Macy’s stock jumps 7% on earnings beat as sales surprise, outlook mixed

Shares of Macy’s surged on Wednesday after the department store chain reported stronger-than-expected fourth-quarter results, driven by improving comparable sales and resilient higher-income shoppers, even as its forward outlook reflected macroeconomic caution.

The stock rose more than 7% in trading after the company posted adjusted earnings per share of $1.67 for the fiscal fourth quarter, beating analyst expectations of $1.57, according to FactSet.

Revenue declined 1.7% year over year to $7.6 billion but still came in ahead of consensus estimates of $7.5 billion.

Comparable sales growth signals turnaround progress

A key highlight of the report was Macy’s continued strength in comparable sales, which rose 1.8% during the quarter, defying analyst expectations for a 0.9% decline.

The performance marked the third consecutive quarter of positive comparable sales growth, suggesting a potential shift in momentum for the retailer.

Sales growth was broad-based across the company’s portfolio, with Macy’s, Bloomingdale’s, and Bluemercury all contributing to the improvement.

The results come as the company continues to execute its “Bold New Chapter Strategy” under CEO Tony Spring, which includes store closures, asset sales, and operational restructuring aimed at revitalizing the business.

Despite the positive trend in comparable sales, total revenue continues to reflect ongoing structural challenges.

The latest quarter marked Macy’s 15th consecutive period of year-over-year revenue declines, largely due to the closure of underperforming stores.

Guidance reflects caution amid macro and geopolitical risks

Looking ahead, Macy’s provided a mixed outlook for fiscal 2026, reflecting both operational progress and external uncertainties.

The company expects net sales in the range of $21.4 billion to $21.65 billion, slightly above analyst expectations of around $21 billion.

However, adjusted earnings per share are projected between $1.90 and $2.10, below the consensus estimate of $2.20.

Executives emphasized that the company is taking a cautious approach to guidance in light of macroeconomic and geopolitical risks, including tariffs and potential impacts on discretionary spending.

Macy’s said its guidance includes an estimated $145 million impact from store closures, as well as a “meaningful impact” from tariffs in the first half of the year that is expected to ease later.

The company also noted that its customer base, which skews toward higher-income shoppers, has shown greater resilience compared with lower-income consumers.

Macy’s said its business is performing well in the first quarter of the current fiscal year, supported by this relatively stable customer segment.

Investor sentiment improves despite ongoing challenges

The earnings report provided a boost to investor sentiment, particularly given recent weakness in the stock.

Prior to the results, Macy’s shares had fallen sharply, dropping more than 23% this year and heading toward a four-month losing streak.

Despite the recent decline, the stock has gained approximately 29% over the past 12 months, outperforming broader market trends.

Macy’s long-standing track record of beating earnings expectations has also helped support confidence.

The company has now exceeded bottom-line estimates for at least 22 consecutive quarters, according to FactSet data.

The latest results may begin to shift analyst sentiment, particularly after repeated expectations for declining comparable sales proved incorrect for a third straight quarter.

While the company continues to face structural headwinds, including declining overall revenue and macroeconomic uncertainty, the combination of improving sales trends and disciplined execution is offering some support to the turnaround narrative.