Macy’s Inc. shares soared 20 percent on Tuesday after the department store chain delivered second-quarter results that beat Wall Street expectations and posted its first increase in comparable sales in three years. The New York-based retailer also raised its full-year forecast, signaling renewed momentum in its turnaround efforts under Chief Executive Officer Tony Spring.
The company reported adjusted earnings of 41 cents per share for the quarter ended August 2, far exceeding analyst estimates of 19 cents. Revenue reached $4.81 billion, surpassing forecasts of $4.76 billion. The strong performance was attributed to improved store traffic, disciplined inventory management and a shift toward higher-margin, full-price selling.
Comparable sales rose 0.8 percent on an owned basis and 1.9 percent when including licensed and marketplace locations, ending a 12-quarter streak of declines. The increase in same-store sales was driven by strong results from the company’s “Reimagine” store initiative, which saw a 1.1 percent gain. These locations feature updated layouts, curated merchandise and enhanced customer experiences aimed at revitalizing the brand’s retail footprint.
Luxury banners Bloomingdale’s and Bluemercury also contributed to growth, posting comparable sales increases of 3.6 percent and 1.2 percent respectively. Key categories such as apparel, beauty and accessories performed strongly, particularly in back-to-school and early fall assortments. Executives said consumers responded well to newness in the product mix rather than promotional pricing, helping to protect margins.
Sales rise at Bloomingdale’s and Bluemercury
Tony Spring, who took over as Macy’s CEO in February 2024 after leading Bloomingdale’s, has been steering the company through a transformation plan dubbed “A Bold New Chapter.” The strategy includes closing approximately 150 underperforming stores by 2026 and reinvesting in top-performing locations. Macy’s is also refreshing its merchandise lineup with contemporary brands including DKNY and Good American, as part of efforts to modernize its appeal and boost customer retention.
Following the better-than-expected quarterly results, Macy’s raised its full-year outlook. The company now expects net sales between $21.15 billion and $21.45 billion, compared with its previous range of $21.0 billion to $21.4 billion. Full-year adjusted earnings per share are forecast between $1.70 and $2.05, up from the earlier guidance of $1.60 to $2.00. Executives credited strong consumer engagement and reduced markdowns for the improved forecast.
Despite inflationary pressures and supply chain-related headwinds, Macy’s said it has adjusted its sourcing strategies and implemented selective price increases to manage rising costs. The company now expects tariffs to impact margins by 40 to 60 basis points, higher than its previous estimate of 20 to 40 basis points, but said cost-control measures will help mitigate the effect.
Macy’s strategy wins investor confidence
Spring emphasized that customers are increasingly shopping with intent, focusing on new arrivals rather than clearance racks. He noted that early signs point to strong demand heading into the holiday season, which remains critical for Macy’s financial performance in the second half of the year.
The stock rally reflects growing investor confidence in Macy’s transformation strategy and its ability to adapt to shifting consumer behavior. Tuesday’s gains marked the retailer’s largest one-day increase since November 2021, lifting the company’s shares to their highest level in over a year. – By Content Syndication Services.