Key questions from the first quarter earnings call conducted by Macy’s, Inc. on May 14, 2008.

Christine Augustine (Bear Stearns): You had affirmation of the $1.85 to $2.15. Given the economy and the uncertainty, why not just affirm to the lower end and see how the year plays out?

Karen M. Hoguet: On the sales front, we are going to need to start seeing the economy improve and have a stronger recovery than many of us are thinking in order to achieve the higher end of the sales range. Without achieving the higher end of the sales range, it will be harder to achieve the higher end of the earnings range.

Christine Augustine (Bear Stearns): Could you give an update on your thoughts with regard to the debt that is coming due later this year?

Karen M. Hoguet: We have $650 million of debt that comes due in the September/October timeframe and we are thinking about refinancing that.

Christine Augustine (Bear Stearns): Did you take early markdowns in the quarter on the women’s apparel?

Karen M. Hoguet: All of our markdowns are taken as a function of rate of sale, so if things are not selling, we take our markdowns on a timely basis and are extremely disciplined about maintaining the aging of inventory. So if something is not selling, it will get marked down. I do not know if that is early or late relative to what you are thinking.

Hilary Morrison (Lehman Brothers): Have you factored any type of input cost inflation into your annual guidance and if so, can you give color around your expectations for that?

Karen M. Hoguet: We are beginning to see some increases in some of the raw material costs, like cashmere, leather, cotton, as well as overall inflation but I do not think it will have a meaningful impact until 2009.

Hilary Morrison (Lehman Brothers): Can you talk about your expectations for the level of coupon days relative to 2007 that is incorporated into your expectations for gross margin?

Karen M. Hoguet: It is about the same.

Adrianne Shapira (Goldman Sachs): Could you give color in terms of traffic, ticket trends and how it trended during the quarter and where it finished at the end of the quarter?

Karen M. Hoguet: Average unit retail continued to go up in the quarter. I do not have good traffic data because it is a question of traffic and conversion, so I do not know how to address that issue but there are fewer units being sold if the AUR went up and total sales went down. As you think about it by month, February and March were weaker than April relative to our expectations, as well as relative to last year.

Adrianne Shapira (Goldman Sachs): Could you comment in terms of May and early Mother’s Day?

Karen M. Hoguet: I do not want to make too much of a short period of time but early May has started off well.

Adrianne Shapira (Goldman Sachs): How are you planning inventory?

Karen M. Hoguet: We are trying to stay flexible in terms of our inventory purchasing so we are planning towards the lower end of the guidance in terms of what people should be thinking in terms of expense and inventory.

Jeff Stein (Soleil Securities): Your private label brands seem to have outperformed the market brands. On the margin side, given the fact that you are not in a position to get the relief from your vendors on markdowns on private label, did your private label margins suffer more than branded margins during the first quarter?

Karen M. Hoguet: I do not have that data in front of me. Usually that is not a big issue.