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Our products, colleagues and customers mirror the diversity we see across the country. We are an anchor and a trusted resource for all of the communities that we serve. And while we are honored to uphold many of the traditions of the past, like the Macy's Thanksgiving Day Parade in SantaLand, we are also there for our current and potential customers as they celebrate the moments and holidays that are most meaningful to them. Being a modern department store is key to that relevancy. The concept of a trusted one-stop shop is timeless. It works, but only if it reflects the preferences and needs of our customer, and we have transformed our entire organization to do just that. With our breadth and diversity of product across multiple nameplates that are not tied to just 1 value bands, category and use or life stage, our position is a strength especially in the current environment where the styles our customers are looking for, the categories they are seeking and how much they are spending can differ dramatically from 1 season to the next.

It also is what attracts new customers to us. We are committed to providing quality, fashion newness, timely flows and relevancy through is, first, acuration of premium owned and market brands, which we bring to life at Macy's through our owner style platform. Second, a disciplined approach to inventory, reflecting conservative buying and a healthy receipt reserve that ensures flexibility when our customer pivots and signals new interests. And third, a modernized supply chain and pricing science tools, which yield higher turnover, gross margin return on investments and higher cash flow. These attributes have been critical unlocks to our success. Third quarter net sales of $5.2 billion were at the high end of our guidance provided on our second quarter call, declining 3.9% to last year and rising 3.1% to 2019.

Customers continue to return to in-person post-pandemic shopping experiences, and we're searching for occasion-based product, including career in tailored sportswear, dresses and luggage rather than popular pandemic categories such as active, casual sportswear, sleepwear and soft home, that skew more heavily towards digital purchases. These factors contributed to the relative outperformance of brick-and-mortar sales declined 1% to last year. Digital sales declined 9% to last year. Relative to 2019, a brick-and-mortar sales declined 9% and digital sales rose 35%. During the quarter, Macy's digital traffic remained relatively consistent, but conversion softened, suggesting that while discovery is still occurring online, there has been a shift in in-person transactions.

Regardless of where our customer ultimately makes a purchase, we strive to provide the best omnichannel experience throughout their journey. We are making digital investments to authentically communicate and serve their lifestyle needs whenever and however they choose to shop with us. That includes the introduction of personalization and live shopping, as well as the ongoing refinement of existing online platforms, including our mobile app where we registered an 11% rise in active customers on a trailing 12-month basis. Compared to our average Macy's customer, active app users spend more per transaction and per year. Turning to comps. Our owned-plus-licensed comparable sales declined 2.7%. Luxury nameplates, Bloomingdale's and Bluemercury continued to outperform.

Bloomingdale's posted 4.1% comp sales growth and expanded its active customer file by 9% on a trailing 12-month basis, while Bluemercury saw comp sales growth of 14% and grew its active customer file by 15%. Although in different stages of the revolution, we see a significant long-term growth opportunity for both nameplates. Macy's owned-plus-licensed comp sales declined 4%. On a trailing 12-month basis, active customer count grew by 2% and our Star Rewards active customer base, which is our most valuable customer, represented 70% of Macy's owned-plus-licensed comparable sales, 5 points higher than last year. Throughout the quarter, our customer responded well to our mix of full price, promotions and markdown items. When combined with selectively higher tickets, we realized our executive quarter of AUR gains.

End-of-quarter inventories were better than expected, rising 4% to 2021 and down 12% to 2019. And we achieved adjusted EPS of $0.52, well above our guidance. While we are pleased with our progress, we are committed to doing more. Our customers are savvy and they have a lot of options. Our team is aligned on what it takes to be successful and relevant today and into the future. This includes, one, an improved shopping experience for all customers through reducing friction across omni touch points; two, more personalized offers and loyalty communications; three, a compelling mix of private label and branded product; and four, speedier checkout and delivery with the right service when our customer needs it. In addition to these ongoing initiatives, we are also enhancing other go-to-market strategies to inspire new and existing customers.

Last month, we introduced permanent Toys "R" Us shop-in-shops within all Macy's locations, providing an experience that does not exist on a national basis elsewhere. These shops are adjacent to the kids department, making it easier to discover with room for kids to explore in a space designed for them. We are encouraged by the initial response. Overall, the Toys "R" Us customer is younger and more diverse than our Macy's customer, and we have discovered that 85% of Toys "R" Us customers are cross-shopping. Toys "R" Us is a great example of finding a hole in the market and strategically filling it, gaining share and loyalty and creating lasting memories for children and adults alike. Another example is the late September launch of Macy's digital marketplace.

Marketplace features a collection of new brands, products and categories from third-party sellers, representing a low-risk way to introduce customers to new options without shouldering inventory liability. While not the first to do this, we believe our curated offerings will keep existing customers on our platform while bringing in new ones. Units per order are above the Macy's average, and we are seeing customers cross-shop with mixed bags, including owned, vendor direct and marketplace items which is encouraging. And similar to Toys "R" Us, it further cements our status as a one-stop shop. Another way we were staying close to our Macy's customer is by refining our in-person shopping experience. Market by Macy's, which we introduced in February of 2020, plays a unique role in our omnichannel market ecosystem.

These off-mall stores are 25,000 to 50,000 square feet compared to our full line average of roughly 185,000 square feet and offer a highly curated immersive shopping experience that celebrates discovery and convenience. Market by Macy's conversion rates are generally higher than that of our full-line stores, and these locations continue to outpace their respective trade areas and acquisition of new customers. Today, we operate 8 Market by Macy's. As we evaluate potential new locations, we are looking at areas where we have a strong digital presence, but no physical footprint, where it no longer makes sense for us to keep a full-line store and Market by Macy's can act as a replacement. A good example is the Market by Macy's in St. Louis, Missouri, which opened last week and is a mile away and less than 1/5 of the size of its mall-based predecessor.

All these initiatives taken together plus others like the ongoing reimagination of our private brands, our Own Your Style brand platform and our Macy's Media Network are a testament to our focus of reclaiming Macy's voice as a multigenerational influencer and arbiter of American fashion and helping customers connect with the product that empowers, inspires and speaks to their unique individual preferences. We are focused on remaining relevant by doing so in an authentic way that honors our rich and unparalleled heritage. That emphasis on bridging the past with our future at Macy's also applies to Bloomingdale's, where we are celebrating our 150th anniversary with a series of events and exclusive collaborations with top designers. The collections, along with pop-up shops and events with brands such as Ralph Lauren, Jimmy Choo and Dior speak to our relationships with both established players, as well as the next generation of luxury designers our customers are creating.

Following 7 quarters of comp owned-plus-licensed sales growth, we are excited about the opportunity at Bloomingdale's and the expansion of our off-mall smaller format, Bloomie's, nameplate. Today, in the Chicago land area, we are opening our second Bloomie's. At 50,000 square feet, it serves as a replacement of the 206,000 square foot full-line Old Orchard location. Momentum has also continued to build at our other luxury nameplate, Bluemercury, where we registered our fourth consecutive quarter of comparable sales growth. Another way we're maintaining a close relationship with our customers, colleagues and communities and 1 which we are all proud of is the launch of S.P.U.R Pathways in early November with our momentous capital. S.P.U.R Pathways is a multiyear, multifaceted program that ultimately will provide up to $200 million of funding to diverse owned and underrepresented businesses.

The program is designed to advance entrepreneurial growth, close wealth gaps and address systemic barriers among minority-owned businesses. S.P.U.R Pathways also represents an ongoing evolution of our mission -- everyone social purpose, commitment to people, communities and plant. Before turning it over to Adrian, I would like to provide insight into the recent trends and our current thinking around the fourth quarter. In the middle of October, there was an unexpected slowdown in sales, which continued into November, markets that were unseasonably warm were the most affected. Over the past week, our sales performance has improved. We are evaluating the sustainability of recent trends and the drivers that we believe will impact holiday consumption.

When we think about last year, the consumer was flushed with cash. and there was a pull forward of demand on well-documented inventory constraints. This year, is hearing about a glut of inventory. They are under a tighter budget feeling the impact of inflation on nondiscretionary items and beginning to deplete their savings. With that in mind, we believe they are waiting until closer to holiday to make purchases, especially as there is an extra day, which is a Saturday between Thanksgiving and Christmas. We now expect holiday shopping patterns to be similar to 2019 and are taking the appropriate actions to support anticipated higher peaks around Black Friday, Cyber Week and the 2 weeks before Christmas. The holidays are happening. Trips are booked, parties and family gatherings are planned.

consumers will be spending, but it is too early to tell how much they will allocate to our outdooring categories. We are confident in the amount and composition of our inventory, timing of flows and marketing, but cognizant that we do not operate in a vacuum. The low end of our outlook assumes late October and early November sales trends continue. Pressure on the consumer persists and the promotional competitive landscape intensifies throughout the holiday and into January. The high end assumes that sales patterns will be consistent with our 2019 trends and reflects recent adjustments to our operating plan for holiday. As we navigate this period of uncertainty, our financial health and operational disciplines, along with our experienced leadership team are key advantages.

We are flexible, agile and well positioned for the fourth quarter and 2023. Here's why. Our inventory is in great shape. We have roughly 55% newness for holiday, 30 percentage points higher than 2019, and we are not saddled with older receipts in pandemic category overstocks. Across nameplates, we have products and brands that cater to our customers' lifestyle needs with a variety of price points that will allow everyone, including last-minute shoppers to participate in the magic of holiday at Macy's, Inc. This includes exclusive cosmetics and fragrances from Dior and Armani, established brands such as UGG, Ralph Lauren, The North Face and Jordan, as well as newer additions, Kylie Cosmetics, Nest Candle, Friends and Pandora. With our strong vendor relationships and mix of private brand and licensed brands, we can chase into areas of strength that warrant it and have a flexible pricing model to quickly adjust promotions and markdowns if demand does not materialize.

We believe we are taking in an appropriate cautious stance on our outlook given the myriad of unknowns. However, that does not temper our enthusiasm for holiday. We know our customer relies on us for an exceptional holiday experience, and as we have for the past several years, we'll deliver. With that, I'll pass it over to Adrian for a deeper look into the third quarter and details on the remainder of the year.

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Adrian Mitchell: Thanks, Jeff, and good morning, everyone. It has been two years since my first earnings call. At that time, I spoke to the three reasons I joined Macy's Inc., our brand, our talented and dedicated team and the focus within our Polaris strategy on innovation and operational excellence, all designed to capitalize on the opportunities in the changing consumer landscape. I also shared that my initial focus was a return to financial health and the creation of additional capacity to invest in profitable sales growth while returning capital to our shareholders. Protecting our financial health is paramount. Beginning in August 2021, our teams took a series of aggressive actions to pay down over $1.8 billion of long-term debt and we ladder our fixed interest rate debt maturities.

As a result, we are now benefiting from our vastly improved leverage ratio and more attractive debt maturity schedule. Disciplined decisions around the governance of inventory are also a top priority. Effectively managing inventory gives us the flexibility and liquidity to what consumers are buying at every customer touch point. This is imperative as it impacts all aspects of our business, including the health of our margin profile as well as the amount of cash we have available to both invest in strengthening our omnichannel capabilities and to return to shareholders. The investments we have made in data and analytics from demand forecasting to inventory allocation to pricing signs have laid the foundation for continued inventory control now and well into the future.

We also have a disciplined approach to make pivotal decisions quickly across our entire enterprise. Now let me walk through the third quarter results and our 5 value creation levers before discussing our outlook for the remainder of the year. First is omnichannel sales. We generated $5.2 billion in net sales during the quarter, a decline of 3.9% versus the prior year. Compared on an owned-plus-licensed basis decreased by 2.7%. During the third quarter, 20% omnichannel markets grew sales year-over-year, accounting for about 15% of Macy's brand comparable owned-plus-license. We have been aggressive about rightsizing our store base, and we'll continue to prioritize asset monetization. However, we continue to see the importance of main locations within the best malls particularly as we build out our omnichannel ecosystem.

We expect to announce less than 10 store closures in January, consistent with our decision to delay the closure of our full-line store base that we communicated last year. The second value creation lever is gross margin. For the quarter, gross margin was 38.7%, down 230 basis points from the prior year period and better than our expectations. The gross margin rate decline was driven by a 230 basis point decline in merchandise margin, reflecting an increase in promotional and clearance markdowns to sell lower moving categories at Macy's, including casual apparel soft home and warmer weather seasonal goods. Our pricing signs, including location-level pricing, continue to drive incremental margin benefit and improve the effectiveness of promotions for Macy's, Inc.

We are in the mid-innings of our pricing work and are continuing to refine and invest in machine learning tools that will allow for more sophisticated competitive pricing and greater automation at scale. Partially offsetting the additional third quarter markdowns were higher ticket prices and favorable category mix shifts, driving a roughly 3% improvement in own AUR for Macy's, Inc. Delivery expense accounted for 4.3% of net sales, relatively consistent with last year. Higher fuel costs more than offset the impact of a 2 percentage prime in digital penetration and reductions in delivery cost per package. We continue to get smarter about where demand is and how best to service that demand. As part of our continued efforts to increase the productivity of our physical assets, we have converted space in 35 stores to serve as mini-DC.

These semi-automated mini-DC totaling nearly 1 million square feet allow us to reduce shipping costs and split shipments, better utilize inventory in specific markets and regions and improved delivery speed, which will be an advantage this holiday season. They are relatively low-cost complements to our existing fulfillment network. We have also made the appropriate process and technology investments to streamline fulfillment activities in all remaining stores. The investments we're making in our supply chain, both upstream and downstream, our focus on simplifying our processes and modernizing our technology further enhancing our keepers to move product to our customers faster while driving greater supply chain cost efficiencies. The third value creation lever is inventory productivity.

Inventory increased 4% year-over-year, which was better than our expectations and down 12% compared to '19. We have strategically brought in seasonal products earlier and have the added capacity to chase in-season trends. Inventory turnover for the trailing 12 months improved 15% from 2019 and was relatively flat to 2021 when levels were artificially low due to supply chain constraints. Expense discipline is the fourth value creation lever. SG&A increased $84 million or 4.3% to $2.1 billion. SG&A percent of net sales was 39.3%, 300 basis points higher than last year. Compared to 2019, SG&A improved by 330 basis points. SG&A reflects the investments we have made in our colleagues as we continue to adjust compensation to remain competitive and attract the best talent.

A reminder in 2021, we benefited from an elevated number of job openings, the vast majority of which has since been filled. During the quarter, SG&A also benefited from Macy's Media Network, which generated net revenues of $31 million, up 21% from last year. Credit card revenues were $206 million, down $7 million from last year. As a percent of net sales, credit card revenues were consistent with the prior year 0.9%. Performance continued to be driven by lower bad debt levels than expected, larger balances within the portfolio and higher-than-expected spend on co-brand credit cards. After accounting for interest and taxes, these results generated better-than-expected adjusted diluted EPS of $0.52 versus $1.23 in 2021 and $0.07 in 2019. Lastly, the fifth value creation lever is capital allocation.

Year-to-date through October, we generated $488 million of operating cash flow and invested $983 million in capital expenditures. Year-over-year, operating cash flow was impacted by outflows from accounts payable and accrued liabilities as well as a net outflow from the change in merchandise inventories net of merchandise accounts payable due to the timing of receipts and payments. Year-to-date, free cash flow, inclusive of proceeds from real estate was an outflow of $373 million. For the full year, we met capital expenditures to be $1.2 billion, up from $1 billion, reflecting investments to improve our omnichannel capabilities and strengthen our competitive position in the marketplace. We are committed to our overall capital allocation strategy, which includes maintaining a healthy balance sheet and investment-grade credit metrics, investing in value enhanced initiatives and capabilities and returning capital to shareholders through quarterly dividend and share repurchases.

In light of the current macroeconomic environment, our focus is prioritizing liquidity and balance sheet health in order to maintain flexibility to respond quickly to a variety of opportunities and scenarios as they arise. Next, I'll walk through our updated outlook for the fourth quarter and fiscal year. Full details of our updated guidance can be found within the presentation on our website. As we think about this critical fourth quarter, we believe that every sale has to be earned through fresh items that consumers want to purchase as well as quality and clear value. Our guidance range contemplates the risk associated with softening consumer demand and the impact of the broader competitive landscape. While we are comfortable with our inventory position, we will continue to proactively adjust promotions and take markdowns necessary to drive sell-throughs in slower moving categories and ensure that we do not carry inventory risk into 2023.

In light of the late October and early November trends and the uncertain demand environment, we now forecast fourth quarter net sales of $8.16 billion to $8.4 billion. Gross margin for the quarter is expected to be no more than 270 basis points lower than 2021. For the fourth quarter, we expect adjusted earnings per share between $1.47 and $1.67. For the full year, our expectations for Macy's, Inc is largely unchanged. We expect net sales of $24.3 billion to $24.6 billion. Digital as a percent of net sales to be approximately 33%. Gross margin down roughly 150 basis points from 2021. SG&A as a percent of net sales to rise approximately 120 basis points from 2021. Net credit card revenues of approximately 3.4% of net sales up from our outlook of 3.3%.

Asset sale gains of $75 million to $90 million. Lower benefit plan income up $21 million compared to our prior outlook of $25 million. Adjusted EBITDA margin of roughly 10.5% and interest expense of $180 million, down from $185 million. After interest and taxes, we are now estimating annual adjusted earnings per share of $4.07 to $4.27, reflecting increase in credit card revenues, lower benefit plan income, lower interest expense and a change in our shares outstanding expectation. Combined, these changes resulted in the $0.07 increase from our prior outlook. Our outlook does not consider the impact of any potential future share repurchases associated with our current share repurchase authorization. In closing, our strong inventory management practices along with our liquidity, investment-grade credit metrics and fixed interest rate debt and mid-pricing interest rate environment allow us to operate from a place of strength and flexibility, even when the broader macroeconomic environment is challenging.

We believe, we are well positioned to compete this holiday season. We have the tools, the data-driven processes and the talented teams to manage through this uncertain time, and are committed to building a better and more relevant Macy's, Inc. of the future. With that, I'll turn it back over to Jeff for some closing remarks.

Jeff Gennette: Thanks, Adrian. Although the macroeconomic environment is uncertain, we are confident in our ability in this holiday and beyond. We believe Macy's, Inc is poised for a future of profitable growth. We are committed to making strategic investments to provide a positive and consistent shopping experience for our customers, rich careers for our colleagues and an attractive return for our investors. We will do this while bolstering our position as a leading modern department store. And with that, we're going to open it up for questions.

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