Macy’s Inc. exceeded its own expectations on sales during the third quarter, boosting optimism for the holiday season and prompting the retailer to raise its 2025 guidance.
Adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, increased to $285 million, and core adjusted EBITDA was $273 million. That compares to adjusted EBITDA of $273 million, and core adjusted EBITDA of $207 million in the year-ago quarter. (Core adjusted EBITDA excludes additional items not considered central, or “core” to the business.)
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Net income was $11 million, and adjusted net income was $26 million for the third quarter ended Nov. 1. That compares to net income of $28 million and adjusted net income of $11 million in the year-ago quarter. The net was impacted by a loss of $170 million in volume from closing Macy’s stores, fewer asset sales than in 2024, and other factors.
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Macy’s Inc. generated third-quarter net sales of $4.71 billion, compared to $4.74 billion in the year-ago period, though the company indicated that the most recent sales figure exceeded its expectations and included store closings.
Comparable sales — including owned, licensed and marketplace sales — rose 3.2 percent and also surpassed the company’s expectation. Comp sales are considered a better measure of the company’s performance.
By division, net sales at Macy’s, inclusive of store closures, were down 2.3 percent. Comparable sales were up 2 percent.
Macy’s 125 “Reimagine” stores, which are those receiving significant investments for increased staffing in high-traffic areas such as women’s shoes and fitting room areas, fresher products and improved visuals, achieved comparable sales growth of 2.7 percent. They continue to outperform the overall Macy’s department store chain.
Bloomingdale’s comparable sales were up 9 percent, marking the upscale department store’s biggest gain in 13 quarters. Bluemercury reported a 1.1 percent gain in comparable sales.
The company raised its guidance on sales for 2025 and adjusted diluted EPS guidance. Sales are seen reaching $21.47 billion to $21.63 billion, up from the previous forecast of $21.15 billion to $21.45 billion. Comparable sales are now forecast to be flat to up about 0.5 percent, while the previous forecast called for comp sales to be down 1.5 percent to about flat.
Despite the upbeat outlook for the year, the company anticipates a 3 to 5 percent decline in fourth-quarter sales compared to last year, as consumers become more choiceful in purchasing and worry about how the economy plays out next year.
Still, Tony Spring, chairman and chief executive officer of Macy’s Inc., told WWD: “We were really pleased with the third quarter and are pleased with the start of the fourth quarter.”
With Black Friday and Cyber Monday past, “a slight lull” in business in the immediate days ahead is expected at Macy’s and industrywide, until around mid-December when gift shopping accelerates again. Spring said December tends to be a particularly big selling period for beauty and fragrance businesses spurred by “last-minute” gift purchasing. “Black Friday and Cyber Monday are big days, but they don’t represent the entirety of the quarter.” He said the company is being “patient” as much of season is still ahead, while being aggressive in pursuing its fair share of the holiday business.
He said consumers continue to be “resilient” particularly middle to upper income consumers who are responding to fashion and newness, across many categories.
Asked if Macy’s is intensifying its Backstage offprice business as consumers, especially moderate and lower income families, become more careful with many trading down, Spring replied: “Backstage continues to grow. Backstage serves a purpose in helping us retain customers seeking more value as we trade up.” Macy’s has been intensifying its upscale and luxury offerings across its portfolio.
He said Bloomingdale’s is “hitting its stride” and has opportunities for organic growth, providing brands with additional points of distribution, and for opening more locations for Bloomies and Bloomingdale’s outlets. Among the brands recently launched at Bloomingdale’s are Toteme, the DWP clothing line by Gwen Stefani, Zimmermann, Victoria Beckham, Christian Louboutin and Roger Vivier. There are no plans for additional full-line Bloomingdale’s department stores. Bloomies are contemporary-oriented, scaled-down, specialized versions of full-line Bloomingdale’s stores.
Early next year, possibly in January or later, Macy’s Inc. will announce that its “Reimagine” program will be expanded to more doors. Also, some additional closures of Macy’s stores are expected to be announced. Brands recently added to Macy’s include Reise, Rodd & Gunn, Theory and MFK.
With Macy Inc.’s Bold New Chapter strategy bearing fruit, Spring was asked if there would be a Bold New Chapter Two. “That’s a good question, but we are not there yet,” he said. “We are not talking about 2027 right now. If something is working, the question is how to continue that, what do you double down on that, and how to you adjust.” Macy’s Bold New Chapter is a three-year strategy that was introduced in February 2024. It centers around closing about 150 Macy’s department stores, accelerating growth in the luxury sector and in online sales, expanding the brick-and-mortar footprints of Bloomie’s, and Bluemercury, and monetizing assets, such as certain real estate holdings.
After rising 2 percent earlier in the day, Macy’s stock closed down 1.1 percent to $22.46 on Wednesday.
“Consumers are more discerning about how and where they spend their dollars,” Spring said during a conference call Wednesday with investors and retail analysts. “They want curated product assortments, consistent service and a seamless omnichannel shopping experience, and that’s exactly what we’re striving to deliver through the three pillars of our bold new chapter strategy, strengthening and reimagining the Macy’s nameplate, accelerating and differentiating luxury and simplifying and modernizing end-to-end operations.”
He cited fine jewelry, watches, handbags, men’s career and women’s ready-to-wear as the best performing categories, outperforming the total Macy’s comp, while active categories were softer.
“We’re in a dress up cycle right now,” Spring said. “We’re selling tailored clothing really well. We’re selling dresses really well. We’re selling career sportswear really well. We’re selling evening and dress shoes really well. So I just think it’s the ebb and flow of the nature of our business. We are prepared and will stay committed to a strong and healthy active business. But it just happened to be softer for the category.”
Regarding tariffs, Spring said they “created some noise and some challenge relative to margin and to pricing that the consumer has experienced, but it hasn’t stopped an interest in consumption.”
The Macy’s stores being reimagined, Spring said, “are now better organized, easier to shop and have a more compelling visual presentation. Within each category, we’re driving higher interest and engagement through increased differentiation. We’re carving out floor space to leverage new trends and maintaining a presence in categories and brands that we’re known for.”
David Silverman, senior director at Fitch Ratings, said: “Macy’s 3Q report, including positive comparable sales at both Macy’s and Bloomingdales, is another data point supporting the company’s ability to stabilize market share through its Bold New Chapter strategy. The company’s efforts to improve merchandising and service appear to be gaining traction, as the company sees somewhat accelerating top-line results despite a choppy environment and ongoing challenges at regional malls. Fitch believes the company continues to benefit from its fundamental strengths including its scale, vendor relationships and good financial position, and is likely taking some share from weaker players in the department store and softlines space.
Silverman also said Macy’s “is striking an appropriately cautious tone on 4Q, given the impact of tariffs on prices and somewhat waning consumer sentiment on spending. The holiday shopping season has just begun, and the trajectories of sales and promotional cadence over the coming weeks are uncertain. However, Fitch expects Macy’s has the tools to navigate this environment, providing the opportunity to improve its longer term positioning particularly given potential competitive fallout elsewhere.”
Emarketer vice president Suzy Davidkhanian, said: “Macy’s Inc. delivered a standout quarter and raised its outlook (for the year) with positive comps across nameplates signaling that its Bold New Chapter is now delivering consistent progress after years of uneven performance. The company is executing with real discipline — a leaner, more productive Macy’s fleet and a portfolio that spans Backstage to Bloomingdale’s and Bluemercury, giving it coverage from value to luxury as consumers remain cautious but continue to spend.
“Macy’s did face margin pressure from inflation and tariffs, likely driving deeper promotions to keep volume moving, but its strategic foundation is holding. Cultural moments like the Mario and K-pop parade balloons (seen in the Thanksgiving Day Parade) keep the brand current and pull new audiences into the fold. With record Thanksgiving-parade viewership and its role as a top gift-giving destination, Macy’s is well positioned heading into the final holiday stretch.”
Spring said in a statement Wednesday morning: “Our third-quarter sales were the strongest in 13 quarters, reflecting the acceleration of our Bold New Chapter strategy and demonstrating that the meaningful enterprise-wide changes we’ve made are resonating with customers. As we enter the holiday season, we are well-positioned with compelling new merchandise and an omni-channel customer experience that delivers both inspiration and value.”
Among other third-quarter results at Macy’s:
- Merchandise inventories increased 0.7 percent year-over-year, in-line with expectations, reflecting tariff-related cost increases.
- The company ended the third quarter with cash and cash equivalents of $447 million and had $2 billion of available borrowing capacity under its asset-based credit facility.
- As of the end of the third quarter this year, total debt was $2.4 billion. The company indicated that it has no material long-term debt maturities until 2030.