Macy’s Raises Full-Year Outlook After Strongest First Quarter in Four Years
“Better-than-expected sales and profitability prompted the upward revision to the fiscal 2026 outlook.” — CEO Tony Spring
Macy's Inc. reported its strongest first-quarter comparable sales performance in four years, driven by renovations and strength at its Bloomingdale's chain, and subsequently raised its full-year guidance for fiscal 2026. The company also reported fourth-quarter results that exceeded Wall Street expectations, though it earlier issued a cautious outlook for the current fiscal year citing macroeconomic uncertainties.
Fourth Quarter Fiscal 2025 (Ended January 31)
Financial Highlights
- Adjusted Earnings Per Share: $1.67, exceeding the analyst estimate of $1.53 to $1.54.
- Net Income: $507 million ($1.84 per share), compared to $342 million ($1.21 per share) in the year-ago quarter.
- Revenue: $7.64 billion, down from $7.77 billion in the prior year, but above analyst projections of $7.5 to $7.62 billion.
Comparable Sales
- Company-wide: Increased by 1.8%, including owned, licensed, and third-party marketplace sales.
- Macy's Namesake: Grew by 0.4%; when considering only stores slated to remain open, growth was 0.6%.
- Bloomingdale's: Increased by 9.9% to nearly 10%, outperforming the analyst expectation of a 2.5% increase.
- Bluemercury: Grew by 1.3%.
First Quarter Fiscal 2026 (Ended May 2)
Financial Highlights
- Net Income: $63 million (23 cents per share), compared to $38 million (13 cents per share) a year earlier.
- Adjusted Earnings Per Share: 13 cents.
- Revenue: $4.68 billion, up approximately 2% from $4.60 billion, exceeding analyst expectations of $4.61 billion.
Comparable Sales
- Overall: Increased 3%.
- Macy's Namesake: Rose 1.6%, led by approximately 200 stores that have undergone renovations.
- Bloomingdale's: Grew 10.2%.
Fiscal Year 2026 Outlook (Revised After Q1)
Macy's raised its guidance for the full fiscal year after first-quarter results exceeded expectations. Key projections include:
- Net Sales: Expected between $21.5 billion and $21.75 billion.
- Earnings Per Share: Forecasted between $2.00 and $2.20, up from a previous range of $1.90 to $2.10.
- Comparable Sales: Expected to increase between 0.5% and 1.2%, compared to an earlier outlook of a 0.5% decline to a 0.5% increase.
Strategic Context and Store Closures
Macy's is currently executing a three-year turnaround plan under CEO Tony Spring, referred to as the "Bold New Chapter" strategy. This plan involves strengthening the core Macy's brand, leveraging Bloomingdale's and Bluemercury, and improving supply chain and technology operations.
As part of this initiative, Macy's plans to close approximately 150 of its namesake stores, representing over a quarter of its locations, by early 2027. The company is investing in the roughly 350 stores that will remain open by enhancing staffing, introducing new brands, and refining visual merchandising. At 125 locations where these investments were implemented, comparable sales grew by 0.9%. This investment strategy is set to expand to an additional 75 stores, bringing the total number of remodeled locations to 200.
“Business trends observed in Q1 have continued into Q2. All three brands posted growth in both the fiscal year and the holiday quarter, and Macy's achieved positive comparable sales growth for the first time in three years.” — CEO Tony Spring
Forward-Looking Caution
Despite the positive quarterly results, the company's earlier full-year guidance incorporated "macroeconomic and geopolitical factors that could influence discretionary spend." The outlook anticipates a greater impact from tariffs in the first half of the year, with the first quarter experiencing the most significant effect.
Spring indicated that new market uncertainties, including gas prices, ongoing geopolitical conflicts, and potential changes in tariffs, make predicting the year ahead more challenging, leading the company to adopt what it described as a "prudent approach" to its initial outlook.
Stock Performance
Over the past year, Macy's stock has risen by nearly 25%, outperforming the S&P 500's approximately 20% gain during the same period. Year-to-date, however, Macy's shares have experienced a decline of about 23%. The stock closed at $16.92, resulting in a market value of $4.5 billion.