TLDR
- Macy’s reported Q4 adjusted earnings per share of $1.67, surpassing analyst expectations of $1.57
- Quarterly revenue declined 1.7% annually to $7.64 billion, yet exceeded projections of $7.62 billion
- Same-store sales increased 1.8%, significantly outperforming the anticipated 0.9% drop
- Shares surged 9% during Wednesday’s premarket session following a 23% year-to-date decline
- Annual EPS outlook of $1.90–$2.10 fell short of the $2.20 analyst consensus
Macy’s (M) delivered fourth-quarter results that exceeded Wall Street expectations on Wednesday, propelling shares 9% higher in premarket activity following a challenging period for the retailer.
The iconic department store operator announced adjusted quarterly earnings of $1.67 per share, topping the Street’s $1.57 consensus estimate. Sales totaled $7.64 billion, representing a 1.7% year-over-year decrease but nonetheless surpassing analyst projections of $7.62 billion.
The top-line contraction stemmed primarily from strategic store shutdowns executed during the previous fiscal period. Excluding these closures reveals a healthier underlying performance.
Same-store sales — a critical retail benchmark tracking locations operational for at least twelve months — climbed 1.8%. This figure crushed the anticipated 0.9% contraction and emerged as one of the report’s standout metrics.
Chief Executive Tony Spring’s “Bold New Chapter” transformation plan moved into its sophomore year, with continued emphasis on attracting affluent consumers. This strategic pivot manifested clearly in brand performance: the flagship Macy’s banner posted comparable sales growth of merely 0.4%, while Bloomingdale’s surged 8.5% and Bluemercury expanded 2.5%.
With shares down 23% prior to earnings, even a moderate upside surprise carried meaningful momentum.
Annual Forecast Underwhelms
For fiscal year 2026, Macy’s projects net sales ranging from $21.4 billion to $21.7 billion, accompanied by adjusted earnings per share of $1.90 to $2.10. Wall Street had anticipated $21.42 billion in revenue and $2.20 in earnings.
While the sales guidance brackets consensus estimates, the earnings forecast misses expectations — both at the midpoint and upper bound.
Executives emphasized a “prudent approach” to forward projections, pointing to macroeconomic and geopolitical uncertainties. Consumer expenditure remains under pressure, especially among budget-conscious shoppers grappling with persistent inflation.
Store closings are projected to eliminate approximately $145 million in sales during the current fiscal year. Though anticipated, this remains a tangible obstacle.
First Quarter Tariff Pressures Highlighted
Tariff implications represent another critical variable on management’s radar. The retailer maintains substantial China sourcing operations and indicated that import duties will exert maximum margin pressure during the first quarter of 2026 — identifying that period as the peak impact window.
Macy’s anticipates tariff headwinds will moderate during the year’s latter half. This perspective aligns with other major retailers, including Walmart and Kohl’s, which have similarly issued conservative annual projections.
Following a Supreme Court decision implementing a standardized 10% tariff rate, companies that purchased inventory under elevated duty structures continue facing short-term cost challenges as existing merchandise flows through channels.
Retailers with significant China dependency are monitoring Q1 developments intensively. For Macy’s, this translates to a more challenging first-half environment before — assuming projections materialize — conditions improve later in the fiscal year.
The fourth-quarter performance provided investors with encouraging data points. Same-store sales advanced 0.4% at the Macy’s brand, jumped 8.5% at Bloomingdale’s, and grew 2.5% at Bluemercury.
