Macy's turnaround shows promise as earnings beat estimates, outlook improves

Macy's turnaround shows promise as earnings beat estimates, outlook improves

Grace O'Donnell · Editor, Special Projects

Thu, September 10, 2026 at 5:30 PM GMT+3 3 min read

• M -2.46%

Macy's (M) turnaround efforts continued to gain momentum in the second quarter, giving the department store chain leeway to raise its cautious guidance again.

In the second quarter, Macy's same-store sales rose 2.7%, marking the fifth straight quarter of growth and widely surpassing Wall Street's expectations for 0.8% comparable sales growth, according to S&P Global Market Intelligence data.

Macy's luxury store, Bloomingdale's, shone yet again with 11.3% sales growth in the quarter, while beauty chain Bluemercury's sales grew 6.2%. Macy's flagship brand posted 1.1% sales growth, with newly revamped stores reporting a modestly stronger 1.9% growth.

The company is in the third year of its "Bold New Chapter" transformation strategy, pegged on closing 150 underperforming stores and reinvesting in the remaining 350 locations. It's also hoping that editing out redundant merchandise and adding fashionable brands, such as Theory and Free People, will appeal to Macy's middle- to upper-income consumers, who have shown greater resilience amid rising consumer pressures.

"This performance reinforces our confidence that the Bold New Chapter continues to gain momentum," Macy's CEO Tony Spring said on the earnings call. "Our initiatives are resonating, highlighted by six consecutive quarters of better-than-expected results, five consecutive quarters of comparable sales growth, and two consecutive quarters of net sales growth."

Macy's stock fell over 2% on Thursday. Wall Street has remained cautious on the stock, which has risen less than 2% year to date, compared with a 12% gain for the S&P 500 (^GSPC).

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Macy's beat analyst estimates on the top and bottom lines as well. Adjusted earnings of $0.63 per share beat the Street's estimate of $0.37 per share, helped in part by a $0.23 per share boost from tariff refunds, net of reinvestment. Net sales of $4.87 billion also beat expectations of $4.8 billion.

Macy's said it received all of the expected refunds from the IEEPA tariffs that the Supreme Court struck down in February. Since the beginning of the second quarter, Macy's collected $116 million in tariff refunds. The company plans to direct $20 million of those proceeds to profits and reinvest the remaining $96 million in the company.

The results come as consumer sentiment remains dampened, with high gas prices and macroeconomic uncertainty taking their toll. Throughout the second quarter earnings season, businesses have highlighted that the retail landscape has become highly promotional as consumers continue to spend but have become choosier about what to splurge on.

With consistent turnaround progress in hand, Macy's raised its full-year financial guidance for the second quarter in a row. Macy's now expects 2026 net sales of $21.6 billion to $21.8 billion, up from previous guidance of $21.5 billion to $21.75 billion.

Same-store sales are expected to increase 1.0% to 1.5%, up from previous guidance of 0.5% to 1.2%, and adjusted diluted earnings per share are expected in a range of $2.15 to $2.35, up from $2.00 to $2.20.

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