Macy's, Inc. (M)·Q1 2026 Earnings Summary

Executive Summary

• Q1 2026 delivered above-plan results: net sales $4.60B and total revenue $4.79B; adjusted EPS of $0.16 beat company guidance ($0.12–$0.15) and consensus, while comps were better than expected across all nameplates .
• Macy’s maintained FY net sales guidance ($21.0–$21.4B) but lowered adjusted EBITDA margin and adjusted EPS ranges; management flagged tariff-related gross margin headwinds of 20–40 bps and a more competitive promotional backdrop .
• Nameplate performance: Bloomingdale’s +3.8% comps, Bluemercury +1.5%, Reimagine 125 outperformed broader Macy’s fleet; credit card revenues +32% YoY and inventories -0.5% YoY supported quality of earnings and balance sheet .
• Stock narrative catalysts: beat vs EPS and revenue estimates; continued execution of Bold New Chapter (omnichannel upgrades, marketplace/Backstage strength, luxury momentum); cautious tone on tariffs and promotions and lower full-year EPS/EBITDA guidance could temper multiple .

What Went Well and What Went Wrong

• What Went Well

  • Beat vs guidance and consensus: net sales exceeded internal range ($4.4–$4.5B) and adjusted EPS ($0.16) beat both guidance and Street; “Results benefited from better than expected omnichannel performance at each of our nameplates” .
  • Luxury and specialty momentum: Bloomingdale’s comps +3.8% and Bluemercury +1.5% with category strength and new brand launches; “there’s no question we are taking share” at Bloomingdale’s .
  • Operational progress and AI: improved in-store allocation and “leveraged generative AI to further modernize our supply chain” while inventories ended down 0.5% YoY .

• What Went Wrong

  • Macy’s comps still negative: Macy’s owned-plus-licensed-plus-marketplace comps -2.1%; Reimagine 125 still slightly negative (-0.8% O+L), though outperforming fleet .
  • Margin pressures and cautious guide: gross margin flat YoY at 39.2% but tariff impact expected at 20–40 bps; FY adjusted EBITDA and EPS ranges lowered vs March guidance .
  • Macro/tourism and promotions: international tourism hurt comps by ~30 bps; management assumes “promotional landscape intensifies” and a more choiceful consumer through year .

Financial Results

Values marked with * retrieved from S&P Global.

Segment and comps

KPIs and balance sheet

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We improved our in-store inventory allocation and leveraged generative AI to further modernize our supply chain.” — Tony Spring .
• “We estimate a combined tariff impact to Macy’s annual gross margin of roughly 20–40 basis points… It does not include a potential increase in tariffs from the EU or any other country.” — Tony Spring .
• “We are in a unique moment… This is our time to take advantage of the disruption in the market and capitalize on the opportunity to further build share of wallet across all of our nameplates.” — Tony Spring .
• “First quarter EPS of $0.16 exceeded our guidance range of $0.12–$0.15… Operating cash flow was an outflow of $64 million, and free cash flow was an outflow of $203 million.” — Adrian Mitchell .
• “For the second quarter, we expect net sales of $4.65–$4.75 billion… core adjusted EBITDA… 6%–6.2%… adjusted EPS of $0.15–$0.20.” — Adrian Mitchell .

Q&A Highlights

• Pricing/tariff strategy: Management emphasized surgical pricing, vendor discounts, and selective absorption; not broad-based increases; elasticity being monitored as tariffs flow through Q2 and beyond .
• Reimagine 125 trajectory: Negative but outperforming fleet; improving month over month; focus on staffing, presentation, local empowerment; potential expansion discussed later in year .
• SG&A and capital allocation: SG&A flat dollars YoY in Q1; continued “always-on” savings enable reinvestment; $101M buybacks resumed with $1.3B authorization remaining .
• Consumer/income cohorts: Consumer remains choiceful; higher-income tiers healthier; demand pulling forward in select categories (fine jewelry, big ticket) .
• Inventory planning: Maintain disciplined receipts and ability to chase; mitigate tariffs without overbuying; inventory-to-sales ratio prioritized .

Estimates Context

Values retrieved from S&P Global.

Key Takeaways for Investors

• Q1 print was clean: beat on adjusted EPS and total revenue; luxury momentum and omnichannel execution are key supports; Macy’s net sales and comps remain pressured but improving relative to guidance .
• Bold New Chapter execution continues to show traction (Backstage, Marketplace, Reimagine 125, digital/AI upgrades) and should support gradual comp/margin improvements as initiatives scale .
• Guidance reset lowers FY adjusted EPS and EBITDA margins; the maintained net sales outlook signals top-line confidence but acknowledges tariff/promotional headwinds; watch gross margin progression through Q2–Q4 .
• Tariffs are the swing factor: management’s mitigation actions reduce impact to 20–40 bps, but demand elasticity remains uncertain; expect more pricing selectivity and vendor negotiations .
• Credit card revenues and media network provide resilient “other revenue” tailwinds (+32% and +8% YoY), cushioning P&L volatility; continued asset monetization supports cash returns and reinvestment .
• Near-term trading: positive reaction to beats may be tempered by lowered FY profitability guidance and tariff commentary; focus on Q2 margin cadence and comp trajectory in Reimagine 125/luxury.
• Medium-term thesis: portfolio advantages (off-price to luxury), healthier balance sheet/liquidity, and scaling customer-experience investments support return to sustainable profitable growth once macro/tariff risks normalize .

Notes:

• Non-GAAP metrics and reconciliations provided in 8-K and press release; adjusted EPS $0.16 excludes impairment/restructuring, debt extinguishment; adjusted/core EBITDA exclude asset sale gains .
• International tourism and promotional intensity remain external headwinds; management is maintaining flexibility in inventory and pricing to protect margin dollars .