Macy’s (M) Q4 2025 earnings
Macy’s It beat Wall Street’s quarterly sales and profit expectations on Wednesday, but offered a cautious outlook for the year ahead even as its namesake brand showed signs of progress.
For the fiscal year, the company, which includes its eponymous chain, high-end department store Bloomingdale’s and beauty retailer Bluemercury, said it expects sales of $21.4 billion to $21.65 billion and adjusted earnings per share of $1.90 to $2.10.
Both represent a decrease from last fiscal year, when revenue was $21.8 billion and adjusted earnings per share were $2.15. Macy’s sales outlook roughly met or exceeded analysts’ expectations of $21.42 billion, but its adjusted earnings forecast fell short of Wall Street’s expectations of $2.17 per share for the year, according to LSEG.
Macy’s said it expects comparable sales, an industry measure that does not take into account short-term factors such as store openings and closings, to range between a 0.5% decline and a 0.5% increase.
In an interview with CNBC, CEO Tony Spring said Macy’s results show its strategy is working. All three of its brands grew in the fiscal year and holiday quarter. This was the fourth quarter in a row that Macy’s beat Wall Street’s sales estimates. Macy’s returns to positive growth for the first time in three years; comparable sales increased 1.5% for the full year.
Even in recent weeks, Macy’s said its customers have shown “continued resilience” as they spend on new clothes and gravitate toward newer brands and trendier items.
But he said Macy’s and other retailers have new unknowns that make it difficult to predict the year ahead, causing the company to take a “cautious” approach in its outlook.
“Given the environment that we operate in, it makes sense for us to not put a hockey stick out there and suggest that we have visibility into what the rest of the year is going to be,” he said.
“Where will gasoline prices be for the rest of the year? How long will the conflicts last in the Middle East? Will tariffs be returned? Will other tariffs be increased or increased? Will the resilient consumer continue?” he said. “We’re not economists. The team is really focused on controlling what they can control.”
The company’s full-year guidance takes into account “macroeconomic and geopolitical factors that may impact discretionary spending,” according to a news release. He said the outlook expects a larger hit from tariffs in the first half of the year than in the second half, and that the first quarter “will have the most meaningful impact.” This also includes the impact of investments the company has made to renovate its stores and the impact of fewer store closures.
Spring said the company continues to include the pre-Supreme Court decision level in its full-year forecast. He said he expects the Macy’s tariff bill to be eased later this year because it will exceed the impact of the tariffs from a year ago.
If the company gets a refund or the tariffs go lower, “that would be a benefit” for Macy’s, he said.
Here’s how the department store operator performed in the fourth fiscal quarter compared to Wall Street expectations, according to a survey of analysts by LSEG:
- Earnings per share: Adjusted $1.67, expected $1.53
- Income: 7.64 billion dollars, while the expectation was 7.62 billion dollars
Macy’s net income for the three months ended Jan. 31 rose to $507 million, or $1.84 per share, compared to $342 million, or $1.21 per share, in the same period a year ago. Adjusting for one-time items, including impairment and restructuring costs, the retailer reported earnings per share of $1.67.
Sales were down from $7.77 billion in the same quarter last year.
Macy’s is about two years into a three-year effort to strengthen its struggling namesake brand, pivot to the better-performing and more luxury-focused Bloomingdale’s and Bluemercury chains, and ramp up the business’s supply chain and technology operations. This turnaround strategy was spearheaded by Spring, who stepped into the company’s top tier nearly two years ago.
As part of its plan, Macy’s said it would close about 150 of its namesake stores, or more than a quarter, by early 2027.
Companywide comparable sales increased 1.8% in the fourth quarter including owned and licensed products and third-party marketplace.
In the fourth quarter, comparable sales of Macy’s eponymous banner increased 0.4%. Including only stores Macy’s plans to keep open, comparable sales rose 0.6%. Comparable sales were up 9.9% for Bloomingdale’s and 1.3% for Bluemercury.
The company, led by Spring, has sought to address criticism that Macy’s stores carry stale products, are too understaffed and have disorganized shelves and displays that direct shoppers to competitors.
The company has pledged to invest in about 350 Macy’s stores that will remain open, while closing some of its namesake stores. It increased its staff, added new brands and sharpened its visual presentations across a growing number of locations.
At the 125 locations where it increased investment, sales outperformed the rest of the Macy’s chain, with comparable sales growth of 0.9%. The company said in a press release that it will expand this strategy to 75 additional stores, bringing the total to 200 “redesigned” stores.
Macy’s shares closed at $16.92 on Tuesday, bringing the company’s market value to $4.5 billion. As of Tuesday’s close, the company’s shares were up about 25% over the past year, outpacing the S&P 500’s gain of about 20% in the same period. But shares of Macy’s are down nearly 23% year to date.
