Macy’s Delivers Its Strongest Growth In Over Three Years, While Taking A Prudent Holiday Outlook

Macy’s on Wednesday surpassed Wall Street’s sales expectations for the third consecutive quarter and delivered its strongest growth in more than three years, reflecting momentum in its turnaround strategy.

Following a better‑than‑expected fiscal third quarter, the company raised its full‑year guidance. Macy’s now anticipates adjusted earnings per share between $2 and $2.20, up from a prior range of $1.70 to $2.05, and net sales of $21.48 billion to $21.63 billion, compared with previous expectations of $21.15 billion to $21.45 billion.

The retailer projects flat to roughly 0.5% comparable sales growth year over year, an improvement from its earlier forecast of a decline between 0.5% and 1.5%. The industry metric excludes one‑time factors such as store openings and closures, and Macy’s calculation includes owned merchandise, brand‑funded shop‑in‑shops and its third‑party online marketplace.

This marks the second straight quarter in which Macy’s increased its full‑year sales and earnings outlook. In May, the company reduced its full‑year earnings forecast due to higher tariffs, increased promotions and “some moderation” in discretionary spending.

Despite the raised guidance, projected annual net sales would be lower than the prior year’s $22.29 billion. Macy’s said approximately $700 million of that decline is attributable to the 64 stores it closed at the end of the last fiscal year, which ended Feb. 1, and in the early part of the current fiscal year.

Macy’s noted in its news release that the outlook assumes two pressures will persist during the holiday quarter: selective consumer spending and elevated tariffs. The company’s shares fell about 1% on Wednesday.

In an interview with CNBC, CEO Tony Spring said Macy’s is taking a “prudent view” of the fourth quarter because of challenging year‑over‑year comparisons and uncertainty about how “aspirational customers,” who favor the brand but face greater financial constraints, will spend during the season.

“We’re pleased with the fourth quarter to date, but we have a big holiday in front of us,” he said.

Spring emphasized that the department store format is advantageous during the gift‑giving period, offering broad merchandise variety and a spectrum of prices, from off‑price to luxury.

During the fiscal third quarter, Macy’s delivered adjusted earnings per share of 9 cents versus an expected loss of 14 cents, and revenue of $4.71 billion versus $4.62 billion anticipated by analysts surveyed by LSEG.

Macy’s is focused on stabilizing and growing sales, particularly at its namesake stores. While Macy’s department stores represent the bulk of the New York City‑based retailer’s business, performance has trailed its higher‑end department store, Bloomingdale’s, and beauty chain, Bluemercury. To address this, the company has invested in staffing, sharper assortments and impactful visual presentations. The strategy began at 50 “First 50” locations and has expanded to 125 Macy’s stores, more than one‑third of the 350 namesake stores slated to remain open.

Alongside those investments, Macy’s has closed lower‑performing locations. In early 2024, the company announced plans to permanently shutter about 150 namesake stores by early 2027, while expanding Bloomingdale’s and Bluemercury.

The company has not yet specified how many additional stores may close this fiscal year.

For the three‑month period ended Nov. 1, net income was $11 million, or 4 cents per share, compared with $28 million, or 10 cents per share, in the same quarter last year. Excluding certain items, including gains from real estate sales, adjusted earnings per share were 9 cents.

Revenue declined from $4.74 billion in the year‑ago period.

Companywide comparable sales in the fiscal third quarter increased 3.2% on an owned‑plus‑licensed basis, including the third‑party marketplace. Excluding stores that will not be part of Macy’s go‑forward fleet, comparable growth was 3.4%.

Bloomingdale’s delivered the strongest brand performance, with comparable sales rising 9% year over year on an owned‑plus‑licensed basis, including its third‑party marketplace. Bluemercury’s comparable sales increased 1.1%.

Spring credited improvements at Macy’s legacy department stores, such as more associates on the floor and newer brands like high‑end home goods company MacKenzie‑Childs, for the better results.

He said he visited Macy’s and competitor stores on Black Friday and was encouraged by what he observed.

“I like the way we’re showing up,” Spring said. “We look crisp. We look clean. We look interesting, compelling, inspiring, easy to shop.”

Cooler weather provided a lift, he added. As temperatures fell in October, shoppers purchased items such as cashmere sweaters, outerwear and boots.

For the holiday period, Spring expects promotional activity at Macy’s stores and website to be in line with last year, and similar to competitors.

Higher tariffs will translate into higher prices for some products. Macy’s has worked with vendors and manufacturers to mitigate the impact, and the margin hit in the third quarter was lower than expected.

Even so, Spring said Macy’s has taken “selective” price increases across nearly every category, with some items costing more due to improved quality or added embellishments and others reflecting higher import costs.

As of Wednesday’s close, Macy’s shares were up nearly 33% year to date, outpacing the S&P 500’s gain of more than 16% over the same period. Macy’s stock closed at $22.46, giving the company a market capitalization of approximately $6.03 billion.