of 2025 and the second quarter of 2024 were impacted primarily by the effect of state and local taxes. 21

Decrease in comparable sales on an owned basis(0.6)%(2.6)% Supplemental Non-GAAP Financial Measures Increase (decrease) in comparable sales on an O+L+M basis0.3 %(1.8)%

20252024 Net cash provided by operating activities$255 $137 Net cash used by investing activities(262)(373) Net cash used by financing activities(471)(152)

Investing Activities The Company's capital expenditures were $343 million in 2025 compared to $432 million in 2024. Capital expenditures in the current year are primarily focused on digital and technology investments as well as omni-channel capabilities.

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 half of 2025, the Company repurchased approximately 12.6 million shares of its common stock at an average cost of $11.96 per share on the open market under its share repurchase program. The Company did not repurchase any shares of its common stock during the first half of 2024. As of August 2, 2025, $1,224 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.

Guarantor Summarized Financial Information The Company had $1,941 million aggregate principal amount of senior unsecured notes and senior unsecured debentures (collectively the "Unsecured Notes") outstanding as of both August 2, 2025 and February 1, 2025 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 $10,166 million and $9,905 million as of August 2, 2025 and February 1, 2025, respectively, have been excluded from the Summarized Balance Sheets. Equity in earnings of non-Guarantor subsidiaries of $402 million and $761 million for the 13 and 26 weeks ended August 2, 2025 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 Statement of Operations 13 Weeks Ended August 2, 202526 Weeks Ended August 2, 2025 (in millions) Net sales$201 $372 Consignment commission income (a)752 1,453

13 Weeks Ended August 2, 2025 Macy's, Inc.Macy's Increase in comparable sales on an owned basis (Note 1)0.8%0.4% Impact of departments licensed to third parties and marketplace sales (Note 2)1.1%0.8%

Impact of departments licensed to third parties and marketplace sales (Note 2)0.7%0.8% Decrease in comparable sales on an O+L+M basis(3.3%)(1.8%) Notes: (1)Represents the period-to-period percentage change in net sales from stores in operation for one full fiscal year for the 13 and 26 weeks ended August 2, 2025 and August 3, 2024. Such calculation includes all digital sales and excludes commissions from departments licensed to third parties and marketplace. Stores impacted by a natural disaster or undergoing significant expansion or shrinkage remain in the comparable sales calculation unless the store, or material portion of the store, is closed for a significant period of time. Definitions and calculations of comparable sales may differ among companies in the retail industry. (2)Represents the impact of including the sales of departments licensed to third parties occurring in stores in operation throughout the year presented and the immediately preceding year and all online sales, including marketplace sales, in the calculation of comparable sales. Macy's and Bloomingdale's license third parties to operate certain departments in their stores and online, including Macy's and Bloomingdale's digital Marketplace, and receive commissions from these third parties based on a percentage of their net sales, while Bluemercury does not participate in licensed or marketplace businesses. In its financial statements prepared in conformity with GAAP, the Company includes these commissions (rather than sales of the departments licensed to third parties and marketplace) in its net sales. The Company does not, however, include any amounts in respect of licensed department or marketplace sales (or any commissions earned on such sales) in its comparable sales in accordance with GAAP (i.e., on an owned basis). The amounts of commissions earned on sales of departments licensed to third parties and from the digital marketplace are not material to its net sales for the periods presented. 27

13 Weeks Ended August 2, 202513 Weeks Ended August 3, 2024 Net Income DilutedEarningsPer ShareNet IncomeDilutedEarningsPer Share (millions, except per share figures)

◦Bloomingdale's comparable sales increased 3.6% on an owned basis and increased 5.7% on an owned-plus-licensed-plus-marketplace basis. ◦Bluemercury comparable sales increased 1.2% on an owned basis. 19

Supply Chain and Third-Party Risks We depend on vendors and other sources of merchandise, goods and services outside the U.S. Our business has been and could in the future continue to be affected by disruptions in, or other legal, regulatory, political, economic or public health issues associated with, our supply network. We depend on vendors for timely and efficient access to products we sell. We source the majority of our merchandise from manufacturers located outside the U.S., primarily Asia. In the normal course of business, we provide credit enhancement to our vendors to support accounts receivable factoring and financing with third parties. Current economic conditions may adversely impact our vendors and they may be unable to access financing or become insolvent and unable to supply us with products, or we may be required to increase cash collateral levels or provide guarantees to support our vendors' financing arrangements. Any major changes in tax policy, such as the disallowance of tax deductions for imported merchandise could have a material adverse effect on our business, results of operations and liquidity. We have experienced delays in merchandise inventory receipts and product delivery due to a shortage of vessels and air freight, port congestion, worker shortage impacting shipping and ports, truck driver shortages, rail congestion at major freight hubs and increased demand for consumer goods. Although these delays have not materially impacted our operations to date, they could potentially have a material adverse impact on future product availability, product mix and sales if the delays escalate. We have also experienced increases in shipping rates from Trans-Pacific ocean carriers due to increases in spot market rates and shortage of shipping capacity from China and other parts of Asia and increases in trucking costs due to truck driver shortages and fuel costs. The procurement of all our goods and services is subject to the effects of price increases, which we may or may not be able to pass through to our customers. Our procurement of goods and services from outside the U.S. is subject to risks associated with political or financial instability, trade restrictions, tariffs, currency exchange rates, transport capacity and costs, health pandemics, armed conflicts and other factors relating to foreign trade. All of these factors may affect our ability to access suitable merchandise on acceptable terms, are beyond our control and could negatively affect our business and results of operations. We source certain of our private label products from factories in China, Vietnam, India, Indonesia, Cambodia and other countries. Since 2017, the U.S. and China have been engaged in a trade dispute that has involved a number of actions against China including the imposition of tariffs on Chinese imports; sanctions on Chinese military-industrial complex companies; stricter reviews of direct investments in the U.S. by Chinese companies; and detention by U.S. Customs of products made in Xinjiang involving alleged human rights violations, which have or may prompt countersanctions or other retaliatory actions from the Chinese government. In addition, differing policies on China-Taiwan and the Russia-Ukraine war have further strained relations between the countries. These geopolitical, trade and investment tensions have created additional uncertainty and increased risk in doing business in China, including potential supply disruptions and higher costs of our products sourced or imported from China. Beginning in February 2025, the Trump Administration has imposed tariffs on products imported from more than 90 countries including Canada, Mexico, China and other United States trading partners. Strategic price increases are expected across our product categories as a result of these tariffs imposed on countries from which we source. While we have included assumptions on gross margin impact and other assumptions in our earnings guidance that we believe are reasonable, the amount and timing of any price increases and the extent to which the increases will be absorbed by or shared with vendors or can be passed on to consumers is not fully known. In addition, volatility in tariff rates and trade policy is creating uncertainty among businesses and consumers that to a certain extent has already and may continue to negatively impact demand for consumer discretionary products and contribute to a heightened competitive promotional landscape. Increased prices and reduced demand for the products we sell could have a material adverse impact on our business, results of operations and profitability. We continue to evaluate the impact of currently effective tariffs, including 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