梅西百货（M）：前景趋软；资产负债表稳定

SofterOutlook; Stable BalanceSheet Key points: 1) Upgrade Macy's 2030s and 2032s to MarketWeight and expect JWN to reset wide to Macy's; 2) activistpressure quieted but not gone; 3)affirmUnderweight onlonger-dated notes; 4) outlook for 2025softer. Hale Holden+1 212 412 1524hale.holden@barclays.comBCI, US Carolyn Popelka+1 212 526 0935carolynanne.popelka@barclays.comBCI, US Investment Recommendation Macy's 1Q results included some clear positives and negatives. 1Q was ahead of our targets andthe company commented that April/March represented an improvement in trends fromFebruary (similar to other retailers) with a further improvement into May. However, thecombination of a slowing consumer, flow through from goodsaffectedbytariffsandexpectation for increased promotional intensity from peers caused Macy's to lower FYE EBITDAguidance and provide 2Q margin and EPS guidance that fell short of our expectations. As a positive, the company noted that it has not front loaded inventory buys, preferring to chaseand stay nimble (we view this as the best approach) and in a subtle dig to ongoing issues at SaksGlobal highlighted its balance sheet strength gives certainty to vendors that they will be paid.Positive comparable sales growth at Bloomingdale's in 1Q does increase our confidence thatMacy's may benefit if Saks begins to shed customers. We currently estimate FYE25 EBITDA at $1.66bn, which would result in FYE25 leverage of 1.7xwith net leverage 1.1x. There has been no recent update on last year's activist pressure, but we wouldn't read into thelack of headlines as the issue is settled/defeased. Macy's 2030s are trading at 296bp OAS with the 2032s at 344bp. The 2030s are wide of the LTMmean but only slightly at 274bp with an LTM range of 185bp (May 2024) and wide of 450bp (April9, 2025). In comparison, the HY Ba index is 190bp and the B index at 310bp. With Macy's tradinginside of the B index and behind the Ba index, we view levels as at the tighter end of fair givenoutside beta to a slowing consumer(offsetby low leverage and ample balance sheet capacity). We upgrade our rating to Market Weight on the 2030s and 2032s given current pricing. Weaffirmour Market Weight rating on the 2029 and shorter notes given shorter duration. WeaffirmourUnderweight on the longer duration notes given what we believe remains adifficultoperatingenvironment for the department store model. Thisdocument is intended for institutional investors and is not subject to all of theindependence and disclosure standards applicable to debt research reports prepared for retailinvestors under U.S. FINRA Rule 2242. Barclays trades the securities covered in this report for itsown account and on a discretionary basis on behalf of certain clients. Such trading interestsmay be contrary to the recommendationsofferedin this report. Please see analyst certifications and important disclosures beginning on page 5.Completed: 28-May-25, 19:08 GMTReleased: 28-May-25, 19:12 GMTRestricted - External We continue to view Nordstorm, which recently completed its go-private transaction, as a betterUnderweight relative to Macy's. JWN 2031s are trading at 257bp or through Macy's 2030s. Weultimately think JWN should reset wide to Macy's given higher leverage and less transparency. FIGURE 1. M 2029 - 43s vs HY B, & BB indicies + JWN 2031s Open in Barclays Live Chart Source:Credit- Barclays Trading, S&P Global Market Intelligence;Bloomberg Indices- Bloomberg Key Points •Macy's posted 1Q numbers that came in ahead of our estimates as well as ahead of company•guidance. Net sales were $4.6bn versus guidance of $4.4-4.5bn, with a solid pick-up in Marchand April given theweather-affectedstart to the quarter. Macy's stated that quarter to date,the momentum built in March and April has improved, though the company believes it isprudent to maintain FY25 top-line guidance as it evaluates theeffectsoftariffsand broadermacro developments on consumer demand. Despite maintaining its top-line, M took down itsEBITDA margin guidance 80bp at the midpoint to account fortariffs,a slowing consumer, andmore promotions. •Bloomingdale's comped up 3.8% y/y, led by strength in launches like Prada, Reformation and•Burberry. The company highlighted it is gaining share in the luxury space, which we believemay be partly at the expense of Saks Holdings. We view Bloomingdale's specifically as acompetitive asset of Macy's, targeting a higher-income consumer than Macy's nameplate. •At the end of FY24, 20% of Macy's product was sourced from China, with private brands•sourcing 27% from China and national brands sourcing 18%, where the company has lesscontrol. Macy's notes it has began to delay and cancel orders as well as renegotiate withvendors. The company highlighted that its healthy balance sheet serves as adifferentiatorduring these conversations. Assuming the currenttariffregime stays in place, it is calling foran annual gross margin impact of 20-40bp. FY25 gross margin is expected to