Macy's Inc
M · NYSE
Oct 2026
Next quarter
Expected to report Dec 2, 2026 — estimated from last year’s reporting date.
Consensus is -$0.20 EPS for Oct 2026 across 1 estimates, ranging -$0.20 to -$0.20.
M Jul 2026
- 8.11%
- +7.71%
- $0.37
- $0.40
- —
- $4.87B
Reported results
- $4.87B
- $244.00M
- $169.00M
- $0.62
Highlights
- Underlying earnings: Adjusted diluted EPS excluding the net tariff refund benefit was $0.40, above the $0.37 consensus estimate by 8.1%; reported GAAP EPS was $0.62 versus $0.31 a year ago.
- Sales growth: Net sales rose 1.1% year over year to $4.866 billion, while comparable sales increased 2.7% and go-forward comparable sales rose 2.8%.
- Brand performance: Bloomingdale’s comparable sales increased 11.3%, Bluemercury rose 6.2%, Macy’s increased 1.1%, and Reimagine 200 stores grew 1.9%.
- Profitability: Operating income increased to $244 million from $149 million a year ago and from $112 million in the prior quarter; adjusted EBITDA rose 23% year over year to $457 million.
- Tariff refunds: Gross tariff refunds contributed approximately $95 million to gross margin and $0.23 to quarterly adjusted EPS net of tax; Macy’s is investing $96 million of the $116 million total refund proceeds in 2026.
- Margin execution: Gross margin expanded 180 basis points to 41.5%, although the tariff refund accounted for 180 basis points; excluding that benefit and a 10-basis-point tariff and fuel headwind, gross margin was up 10 basis points.
- Cash and liquidity: Operating cash flow for the first half reached $586 million versus $255 million a year ago, cash ended the quarter at $1.294 billion, and available ABL capacity was $1.958 billion.
- Raised outlook: Fiscal 2026 net sales guidance increased to $21.675-$21.825 billion, comparable sales guidance to 1.0%-1.5%, adjusted EBITDA margin to 7.8%-8.0%, and adjusted EPS to $2.15-$2.35.
Analysis
Macy’s second quarter was a broad-based sales and execution improvement, with the underlying adjusted EPS result of $0.40 exceeding the $0.37 consensus estimate by 8.1%. Net sales increased 1.1% year over year to $4.866 billion, while comparable sales rose 2.7%; versus the prior quarter’s $4.68 billion of revenue, $112 million of operating income, $63 million of net income and $0.23 diluted EPS, the quarter showed clear sequential operating leverage. Reported GAAP EPS doubled to $0.62 from $0.31 a year ago, though the comparison included a $0.23 net tariff refund benefit. Adjusted EPS was $0.63, or $0.40 excluding that benefit, versus $0.35 last year.
The print was defined by continued strength in the company’s growth initiatives and a favorable but largely temporary tariff contribution. Bloomingdale’s delivered 11.3% comparable growth, Bluemercury rose 6.2%, and Macy’s Reimagine 200 stores grew 1.9%. Operating income climbed to $244 million from $149 million a year ago, while adjusted EBITDA rose to $457 million from $373 million. Management raised full-year guidance across sales, comparable sales, EBITDA margin and EPS, while directing most tariff proceeds toward customer, Reimagine 200 and luxury investments rather than near-term earnings.
Comparable sales momentum
- Portfolio growth: Company comparable sales increased 2.7%, marking the fifth consecutive quarter of growth, while go-forward comparable sales rose 2.8%. Net sales increased 1.1% to $4.866 billion, or 1.9% excluding approximately $35 million of sales from stores closed at the end of fiscal 2025.
- Macy’s stores: Macy’s comparable sales increased 1.1%, with the Reimagine 200 locations up 1.9%. These stores represent approximately 60% of the Macy’s go-forward fleet and approximately 75% of Macy’s go-forward sales.
- Luxury nameplates: Bloomingdale’s comparable sales rose 11.3% and reached its highest second-quarter sales volume in the brand’s history. Bluemercury comparable sales increased 6.2%, supported by makeup, dermatological skincare and fragrance.
- Category mix: Macy’s saw strength in watches, dresses, petites, career sportswear, kids, handbags, fragrances and men’s and women’s shoes. Big-ticket categories remained below last year, although they improved sequentially from the first quarter.
Tariff refund impact
- Quarterly benefit: Macy’s received $98 million of tariff refunds during the quarter, including approximately $95 million reflected in gross margin and $3 million in interest income. The net after-tax benefit was $0.23 per adjusted diluted share.
- Underlying margin: Reported gross margin increased 180 basis points to 41.5% from 39.7%. Excluding the 180-basis-point tariff benefit and a 10-basis-point tariff and fuel headwind, gross margin improved 10 basis points.
- Reinvestment plan: Macy’s has received or expects to receive $116 million of refunds in total, including $18 million after quarter end. Approximately $20 million will flow through full-year EPS, while $96 million will be reinvested in customer initiatives, the Bold New Chapter strategy and long-term growth.
- Second-half comparison: Full-year guidance incorporates approximately $0.05 per share of net tariff benefit, implying roughly $0.18 per share of reinvestment in the second half after the $0.23 quarterly benefit.
Profitability and operating leverage
- Operating income: Operating income rose to $244 million, or 4.8% of total revenue, from $149 million, or 3.0%, a year ago. It also more than doubled from $112 million in the prior quarter.
- Adjusted earnings: Adjusted net income was $170 million and adjusted diluted EPS was $0.63, compared with $98 million and $0.35 last year. Excluding the tariff refund benefit, adjusted net income was $107 million and adjusted EPS was $0.40.
- EBITDA: Adjusted EBITDA increased to $457 million from $373 million, with the margin reaching 9.0% of total revenue versus 7.5% last year.
- Cost control: SG&A increased $16 million to $1.960 billion as Macy’s invested in Bold New Chapter initiatives and absorbed higher variable costs, but SG&A declined to 38.7% of total revenue from 38.9%, reflecting sales leverage and cost management.
Raised fiscal outlook
- Sales guidance: Fiscal 2026 net sales guidance increased to $21.675-$21.825 billion from $21.5-$21.75 billion, while comparable sales guidance rose to 1.0%-1.5% from 0.5%-1.2%.
- Profit guidance: Adjusted EBITDA as a percentage of total revenue is now expected at 7.8%-8.0%, versus 7.7%-7.9% previously. Adjusted diluted EPS guidance increased to $2.15-$2.35 from $2.00-$2.20.
- Investment priorities: The revised outlook includes planned investments in Reimagine 200 locations and luxury nameplates, alongside the reinvestment of most tariff refund proceeds. Management continues to flag macroeconomic and geopolitical uncertainty around discretionary spending.
Cash and capital allocation
- Cash generation: First-half operating cash flow was $586 million, up from $255 million a year ago. The increase included $328 million received from settlements resolving credit card interchange fee litigation matters in which Macy’s was a plaintiff.
- Liquidity: Cash and cash equivalents ended the quarter at $1.294 billion, up from $829 million a year ago. The company had $1.958 billion of borrowing availability under its $2.1 billion ABL facility and no outstanding ABL borrowings.
- Inventory and debt: Merchandise inventory increased 2.5% year over year to $4.449 billion. Total debt was $2.4 billion, with no material long-term maturities until 2030.
- Shareholder returns: Macy’s paid $51 million in dividends and repurchased 2.2 million shares for $50 million during the quarter. First-half repurchases totaled $100 million, with approximately $1.0 billion remaining under the $2.0 billion authorization.
