Macy’s stock surged by 18% as department stores demonstrate signs of recovery. In light of ongoing tariff uncertainties, the company has raised its annual sales and profit expectations.
CEO Tony Spring initiated a restructuring plan last February, emphasizing the importance of the Bloomingdale and Bloomer Schley brands, while also investing in renovations for struggling locations, particularly the Shutter 150 stores.
“The early indicators from August are promising, especially regarding what customers are purchasing—it’s not just about discounts,” Spring mentioned during a call following the spring season.
“It’s tied to new arrivals and the back-to-school season. The outlook for early fall and winter products is looking really positive.”
Macy’s has adjusted its projected annual earnings per share to between $1.70 and $2.05, an increase from the earlier forecast of $1.60 to $2.00.
Additionally, the company raised its annual net sales prediction from $211.5 billion to $21.45 billion, changing it from an earlier range of $21.0 billion to $21.4 billion.
This does reflect heightened economic uncertainty, especially as other retailers maintain or lower their forecasts.
Interestingly, Macy’s has increased the anticipated impact of tariffs to between 40 and 60 basis points for the full year, whereas the initial estimate was 20 to 40 basis points.
According to Macy’s CFO Thomas Edwards, the company is implementing “surgical” price adjustments throughout its stores to mitigate tariff costs.
Analyst Suzy Davidkhanian from Emarketer described the increase in forecasts as “a bold move,” considering the crowded retail landscape and tightened budgets that are driving competition.
During the second quarter, Macy’s reported a comparable sales growth of 0.8%, marking the best performance over the past 12 quarters.
In a separate investment, Macy’s has revamped 125 stores, introducing a better product mix and increased staffing, which collectively achieved an ownership-based sales growth of 1.1%.
For Bloomingdale’s, the comparable sales growth stood at 3.6%, while Bluemercury experienced a 1.2% increase.
These premium brands tend to appeal to higher-income consumers and generally outperform Macy’s main brand.
Macy’s overall net sales reached $4.81 billion, with figures surpassing $4.74 billion according to data from LSEG.
Adjusted earnings were at 41 cents per share, which exceeded the forecast of 18 cents.
However, net income declined from $150 million a year ago, translating to 53 cents per share, dropping to 31 cents per share this time.
On a positive note, the company reported an increase in net revenues from its credit card operations, reaching $153 million.
