Sign in
MI

Macy's, Inc. (M)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 2026 beat on both top and bottom line: total revenue $4.999B vs consensus ~$4.702B, GAAP EPS $0.31 vs consensus ~$0.19; adjusted EPS $0.41, above guidance, driven by comps growth and disciplined SG&A . Consensus values marked with an asterisk; Values retrieved from S&P Global.*
  • Gross margin rate contracted 80 bps YoY to 39.7% on proactive markdowns of early spring inventory and flow-through of product bought under prior tariff rates; SG&A dollars fell $29M, but rose 20 bps as a percent of revenue due to lower net sales .
  • Nameplate performance was mixed: Macy’s comps +1.2% (O+L+M) with go-forward stores +1.5%; Bloomingdale’s comps +5.7% (O+L+M); Bluemercury comps +1.2% .
  • Guidance raised: FY net sales to $21.15–$21.45B (from $21.0–$21.4B) and adjusted EPS to $1.70–$2.05 (from $1.60–$2.00); tariff impact on gross margin increased to 40–60 bps from 20–40 bps .
  • Balance sheet actions extended maturities and reduced net long-term debt ~$340M; cash $829M, total debt $2.6B at quarter end; dividend declared ($0.1824/sh) and buybacks resumed ($50M in Q2) .

What Went Well and What Went Wrong

What Went Well

  • Strongest comps in 12 quarters across the enterprise; go-forward business comps +2.2% (O+L+M), with Reimagine 125 stores outperforming broader fleet. “Our performance highlights the advantages of being a multi-brand, multi-category, omni-channel retailer.” — Tony Spring .
  • Luxury momentum: Bloomingdale’s net sales +4.6%, comps +5.7% (O+L+M) with record second-quarter NPS; Bluemercury delivered its 18th consecutive positive comps quarter (+1.2%) .
  • Credit card revenues +$28M YoY to $153M on healthy credit portfolio and prudent management of net losses; other revenue +18% YoY to $187M .

What Went Wrong

  • Gross margin rate down 80 bps YoY to 39.7% on proactive markdowns and tariff pass-through; adjusted EBITDA margin down to 7.9% (from 8.6%) .
  • Net sales decreased 2.5% YoY to $4.812B, reflecting impact of store closures (~$170M YoY headwind) despite positive comps at nameplates .
  • Tariff headwinds increased: management now embeds 40–60 bps gross margin impact for FY (prior 20–40 bps), implying ~$0.25–$0.40 EPS drag vs prior $0.10–$0.25; majority of incremental impact expected in Q4 .

Financial Results

Performance vs prior periods

MetricQ2 2025 (oldest)Q1 2026Q2 2026 (newest)
Total Revenue ($USD Billions)$5.096 $4.794 (Net sales $4.600 + Other revenue $0.194 )$4.999
Net Sales ($USD Billions)$4.937 $4.600 $4.812
GAAP Diluted EPS ($)$0.53 $0.16 $0.31
Adjusted Diluted EPS ($)$0.53 $0.16 $0.41
Gross Margin Rate (%)40.5% 39.2% 39.7%
SG&A as % of Total Revenue38.7% 39.9% 38.9%
Adjusted EBITDA Margin (%)8.6% 6.8% 7.9%

Q2 2026 vs Wall Street consensus (S&P Global)

MetricConsensus*Actual
Total Revenue ($USD Billions)$4.702*$4.999
GAAP EPS ($)$0.19*$0.31
Number of Estimates (EPS/Revenue)13 / 6*—

Values retrieved from S&P Global.*

Segment and comps breakdown (Q2 2026)

SegmentNet Sales YoYComps OwnedComps O+L+M
Macy’s-3.8% +0.4% +1.2%
Macy’s go-forward—+0.7% +1.5%
Reimagine 125 (Macy’s)—+1.1% +1.4% (O+L)
Bloomingdale’s+4.6% +3.6% +5.7%
Bluemercury+3.3% +1.2% —

KPIs and revenue composition (Q2 2026)

KPIQ2 2025Q2 2026
Other Revenue ($USD Millions)$159 $187
Credit Card Net Revenues ($USD Millions)$125 $153
Macy’s Media Network ($USD Millions)$34 $34
Merchandise Inventories ($USD Billions)$4.378 $4.342 (−0.8% YoY)
Asset Sale Gains ($USD Millions)$36 $16
Free Cash Flow (YTD, $USD Millions)$137 (H1 2024) $255 operating cash flow YTD; FCF outflow $13 (management commentary)

Guidance Changes

MetricPeriodPrevious Guidance (May 28, 2025)Current Guidance (Sep 3, 2025)Change
Net Sales ($B)FY 2025$21.0–$21.4 $21.15–$21.45 Raised
Comps (O+L+M)FY 2025Down ~2.0% to down ~0.5% Down ~1.5% to down ~0.5% Raised (narrowed)
Go-forward Comps (O+L+M)FY 2025Down ~2.0% to ~flat Down ~1.5% to ~flat Raised (narrowed)
Adjusted EBITDA (% of Total Rev)FY 20257.4%–7.9% 7.4%–7.9% Maintained
Core Adjusted EBITDA (% of Total Rev)FY 20257.0%–7.5% 7.0%–7.5% Maintained
Adjusted EPS ($)FY 2025$1.60–$2.00 $1.70–$2.05 Raised
Other Revenue ($M)FY 2025$815–$825 $840–$850 Raised
Credit Card Revenues ($M)FY 2025$620–$630 $635–$645 Raised
Gross Margin vs LY (bps)FY 2025Down ~30–70 bps Down ~60–100 bps Lowered (more negative)
Tariff Impact (bps/EPS)FY 202520–40 bps; $0.10–$0.25 40–60 bps; $0.25–$0.40 Increased
Interest Expense ($M)FY 2025—~$100 New
Net Sales ($B)Q3 2025—$4.5–$4.6 New quarterly guide
CompsQ3 2025—Down ~1.5% to up ~0.5% New quarterly guide
Core Adjusted EBITDA (% of Total Rev)Q3 2025—3.3%–3.7% New quarterly guide
Adjusted EPS ($)Q3 2025—Loss $(0.20)–$(0.15), incl. ~$20M asset sale gains New quarterly guide
DividendFY 2025$0.18/qtr typical$0.1824 per share declared Aug 22, payable Oct 1 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2025)Previous Mentions (Q1 2026)Current Period (Q2 2026)Trend
AI/Technology & Supply ChainAutomation and new 1.4M sq ft distribution center to open mid-2025; delivery speed and replenishment improved Leveraged generative AI to modernize supply chain; improved inventory allocation Simplify/modernize end-to-end operations, automation and efficiency; ongoing savings pipeline Improving execution
Tariffs/MacroCautious outlook; no Q1 tariff impact expected; competitive promo environment Combined tariff impact estimated at 20–40 bps; surgical pricing; vendor renegotiations Tariff impact increased to 40–60 bps; majority of incremental impact expected in Q4; surgical pricing and mitigation Headwinds intensified
Product & Category PerformanceReady-to-wear, beauty, women’s shoes strong; home pressured; luxury strong Women’s contemporary/career, men’s tailored, fine jewelry/watches; Marketplace/Backstage momentum Broad-based strength in apparel and center core; luxury strong; unit demand softer amid pricing Broad-based with mix shifts
Private BrandsReimagination underway; opportunity to rebuild penetration and margins Continued reimagination; home refresh; partnerships (INC 40th, On 34th) Opportunity for margin expansion; penetration below historical; catalysts in home and apparel Structural tailwind
Customer & NPSRecord NPS at Macy’s/Bloomingdale’s; store closures and investments improved experience NPS improved; go-forward stores outperform; affluent customer resilience Strongest second-quarter NPS on record; R125 NPS even stronger Improving sentiment
Credit Card & MMNStabilizing credit revenues; MMN growth Credit revenues +$37M; MMN +8% YoY Credit revenues +$28M; MMN flat; FY credit guide raised Credit improving

Management Commentary

  • “Our strongest comparable sales growth in 12 quarters… gives us further confidence that our Bold New Chapter initiatives can drive sustainable, long-term profitable growth.” — Tony Spring, CEO .
  • “Adjusted EPS of $0.41 was above our guidance… reflecting comparable sales growth, disciplined expense controls, and tariff mitigation actions.” — Tony Spring .
  • “SG&A expense of $1.9B declined $29M… partially offset by investments in the go-forward business, including Reimagine 125 and Bloomingdale’s.” — 8-K .
  • “We recently completed financing transactions… net long-term debt reduced by ~$340M; no meaningful maturities until 2030.” — Tom Edwards, CFO .

Q&A Highlights

  • Consumer tone: “Choiceful but resilient”; strong July and back-to-school start; cautious guidance given tariff uncertainty .
  • Tariffs/pricing: Surgical price increases; vendor discounts, shared cost negotiations; tariff impact raised to 40–60 bps with majority hitting Q4 .
  • Reimagine 125: Both first 50 and next 75 delivered positive comps; local empowerment, staffing, and visual storytelling driving NPS and AOV .
  • Luxury share gains: Bloomingdale’s taking share across categories; collaborations and format expansion (Bloomies/outlets) .
  • SG&A leverage: Always-on savings enable reinvestment; FY SG&A dollars guided down while continuing growth investments .

Estimates Context

  • Q2 2026 results materially beat consensus on revenue and EPS; consensus EPS ~$0.19 vs actual $0.31; consensus revenue ~$$4.70B vs actual $4.999B. Number of estimates: EPS 13; Revenue 6.*
  • Prior quarter (Q1 2026) also exceeded: EPS ~$0.15 vs $0.16; revenue ~$4.43B vs $4.79B.*
  • Implication: Street may need to revise FY EPS upward within raised company range ($1.70–$2.05), while reflecting increased tariff drag (40–60 bps) and Q4-weighted impact .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Beat-and-raise quarter: Broad-based comps strength and tighter expense control drove upside; FY guide raised on sales and adjusted EPS despite heightened tariff headwinds .
  • Mix shift benefits: Luxury (Bloomingdale’s/Bluemercury) continues to outpace; go-forward Macy’s and R125 outperform, supporting margin recovery potential as private brand penetration rebuilds .
  • Near-term margin pressure: Gross margin contracted 80 bps YoY and tariff impact increased to 40–60 bps; expect Q4 to bear majority of incremental tariff hit .
  • Balance sheet resilience: Maturities extended; net long-term debt reduced; continued shareholder returns via dividends and buybacks support capital flexibility .
  • Trading setup: Into Q3, guidance embeds cautious comps (down ~1.5% to up ~0.5%) and EPS loss, but momentum continues quarter-to-date; watch tariff mitigation, pricing elasticity, and holiday execution .
  • Estimate revisions: Expect upward EPS revisions toward company’s raised range; Street needs to incorporate higher tariff drag and stronger credit revenue outlook .
  • Medium-term thesis: Execution on Bold New Chapter—expansion of private brands, R125 rollout, luxury share gains, and end-to-end efficiencies—positions Macy’s for improved margins and sustainable growth post-tariff normalization .