Net Income

Q1 2026: Turned positive at $38 million versus a loss of $70 million in Q4 2024 " "

The turnaround of over 200% is likely due to the elimination or reversal of prior one‐time charges and improved cost management, suggesting that structural or operational improvements implemented after Q4 2024 are beginning to positively impact bottom‐line performance. " "

Operating Cash Flow

Q1 2026: Negative $64 million compared to $1,147 million provided in Q4 2024 " "

The dramatic swing downward indicates that despite the improved net income, there were significant deteriorations in working capital management and other non-cash adjustments, which have adversely affected the actual cash generation from operations. " "

Cash, Cash Equivalents and Restricted Cash

Q1 2026: Fell to $935 million from $1,310 million at the end of Q4 2025 (≈29% decline) " "

The 29% decline in cash balances reflects the combined impact of the negative operating cash flow in Q1 2026 and potential outflows from investing or financing activities, which eroded the cash reserves that had built up in the previous period. " "

Depreciation and Amortization Expenses

Q1 2026: Reported at $219 million "

The recorded $219 million in D&A shows the material impact of prior capital investments now being expensed, which contributes to cash flow adjustments; this cost remains significant despite improvements in net income, thereby affecting overall operating cash dynamics. "

Net Sales

Q2 2026

$4.4 billion to $4.5 billion "

$4.65 billion to $4.75 billion "

raised

Macy's Inc. Comparable Sales

Q2 2026

Down 4.5% to down 2.5% "

Down 1.5% to up 0.5% "

raised

Core Adjusted EBITDA

Q2 2026

6.4% to 6.6% "

6% to 6.2% "

lowered

SG&A

Q2 2026

no prior guidance

Dollars expected to be roughly flat to last year "

no prior guidance

Adjusted EPS

Q2 2026

$0.12 to $0.15 "

$0.15 to $0.20 "

raised

Net Sales

FY 2026

$21 billion to $21.4 billion "

$21 billion to $21.4 billion "

no change

Macy's Inc. Comparable Sales

FY 2026

Down 2% to down 0.5% "

Down roughly 2% to down roughly 0.5% "

no change

Macy's Inc. Go-Forward Comps

FY 2026

Down roughly 2% to flat "

Down roughly 2% to flat "

no change

Other Revenue

FY 2026

$835 million to $845 million, up roughly 75 bp "

$815 million to $825 million, including credit card revenues of $620 million to $630 million "

lowered

Gross Margin

FY 2026

Expected to improve by 10 to 40 basis points "

Expected to be roughly 30 to 70 basis points below the comparable period; tariffs add 20–40 bp or $0.10 to $0.25 EPS "

lowered

SG&A

FY 2026

Down low single digits on a dollar basis; 100 bp higher "

Down low single digits on a dollar basis; 80 to 110 bp higher "

no change

Adjusted EBITDA

FY 2026

8.4% to 8.6% "

7.4% to 7.9% "

lowered

Core Adjusted EBITDA

FY 2026

8% to 8.2% "

7% to 7.5% "

lowered

Adjusted Diluted EPS

FY 2026

$2.05 to $2.25 "

$1.60 to $2.00 "

lowered

Capital Expenditures

FY 2026

Approximately $800 million "

Approximately $800 million "

no change

Store Transformation & Closures

Q4 2025, Q3 2025, and Q2 2025 emphasized the Bold New Chapter and First 50/Reimagined store initiatives, notable closure targets (e.g., 150 stores over multiple years) and asset sale gains. " " " " " " "

Q1 2026 focused on the Reimagine 125 initiative, improved comps in select stores, closure of 64 underperforming locations with asset monetization and efforts to recapture lost sales. " " " "

Consistent strategic focus: Store transformation and targeted closures remain central. There is cautious optimism as improved performance in key locations now counters earlier broad closure concerns.

Pricing Strategies & Tariff Mitigation

Q4 2025 discussed a shift toward private label pricing and insulation from tariffs with a case‐by‐case approach, while Q3 and Q2 2025 contained little detail on pricing adjustments or tariff issues. " "

Q1 2026 provided a detailed discussion on surgical price adjustments, selective price increases, vendor negotiations and actively reducing sourcing from China to mitigate tariffs. " " "

Heightened tactical focus: The current period shows a more granular approach to pricing and tariff mitigation, building on earlier strategies while addressing pricing challenges in a more proactive manner.

Consumer Demand & Spending Trends

Prior periods (Q4, Q3, Q2 2025) highlighted constrained consumer spending due to inflation and external pressures, along with a mix of promotional efforts and improved seasonal trends that provided cautious optimism. " " " " "

Q1 2026 noted that while consumers remain under pressure on discretionary spending, there is positive feedback to newness, improved presentation and strong performance in key categories like denim and fine jewelry. " " "

Persistent caution with selective strength: Consumer sentiment continues to be guarded, yet targeted initiatives (e.g. reimagined stores and category-specific improvements) are delivering modest headwinds and localized optimism.

Inventory Management & Newness

Earlier calls from Q4 2025, Q3 2025, and Q2 2025 discussed inventory challenges (e.g., higher inventory levels due to cost accounting shifts) balanced by improvements in newness and assortment quality. " " " " " " "

Q1 2026 emphasized a disciplined approach with lower year‐over‐year inventories (down 0.5%) and active management of newness through markdowns, vendor relationships and improved product flow across all nameplates. " " " " " "

Continued discipline with enhanced newness: The focus on balancing inventory levels with a steady stream of new products remains strong. There is a progressive improvement in product quality and assortment composition compared to earlier periods.

Macroeconomic Conditions & Inflationary Pressures

Q4 2025, Q3 2025, and Q2 2025 repeatedly mentioned external pressures such as inflation, tariffs, high food and housing costs, and interest rate concerns that affect consumer behavior and margin performance. " " " " " "

Q1 2026 acknowledged that despite easing factors like lower gas prices, ongoing consumer pressure remains due to rising non‐discretionary costs and uncertainty leading to demand pull-forward in areas like fine jewelry. " " "

Steady headwinds: Macroeconomic pressures continue to cast a cautiously pessimistic light over consumer behavior. The sentiment remains largely unchanged, demanding ongoing adaptive strategies to mitigate inflation and uncertainty.

Luxury Segment Performance & Exclusive Partnerships

In previous periods (Q4, Q3, and Q2 2025) the luxury segment was a focal point with mixed results—Q4 and Q3 showed strong comps and exclusive campaigns while Q2 noted slight declines counterbalanced by promising initiatives and immersive experiences. " " " " "

Q1 2026 reported robust performance, with Bloomingdale’s showing a 3.8% comparable sales increase, strong brand launches and Bluemercury posting 1.5% gains. Exclusive partnerships and special capsules were highlighted as drivers for market share expansion. " "

Strengthening momentum: The luxury segment is gaining traction with increased focus on exclusive partnerships and brand launches. The improved performance suggests a positive turnaround relative to earlier mixed signals, potentially driving future high-margin growth.

Margin Performance & Product Mix

Q4 2025 emphasized margin pressure from cost accounting conversions and inventory composition issues, while Q3 2025 noted product mix challenges from discounting and clearance sell-through. Q2 2025, however, reported significant margin improvement driven by disciplined pricing and a better product mix. " " " " "

Q1 2026 delivered a mixed picture: overall gross margin is flat with improvements in merchandise margin (up 40 basis points) partially offset by higher digital delivery costs, alongside a product mix that is showing early signs of improved performance across key categories. " " " " "

Balanced evolution: Ongoing adjustments in product mix and pricing continue to drive modest margin improvements. There is a dichotomy whereby favorable trends in new initiatives are counterbalanced by tariff and cost pressures, reflecting continued operational challenges.

Financial Stress & Credit Concerns

Q4 2025, Q3 2025, and Q2 2025 provided insights into a stable credit portfolio with effective credit card revenue strategies and controlled net credit losses, highlighting initiatives to boost card usage and maintain strong underwriting. " "

Q1 2026 did not explicitly mention financial stress or credit concerns, though there was indirect reference to strong credit performance through rising credit card revenue components. "

Reduced prominence: The omission of explicit discussion in Q1 2026 may suggest that financial stress and credit concerns have receded as a pressing issue, or become less newsworthy relative to other operational priorities.

Home Business Dynamics

Q4 2025 highlighted challenges due to interest rates, competitive pressures and the need for a home category refresh, while Q3 2025 and Q2 2025 mentioned initiatives such as private brand reinvention and improved holiday assortments to address weaknesses in the home category. " " "

Q1 2026 signaled improvement in big-ticket items and a strong performance in the mattress business at both Macy’s and Bloomingdale’s, indicating early signs of recovery in the home segment. "

Positive turnaround: There is a noticeable shift from earlier challenges to recovery signals in the home business, suggesting that strategic initiatives are beginning to generate tailwinds that could have a large future impact on this segment.