Macy's Sees Upgrades Paying Off But Anticipates Lower Sales This Year

Macy's, Inc. (M) turned in quarterly results that outpaced analyst forecasts, signaling that its store overhaul and strategic pushes are gaining traction. Despite this, the company cautions that sales for the full fiscal year are expected to decline compared with 2025.

CEO Tony Spring underscored that the company is halfway through a major revamp strategy targeting its flagship Macy's stores, alongside expansion efforts in its premium chains Bloomingdale's and Bluemercury. The refreshed Macy's locations have shown stronger sales performance, bolstered by new brands and improved shopper experiences, including better staffing and merchandising.

Even with the positive momentum, the retail giant projects full-year revenue between $21.4 billion and $21.65 billion, sliding below 2025's $21.8 billion mark. Adjusted earnings per share are forecast between $1.90 and $2.10, down from $2.15 last year and shy of Wall Street's expectations of $2.17. Comparable sales could fluctuate slightly around flat, reflecting uncertain market conditions.

Spring highlighted several external factors clouding the outlook: fluctuating gas prices, geopolitical tensions in the Middle East, and uncertainties surrounding trade tariffs. The company is taking a cautious stance, focusing on what it can control amid these variables, which could heavily influence discretionary spending patterns.

Macy's has already shuttered over 80 of the around 150 Macy's stores slated for closure by early 2027, with plans now extended to finish closures by 2028 to better capitalize on real estate market conditions. Meanwhile, enhancements at the remaining stores include introducing trendier, often higher-end brands like Theory and Good American, targeting a younger, more fashion-conscious customer base.

Bloomingdale's reported a standout holiday season, delivering nearly 10% comparable sales growth, aided by a luxury market shake-up following the bankruptcy of Saks Global. Bluemercury also saw modest gains, underscoring strength in the beauty segment.

Spring described Macy's shoppers as resilient, particularly those in middle- and upper-income segments who continue to invest in wardrobe updates and premium products rather than just essentials. This diversity in price points across Macy's brands serves as a buffer against economic unpredictability.

While digital sales now account for roughly a third of Macy's overall revenue, the company views its physical stores as crucial hubs for customer engagement, with investments in staffing and store atmosphere paying off. About 60% of Macy's stores have been "reimagined" under the recent enhancement efforts, showing stronger sales trends compared to the rest.

Shares of Macy's have had a roller coaster year, up nearly 25% over the past 12 months before sliding about 23% so far in 2026, reflecting the complex challenges facing retailers today. Whether Macy's can sustain this renewed momentum while navigating a tricky environment remains an open question.