Macy's, Inc.
For the period ended Aug 1, 2026. Filed Sep 10, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Aug 1, 2026 · Filed Sep 10, 2026
M$23.08-4.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-05-02; filed 2026-06-04.
0001628280-26-040820
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-08-01; filed 2026-09-10.
0001628280-26-061320
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 67 previous paragraphs and 94 current paragraphs.
30 unchanged; 24 reworded; 36 added; 13 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 14 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (36)
Current report
In the second quarter of 2026, the Company delivered comparable sales growth across all nameplates and channels, revenue growth, and better-than-expected performance on all key financial metrics, reflecting progress on each pillar of the strategy. Highlights include:
Current report
•. Reimagine 200 Locations:
Current report
The Reimagine locations represent approximately 60% of the Macy's go-forward store fleet and approximately 75% of Macy's go-forward sales. The second quarter of 2026 marked the fifth consecutive quarter of growth for these locations, with positive comparable sales in nine of the last ten quarters. Reimagine locations also consistently generate higher Net Promoter Scores ("NPS"), contributing to continued improvement in NPS for the entire Macy's fleet. Performance reflects targeted investments in staffing, events and localized merchandising, and we plan to continue expanding these initiatives.
Current report
•. Revitalize Assortment:
Current report
We continued to enhance our merchandise offering through disciplined brand curation, including the addition of brands such as Kiko Milano and Happy Camp3r's junior apparel line, and expanded distribution of brands including Reiss, Rodd & Gunn and BOSS.
Current report
•. Customer Experience:
Current report
Following the launch of Ask Macy's, our artificial intelligence ("AI") powered conversational shopping assistant, we are expanding the tool to support in-store colleagues and enhance customer engagement across channels. We also continued to strengthen customer connections through Macy's Year of Celebrations campaign, including hosting the largest Macy's 4th of July Fireworks event in the brand's history.
Current report
Accelerate and differentiate luxury growth
Current report
•. Bloomingdale's:
Current report
Bloomingdale's achieved the highest second-quarter sales in its 154-year history, driven by growth across channels, markets and merchandise categories. During the second quarter of 2026, Bloomingdale's expanded its luxury assortment through the introduction of brands such as Ulla Johnson, Proenza Schouler and Dries Van Noten, while broadening distribution of brands including James Perse, Chanel Fine Jewelry and Watches, Christian Louboutin and Prada shoes. We also expanded Bloomingdale's Very Important Client program and launched a Bloomingdale's AI-powered conversational shopping assistant for digital customers, designed to enhance how customers engage with the brand and discover products.
Current report
•. Bluemercury:
Current report
Bluemercury delivered another quarter of comparable sales growth, driven by continued strength in makeup, dermatological skincare and fragrance categories, including brands such as Skinceuticals, Victoria Beckham Beauty, La Mer and Jo Malone. Performance also benefited from continued success of both new and remodeled stores.
Current report
•. The Company expanded this pillar to encompass enterprise-wide organizational excellence, harnessing the reach and capabilities of Macy's, Inc. to support revenue growth, enhance the customer experience, and effectively execute its strategy. The Company is advancing AI and automation across the customer journey, inventory management and localization, while keeping human connection central to its customers and colleagues. As part of its ongoing efforts to improve supply chain efficiency and enhance service levels, the Company continued to advance initiatives focused on order processing and fulfillment productivity. Compared to thesecond quarter of 2025, the Company increased its units processed per hour by 7.0%1 and reduced the average number of days between order placement and shipment by 6.7%.
Current report
◦Macy's comparable sales increased 1.1%.
Current report
◦Bloomingdale'scomparable sales increased 11.3%.
Current report
◦Bluemercury comparable sales increased 6.2%.
Current report
Tariff Refunds and Investments
Current report
Macy’s, Inc. has received all expected International Emergency Economic Powers Act (“IEEPA”) tariff refunds including $98 million in the second quarter of 2026 and $18 million following the quarter end, for a total of $116 million 3. The company is taking a balanced approach to deploying benefits.
Current report
1 Specific to direct-to-consumer and store replenishment network and excludes furniture bedding and reverse logistics.
Current report
3 Inclusive of a $95 million gross margin benefit and $3 million interest benefit in the second quarter of 2026, and a $17 million gross margin benefit and $1 million interest benefit in the third quarter of 2026.
Current report
Comparison of the Second Quarter of 2026 and the Second Quarter of 2025
Current report
Other revenues increased 3.2% compared to the second quarter of 2025. Credit card revenue increased 2.0% driven by a healthy credit portfolio and stable net credit card losses. Macy's Media Network revenues were 8.8% above the second quarter of 2025, reflecting partner engagement on our advertising platform.
Current report
Gross margin rate increased 180 basis points in the second quarter of 2026 compared to the second quarter of 2025 mainly driven by gross tariff refunds of approximately $95 million.
Current report
Comparison of the 26 Weeks Ended August 1, 2026 and August 2, 2025
Current report
Net sales for 2026 increased $137 million, or 1.5%, compared to 2025. Excluding the $75 million impact of the 14 non-go-forward locations closed at the end of fiscal 2025, net sales grew 2.3%. The increase in net sales was driven by comparable sales growth at all three nameplates. Macy's outperformed in many categories including watches, dresses, petites, career sportswear, kids, handbags, fragrances and men's and women's shoes. Big ticket and plus size categories underperformed compared to 2025.
Current report
Gross margin rate increased 70 basis points in 2026 compared to 2025. The increase in gross margin was primarily driven by the benefit of approximately $95 million received in gross tariff refunds in the second quarter of 2026.
Current report
SG&A expenses increased $55 million, or 1.4%, in 2026 compared to 2025 due to higher variable costs driven by sales growth as well as continuing investments in Bold New Chapter initiatives. Thedecrease in SG&A expenses as a percent of total revenue in 2026 compared to 2025 was primarily driven by improved operating leverage from a higher total revenue base, together with disciplined expense management.
Current report
The decrease in net interest expense, excluding loss on extinguishment of debt, in 2026 compared to 2025 wasprimarily driven by an increase in interest income as the Company received $3 million in interest from tariff refunds in the second quarter of 2026.
Current report
Debt Transactions
Current report
The Company completed the following debt transactions in the first half of 2025:
Current report
•On July 29, 2025, the Company completed three debt transactions which resulted in the recognition of $13 million of losses related to the extinguishment of debt on the Consolidated Statements of Income:
Current report
◦Issuance by MRH of $500 million aggregate principal amount of 7.375%% senior unsecured notes due August 1, 2033 in a private offering. The Company used the net proceeds from the notes offering, together with cash on hand, to fund the tender offer and redemption described below,
Current report
◦Redemption of $393 million aggregate principal amount of senior notes and debentures due in 2028 and 2029 and issuance of an irrevocable notice of redemption to redeem $194 million aggregate principal amount of senior debentures due in 2028 and 2029, which debentures were redeemed after the end of the second quarter of 2025, and
Current report
◦Completion of a tender offer in which $251 million aggregate principal amount of senior notes and debentures were tendered for early settlement and purchased by MRH for a total cash cost of $255 million.
Current report
•On April 9, 2025 the Company, entered into an amendment to its Existing ABL Credit Facility which reduced the asset-based credit facility from $3,000 million to $2,100 million, extended the maturity date to April 2030 and maintained similar collateral support, but reduced commercial letter of credit fees and unused facility fees.
Current report
The Company had no outstanding borrowings under the Amended & Extended ABL Credit Facility as of August 1, 2026 and August 2, 2025.
Removed paragraphs (13)
Previous report
The Company is in its third year of the execution of its Bold New Chapter strategy, whichf irmly places energy and focus onthe 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:
Previous report
◦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.
Previous report
◦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.
Previous report
◦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.
Previous report
•. Accelerate luxury growth
Previous report
◦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.
Previous report
◦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.
Previous report
◦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.
Previous report
◦Macy's comparable sales increased 1.6%.
Previous report
◦Bloomingdale'scomparable sales increased 10.2%.
Previous report
◦Bluemercury comparable sales increased 6.4%.
Previous report
Comparison of the First Quarter of 2026 and the First Quarter of 2025
Previous report
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.
Reworded paragraphs (24)
Previous wording
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.
Current wording
For purposes of the following discussion, all references to "second quarter of 2026" and "second quarter of 2025" are to the Company's 13-week fiscal periods ended August 1, 2026 and August 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.
Previous wording
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.
Current wording
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 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 with the first quarter of 2026, adjusted earnings metrics reflect our new non-GAAP metrics.
Previous wording
Comparable sales 1 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:
Current wording
Comparable sales 2 highlights for the second quarter of 2026 versus the second quarter of 2025 are as follows:
Previous wording
•Macy's, Inc. comparable sales increased 3.0%.
Current wording
•Macy's, Inc. comparable sales increased 2.7%.
Previous wording
•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:
Current wording
•Macy's, Inc. go-forward business, inclusive of go-forward locations and digital across nameplates, total revenue increased 1.9% to $4.9 billion and comparable sales increased 2.8%. The Company's go-forward nameplate highlights include:
Previous wording
•Reimagine 200 locations comparable sales, included within Macy's go-forward business comparable sales, increased 2.4%.
Current wording
•Reimagine 200 locations comparable sales, included within Macy's comparable sales, increased 1.9%.
Previous wording
1 Comparable sales refers to owned-plus-licensed-plus-marketplace sales. All reported nameplate comparable sales results are on a go-forward basis.
Current wording
2 Comparable sales refers to owned-plus-licensed-plus-marketplace sales. All reported nameplate comparable sales results are on a go-forward basis.
Previous wording
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.
Current wording
See pages 26 to 27 for reconciliations of the supplemental non-GAAP financial measures to their most comparable GAAP financial measure and for other important information.
Previous wording
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 saleswas 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.
Current wording
Net sales for the second quarter of 2026 increased $54 million, or 1.1%, compared to the second quarter of 2025. Excluding the $35 million impact of the 14 non-go-forward locations closed at the end of fiscal 2025, net sales grew 1.9%. The increase in net sales was driven by comparable sales growth at all three nameplates. Macy's outperformed in many categories including watches, dresses, petites, career sportswear, kids, handbags, fragrances and men's and women's shoes. Big-ticket categories underperformed compared to the second quarter of 2025 but improved compared to the first quarter of 2026.
Previous wording
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 comparedto the first quarter of 2025.
Current wording
Selling, general and administrative ("SG&A") expenses increased $16 million, or 0.8%, in the second quarter of 2026 compared to the second quarter of 2025 due to higher variable costs driven by sales growth as well as investments in Bold New Chapter initiatives. These investments were partially offset by ongoing cost containment efforts. The decrease in SG&A expenses as a percent of total revenue in the second quarter of 2026 compared to the second quarter of 2025 was primarily driven by improved operating leverage from a higher total revenue base, together with disciplined expense management.
Previous wording
Asset sale gains in both the first quarter of 2026 and 2025 primarily reflect the monetization of store locations.
Current wording
Asset sale gains in both the second quarter of 2026 and 2025 primarily reflect the monetization of store locations.
Previous wording
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.
Current wording
The decrease in net interest expense in the second quarter of 2026 compared to the second quarter of 2025 was primarily driven by an increase in interest income as the Company received $3 million in interest from tariff refunds in the second quarter of 2026.
Previous wording
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.
Current wording
Income tax expense of $58 million, or 25.6% of pretax income, for the second quarter of 2026 and expense of $28 million, or 24.3% of pretax income, for the second quarter of 2025, reflect a different effective tax rate compared to the Company’s federal income tax statutory rate of 21%. The income tax effective rates for both the second quarter of 2026 and 2025 were impacted primarily by the effect of state and local taxes.
Previous wording
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.
Current wording
The increase in other revenues included a $22 million increase in credit card revenues, reflecting the continued strength of the credit portfolio and prudent management of net credit losses. Macy's Media Network revenues were roughly flat compared to 2025.
Previous wording
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.
Current wording
The $1 million of impairment, restructuring and other benefits recognized in 2026 primarily relate to the benefit recognized from lease modifications offset by store closure costs. The $30 million of impairment, restructuring and other costs recognized in 2025 primarily related to store closure costs.
Previous wording
The Company ended thefirst 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 thefirst 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.
Current wording
The Company ended thesecond quarter of 2026 with a cash and cash equivalents balance of $1,294 million, an increase of $465 million from $829 million at the end of thesecond quarter of 2025. The Company is party to the Amended & Extended ABL Credit Facility with certain financial institutions providing for a $2,100 million asset-based credit facility. As of August 1, 2026, borrowing availability was $1,958 million, which reflects a$142 million reduction due to standby letters of credit outstanding.
Previous wording
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.
Current wording
The net cash provided by operating activities in the current year versus 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.
Previous wording
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.
Current wording
The Company's capital expenditures were $324 million in 2026 compared 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.
Previous wording
The Company paid dividends totaling $50 million and $51 million in 2026 and 2025, respectively.
Current wording
The Company paid dividends totaling $101 million and $100 million in 2026 and 2025, respectively.
Previous wording
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.
Current wording
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 2026, the Company repurchased approximately 4.9 million shares of its common stock at an average cost of $20.48 per share on the open market under its share repurchase program. 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. As of August 1, 2026, $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.
Previous wording
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.
Current wording
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 August 1, 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 Amended & Extended 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.
Previous wording
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.
Current wording
The following tables include combined financial information of the Obligor Group. Investments in subsidiaries of $11,539 million and $7,016 million as of August 1, 2026 and January 31, 2026, respectively, have been excluded from the Summarized Balance Sheets. Equity in earnings of non-Guarantor subsidiaries of $255 million and $786 million for the 13 and 26 weeks ended August 1, 2026, respectively, 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.
Previous wording
(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.
Current wording
(a)Includes net amounts due to non-Guarantor subsidiaries of $7 million and $2 million as of August 1, 2026 and January 31, 2026, respectively.
Previous wording
(b)Includes $279 million of dividend income from non-Guarantor subsidiaries for the 13 weeks ended May 2, 2026.
Current wording
(b)Includes $29 million and $308 million of dividend income from non-Guarantor subsidiaries for the 13 and 26 weeks ended August 1, 2026, respectively.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
The $16 million and $22 million of impairment, restructuring and other costs recognized in the second quarter of 2026 and the second quarter of 2025, respectively, primarily relate to store closure costs.
Current report — wording carried from elsewhere
See pages 26 to 27 for reconciliations of the supplemental non-GAAP financial measures to their most comparable GAAP financial measure and for other important information.
Current report — wording carried from elsewhere
Asset sale gains in both 2026 and 2025 primarily reflect the monetization of store locations.
Current report — wording carried from elsewhere
Income tax expense of$88 million and $58 million, or 27.5% and 31.9% of pretax income, for 2026 and 2025, respectively, 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 26 weeks ended August 1, 2026 and August 2, 2025 were impacted primarilyby the effect of state and local taxes and the tax impact related to the vesting and cancellation of certain stock-based compensation awards.