Updated 4:45 p.m. ET Sept. 3
Macy’s Inc. beat its own expectations for top- and bottom-line second-quarter results, lifted by investments in top Macy’s doors and solid performances at Bloomingdale’s and Bluemercury.
With its executives pleased by the quarter’s showing, the corporation raised its sales and profit guidance for 2025.
“This is the moment where we are stepping up and leaning into our recent successes, and making sure it continues,” Tony Spring, Macy’s Inc.’s chairman and chief executive officer, told WWD in an interview.
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Asked if Macy’s has reached a turning point, Spring said: “I’d rather consider it the beginning of momentum. We are in a very uncertain environment, but what we can control is our work and our strategy.”
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Macy’s Inc.’s net sales in the second quarter ended Aug. 2 decreased 2.5 percent to $4.8 billion, but that included the 64 Macy’s department store closings last year. Comparable sales grew 1.9 percent, marking the retailer’s best same-store sales growth in 12 quarters and exceeding the company’s guidance.
Net income was $87 million, and adjusted net income was $113 million. That compares to net income of $150 million and adjusted net income of $149 million in the year-ago period. Spring attributed the profit decline to a drop in asset sale gains and lower margins reflecting markdowns to clear spring merchandise, though the margins still came in above guidance and the impact of tariffs from Macy’s “limited amount of China content.”
The stock soared 20.8 percent to $16.28 at closing Wednesday.
At the Macy’s division, net sales, inclusive of store closures, were down 3.8 percent. Comparable sales were up 1.2 percent. Macy’s go-forward business comparable sales were up 1.5 percent.
Macy’s “reimagined” 125 department stores, where the company has been investing to improve service and staffing in high-traffic areas, achieved comparable sales growth of 1.4 percent. Spring said investments have been made “where we have undershot the customer in providing a quality experience, in fitting rooms, women’s contemporary, fine jewelry and men’s tailored.”
In addition, Spring said investments to beef up merchandise “across the board” have been made, citing women’s contemporary, denim, home furnishings, housewares and tabletop, lab-grown diamonds and shoes, while editing out some opening price points in juniors.
Bloomingdale’s net sales were up 4.6 percent; comparable sales rose 5.7 percent. It was the upscale department store’s fourth consecutive quarter of growth. “Bloomingdale’s is continuing to build stronger relationships in the marketplace. We are adding brands,” and part of that comes from “capitalizing on the disruption in the marketplace,” Spring said. “There is a clear go-get list of brands [Bloomingdale’s] wants to have.” He also cited the store’s variety of merchandise and “great storytelling,” as strengths. Additional Bloomie’s are planned for 2026 and 2027. (Bloomie’s is the scaled down, contemporary-oriented version of Bloomingdale’s.) “We don’t need more Bloomie’s or Bloomingdale’s outlets for growth. We have organic growth.” Additional Bloomingdale’s outlets are also planned for next year.
Bluemercury’s net sales were up 3.3 percent. Comparable sales increased 1.2 percent.
Spring sounded cautious on his outlook for fall and holiday, indicating a “wait-and-see” attitude that reflected uncertainties on how shopping plays out amidst fluid macroeconomics and changes in tariffs. He characterized the consumer as resilient yet choiceful, and said he’s been pleased with business for back-to-school, August and early fall, which is an indicator for business ahead, though not necessarily a sure one.
Spring feels strongly that Macy’s Inc.’s range of formats and price points, from off-price to luxury — a “good, better, best” approach as he called it — is an advantage, particularly in uncertain times with quickly shifting consumer shopping trends. Whether it’s at the Macy’s Backstage off-price format, a Macy’s department store, a Bloomingdale’s outlet or an upscale full-price Bloomingdale’s store, “there’s always something the customer can find to fit their wallet and their value equation,” the CEO said.
Macy’s Inc. raised its sales outlook for 2025 a bit, to between $21.15 billion and $21.45 billion, from the previous forecast of between $21 billion and $21.4 billion. Comparable sales are now projected at down 1.5 percent to down 0.5 percent, from the previous forecast of down 2 percent to down 0.5 percent.
Adjusted diluted earning per share are now seen reaching $1.70 to $2.05, versus the previous projection of $1.60 to $2.
“As demonstrated in its [second-quarter] report, Macy’s scale, financial position, relationships with vendors and recent initiatives to improve sales should help it navigate the challenging external environment,” David Silverman, senior director, Fitch Ratings, wrote in a note Wednesday. “During [the second quarter,] the company saw revenue improvement across its go-forward business, with solid expansion at Bloomingdale’s and more modest growth at Macy’s. These results suggest the company’s recent efforts to drive sales are bearing fruit, likely supported by execution challenges at key competitors in the department store and softlines space.
“The company will continue to face a choppy environment in the near future, with cost pressures from tariffs and a somewhat uncertain consumer. Fitch expects results for Macy’s and its discretionary retail peers to moderate in the back half of 2025 given the impact of tariffs on cost structures and consumer behavior. However, Fitch continues to expect financially stronger players like Macy’s will have the best chance to manage through near term volatility and potential fortify their market position for the longer term.”
Zachary Warring, analyst from CFRA Research, has a “hold” recommendation on Macy’s shares. “Shares rose 13 percent on the release and trades around eight times the midpoint of its fiscal year 2026 guidance. We think this was a strong performance in a tough operating environment.”
In other second-quarter results:
- Merchandise inventories decreased 0.8 percent year-over-year.
- The company returned $100 million to shareholders, including $50 million in quarterly dividends and $50 million in share repurchases.
- The gross margin rate of 39.7 percent declined 80 basis points “reflecting proactive markdowns on remaining early spring product to maintain healthy inventories and product bought under prior tariff rates.”
- Macy’s Inc. ended the second quarter of 2025 with cash and cash equivalents of $829 million and had $2 billion of available borrowing capacity under its asset-based credit facility. During July and August, the company completed a series of financing transactions to further fortify its balance sheet, increase financial flexibility and modestly reduce leverage, which resulted in a net reduction of long-term debt of about $340 million.
“Our performance highlights the advantages of being a multibrand, multicategory, omnichannel retailer,” Spring said in a statement. “The substantive, enterprise-wide improvements across our business, with a strong focus on customer experience, give us further confidence that our Bold New Chapter initiatives can drive sustainable, long-term profitable growth.” The company’s three-year Bold New Chapter strategy, introduced in February 2024, calls for closing 150 Macy’s stores, accelerating growth in the luxury sector, opening about 15 Bloomie’s stores; opening at least 30 new Bluemercury stores, and remodeling about 30 Bluemercury stores.
During his conference call with investors and industry analysts, Spring said, “As one of their largest partners, we receive compelling product from the brands our customers ask for, including Coach, Donna Karan, Levi’s and Ralph Lauren, just to name a few.
“We’ve been attracting new partners, including Abercrombie kids, expanding our distribution to existing labels such as Sam Edelman, Hugo Boss, Good American, and we’re continuing to update our private brand assortment,” Spring said.
Turning to category performance at Macy’s, Spring said: “Comparable sales of women’s contemporary and career as well as men’s tailored clothing outperformed. In addition, fine jewelry and watches, textiles and mattresses continued to experience strong demand. The success of these categories illustrates the breadth of product and price points that we offer and our ability to cater to customers’ evolving lifestyle needs.”
At Bloomingdale’s in the second quarter, ready-to-wear, fine jewelry, fragrance and tabletop were standouts. At Bluemercury, results were driven by dermatological skin care and recent brand launches, including Byredo, Victoria Beckham Beauty and Charlotte Tilbury.
He sees growth ahead in Macy’s private label business. “Private brands is still well below our 20 percent high watermark,” and is currently in the low teens as a percent of Macy’s total business. “That’s an opportunity for us to grow sales and span differentiation and improve margins,” Spring said.