Macy’s tops estimates as turnaround continues; hikes outlook
Macy’s Inc. reported better-than-expected second-quarter results with comparable sales gains across its three banners and raised its full-year guidance.
The department store giant, which had its best comparable sales growth in 12 quarters, benefitted from investments in its namesake stores and robust performances from its Bloomingdale’s and Bluemercury divisions.
On the company’s earnings call, CFO Tom Edwards said that Macy’s is exploring more price hikes on certain products due to tariffs.
“We’re adjusting prices, but as appropriate, not broad-based and really assessing it with our partners in an effort to remain competitive,” Edwards told analysts on the call. “I believe that we are really well-positioned to navigate through this time given our business model.”
In commenting on Macy’s results, David Silverman, senior director, Fitch Ratings, said that the retailer’s recent efforts to drive sales are "bearing fruit,” likely supported by execution challenges at key competitors in the department store and softlines space.
But he warned that the company will continue to face a choppy environment in the near future, with cost pressures from tariffs and a somewhat uncertain consumer.
“Fitch expects results for Macy’s and its discretionary retail peers to moderate in the back half of 2025 given the impact of tariffs on cost structures and consumer behavior,” he said. “However, Fitch continues to expect financially stronger players like Macy’s will have the best chance to manage through near term volatility and potential fortify their market position for the longer term."
Second Quarter
Macy’s net income totaled $87 million, or $0.31 per share, for the quarter ended Aug. 2, compared with $150 million, or $0.53 per share, the year-ago period. Adjusted earnings were $0.41 per share, easily topping analysts’ estimates of $0.19 per share.
Net sales, including store closures, fell 2.5% to $4.81 billion. Analysts had expected sales of $4.7 billion. Comparable sales inched up 0.8% on an owned basis and rose 1.9% on a comparable owned-plus-licensed-plus-marketplace (“O+L+M”) basis, benefiting from positive comps across nameplates.
By banner, Macy’s net sales, inclusive of store closures, were down 3.8%. Comparable sales were up 0.4% on an owned basis and up 1.2% on an O+L+M basis.
Comparable sales at Macy’s revamped (“Reimagine”) 125 locations rose 1.1% on an owned basis and 1.4% on an owned-plus-licensed (“O+L”) basis, continuing to outperform the broader Macy’s nameplate. The revamped locations feature improved service and interior updates.
Bloomingdale’s posted its fourth consecutive quarter of growth with comparable sales up 3.6% on an owned basis and increasing 5.7% on an O+L+M basis.
Bluemercury reported comparable sales growth of 1.2%, its 18th consecutive quarter of gains.
The company also reported a $28 million increase in credit card net revenues to $153 million.
“Our teams achieved better than expected top- and bottom-line results during the second quarter, driven by our strongest comparable sales growth in 12 quarters, reflecting the strong performance in Macy’s Reimagine 125 locations, Bloomingdale’s and Bluemercury,” said chairman and CEO Tony Spring, Macy’s. “Our performance highlights the advantages of being a multi-brand, multi-category, omni-channel retailer.”
“The substantive, enterprise-wide improvements across our business, with a strong focus on customer experience, give us further confidence that our Bold New Chapter initiatives can drive sustainable, long-term profitable growth,” Spring continued.
Introduced in February 2024, Macy’s Bold New Chapter strategy includes closing 150 Macy’s stores, prioritizing investment in approximately 350 “go-forward” nameplate locations, accelerating growth in the luxury sector with the opening of about 15 Bloomingdale’s stores and at least 30 Bluemercury stores during the next three year.
Macy’s now expects full-year 2026 adjusted earnings of $1.70 a share to $2.05 a share, up from its earlier estimate of $1.60 a share to $2 a share. Sales are expected to range between $21.15 billion and $21.45 billion, from its previous forecast of between $21 billion and $21.4 billion.
