Macy’s Turnaround Gains Momentum as Sales Growth and Guidance Improve

Macy’s on Thursday reported companywide growth in its second fiscal quarter and lifted its full-year outlook as its turnaround effort gains traction.

The retailer said overall comparable sales increased 2.7% for the quarter, while sales at its namesake stores rose 1.1%. Macy’s attributed much of the improvement to its “reimagined” stores, which it has renovated as a central part of its turnaround strategy.

Comparable sales at premium department store chain Bloomingdale’s jumped 11.3%, while beauty retailer Bluemercury posted a 6.2% increase.

“We’re creating, I think, performance beyond just one quarter,” CEO Tony Spring told CNBC. “This is now six quarters of better-than-expected top line and bottom line performance, five quarters of comparable sales growth, two quarters of net sales growth.”

Macy’s also raised its full-year net sales forecast to between $21.68 billion and $21.83 billion, compared with its previous range of $21.5 billion to $21.75 billion. It increased its comparable-sales growth outlook to 1%–1.5%, from an expected 0.5%–1.2%.

The retailer lifted its full-year adjusted earnings-per-share forecast to $2.15–$2.35, up from $2.00–$2.20. The guidance includes a roughly five-cent-per-share benefit from anticipated tariff repayments.

Macy’s said it has received $116 million in tariff refunds and plans to invest about $96 million of that amount in improving the customer experience and supporting its turnaround.

Key second-quarter results compared with Wall Street expectations, based on an analyst survey by LSEG, were as follows:

• Earnings per share: $0.40 adjusted; it was not immediately clear whether this figure was comparable with the $0.37 expected
• Revenue: $4.87 billion, compared with $4.83 billion expected

Macy’s reported net income of $169 million, or $0.62 per share, versus net income of $87 million, or $0.31 per share, a year earlier. After excluding one-time items, earnings per share were $0.40.

Quarterly sales rose to approximately $4.87 billion from $4.81 billion a year earlier.

The company said credit card revenue increased 2%, or $3 million, during the quarter, reflecting what it described as a “healthy credit portfolio and stable net credit card losses.”

Macy’s is nearing the end of a three-year turnaround plan led by Spring that is intended to revive growth and direct investment toward its strongest locations amid difficult conditions for department stores. Spring said last quarter that consumer behavior remained encouraging despite the challenging macroeconomic environment.

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