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Macy's, Inc. (M)·Q4 2025 Earnings Summary

Executive Summary

  • Adjusted EPS of $1.80, above the company’s prior guidance range; GAAP EPS $1.21. Net sales were $7.77B, near the low end of the $7.8–$8.0B range signaled in January, and comps turned positive on an owned-plus-licensed-plus-marketplace basis (+0.2%), the best in 11 quarters .
  • Gross margin rate fell 80 bps YoY to 35.7% (cost-accounting conversion and mix), while SG&A dollars declined but SG&A as a percent of total revenue rose 100 bps to 29.7% on lower revenue .
  • Luxury momentum continued: Bloomingdale’s comps +6.5% (O+L+M) and Bluemercury comps +6.2%; Macy’s First 50 stores posted a fourth straight quarter of positive comps (+1.2%) .
  • FY2025 guidance introduced (net sales $21.0–$21.4B; Adjusted EPS $2.05–$2.25; Core Adjusted EBITDA margin 8.0–8.2%), plus Q1 guide (net sales $4.4–$4.5B; Adjusted EPS $0.12–$0.15) amid macro/tariff uncertainty; intent to resume buybacks under $1.4B authorization; dividend raised 5% to $0.1824/sh .

What Went Well and What Went Wrong

What Went Well

  • Luxury nameplates accelerating: Bloomingdale’s delivered its strongest fourth-quarter volume with comps +6.5% (O+L+M) and Bluemercury posted its 16th consecutive quarter of positive comps (+6.2%) .
  • Macy’s First 50 stores and go-forward business outperformed, with First 50 comps +1.2% (O+L) and Macy’s, Inc. go-forward comps +0.6% (O+L+M); management will scale reimagined initiatives to 125 stores. “Our First 50 locations delivered four quarters of increased sales… we plan to scale initiatives that are resonating” — Tony Spring .
  • Adjusted EPS of $1.80 exceeded the prior guidance range, aided by better-than-expected SG&A, credit card revenues, improved shortage, and asset sale gains .

What Went Wrong

  • Core Macy’s nameplate softness: Macy’s net sales down 5.3%; comps -0.9% (O+L+M), with non-First 50 and non-go-forward locations underperforming .
  • Margin pressure: gross margin down 80 bps (cost-accounting conversion and product mix), and SG&A as percent of total revenue up 100 bps due to lower revenue despite disciplined cost control .
  • Credit card revenues fell $20M YoY in Q4 (to $175M), though management expects a return to growth in FY2025 as net credit losses stabilize and usage initiatives ramp .

Financial Results

Quarterly Financial Summary

MetricQ2 2024Q3 2024Q4 2025
Net Sales ($USD Billions)$4.94 $4.74 $7.77
Total Revenue ($USD Billions)$5.10 $4.90 $8.01
Gross Margin Rate (%)40.5% 39.6% 35.7%
SG&A as % of Total Revenue (%)38.7% 42.1% 29.7%
Operating Income ($USD Millions)$222 $64 $500
Operating Margin (%)4.4% 1.3% 6.2%
GAAP Diluted EPS ($)$0.53 $0.10 $1.21
Adjusted Diluted EPS ($)$0.53 $0.04 $1.80

Note: Q4 2025 quarter reported on a 13-week basis vs. Q4 2023 on a 14-week basis; comps reported on a 13-week basis for both periods .

Segment and Comps Performance

Segment/Comps (% change)Q2 2024Q3 2024Q4 2025
Macy’s comps (Owned)-4.5% -3.0% -1.9%
Macy’s comps (O+L+M)-3.6% -2.2% -0.9%
Bloomingdale’s comps (Owned)-1.1% +1.0% +4.8%
Bloomingdale’s comps (O+L+M)-1.4% +3.2% +6.5%
Bluemercury comps (Owned)+2.0% +3.3% +6.2%
First 50 locations comps (Owned)+0.8% +1.9% +0.8%
Macy’s go-forward comps (Owned)-4.3% -2.6% -1.6%
Macy’s, Inc. comps (O+L+M)-3.3% -1.3% +0.2%

KPIs and Balance Sheet

KPIQ2 2024Q3 2024Q4 2025
Credit Card Revenues, net ($MM)$125 $120 $175
Macy’s Media Network Revenue, net ($MM)$34 $41 $64
Merchandise Inventories YoY (%)+6.0% +3.9% +2.5%
Cash & Cash Equivalents ($MM)$646 $315 $1,306
Total Debt ($MM)$2,993 ~$2,900 $2,800
Free Cash Flow ($MM)——$679 (FY24)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($B)FY2025N/A$21.0–$21.4 New
Comparable O+L+M Sales (%)FY2025N/ADown ~2.0% to down ~0.5% New
Go-forward O+L+M Sales (%)FY2025N/ADown ~2.0% to ~flat New
Adjusted EBITDA (% of total revenue)FY2025N/A8.4%–8.6% New
Core Adjusted EBITDA (% of total revenue)FY2025N/A8.0%–8.2% New
Adjusted Diluted EPS ($)FY2025N/A$2.05–$2.25 New
Net Sales ($B)Q1 2025N/A$4.4–$4.5 New
Macy’s, Inc. comps (%)Q1 2025N/ADown 4.5% to down 2.5% New
Core Adjusted EBITDA (% of total revenue)Q1 2025N/A6.4%–6.6% New
Adjusted EPS ($)Q1 2025N/A$0.12–$0.15 New
Dividend per share ($)QuarterlyN/A$0.1824 (raised 5%) Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2025)Trend
Luxury momentumBloomingdale’s comps -1.1% (Q2) turned +1.0% (Q3); Bluemercury +2.0% (Q2), +3.3% (Q3) Bloomingdale’s +6.5% (O+L+M) record; Bluemercury +6.2% Accelerating
First 50/Reimagine storesFirst 50 comps +0.8% (Q2), +1.9% (Q3) First 50 +1.2%; scaled to 125 reimagined stores Scaling
Digital/supply chainGross margin aided by lower shipped volume (Q2); fulfillment efficiencies offset margin declines (Q3) Faster delivery and replenishment; automation facility on track mid-2025 Operational improvement
Inventory disciplineQ2: Inventories +6%; Q3: +3.9% (cost accounting half of increase) Inventories +2.5% YoY; more newness, less aged Improving mix
Tariffs/macroPromotional environment and discriminating consumer noted in Q2 guide Cautious outlook; Q1 pressure; tariff uncertainty highlighted Ongoing headwind
Credit card revenuesQ2 +$5M YoY; Q3 -$22M YoY Q4 $175M; stabilization expected and initiatives to boost usage in 2025 Stabilizing
Marketing/NBC rightsn/a10-year NBCUniversal rights deal; leverages Parade/Fireworks reach Strategic content tailwind
Private brandsQ2: assortment evolution ongoing Private label reimagination; home brand refresh mid-2025 Underway

Management Commentary

  • “As we enter the second year of our strategy, we plan to scale initiatives that are resonating with our customers to drive long-term profitable growth and further unlock shareholder value.” — Tony Spring .
  • “Fourth quarter adjusted EPS of $1.80 was above our most recent guidance range, primarily due to better-than-expected SG&A, credit card revenues and to a lesser extent, improved shortage and asset sale gains.” — Tony Spring .
  • “We remain committed to generating healthy free cash flow and returning capital to shareholders through share buybacks and predictable quarterly dividends.” — Adrian Mitchell .
  • “For the year, we expect Macy’s, Inc. net sales of $21 billion to $21.4 billion… Adjusted diluted EPS of $2.05 to $2.25.” — Adrian Mitchell .
  • “Our 125 reimagined Macy’s locations represent 36% of the go-forward store base… we’re actively negotiating deals for the next tranche of non-go-forward closures.” — Tony Spring .

Q&A Highlights

  • Comps trajectory and scaling: Management emphasized confidence in strategy (125 reimagined locations) but caution on macro; go-forward comps outperform total comps; remaining untouched stores weigh on results .
  • SG&A and margins: SG&A savings from closures will be reinvested in customer experience; margin focus on assortment variety, reducing redundancy, disciplined inventory and faster replenishment .
  • Inventory/promotionality: Entered FY2025 with healthier inventories (more newness, less aged); promotional environment persists but inventory discipline supports full-price sell-throughs .
  • Private brands: Penetration at all-time low, viewed as a margin accretive opportunity; refreshed portfolio across >20 brands with home launching mid-2025 .
  • Store closures and monetization: Committed to ~150 closures by end of FY2026; monetization proceeds to fund growth and returns .
  • Credit trends: Stabilization in credit card revenues; initiatives to increase usage; no notable changes quarter-to-date .

Estimates Context

  • S&P Global Wall Street consensus estimates for Q4 2025 EPS and revenue were unavailable at time of analysis due to data-access limits; therefore, estimate comparisons are not included. Company results were benchmarked against management’s guidance, with Adjusted EPS beating the prior range and net sales tracking to the low end .

Key Takeaways for Investors

  • Q4 delivered a clear beat vs. company EPS guidance amid positive O+L+M comps and strong luxury performance; watch for continued outperformance from reimagined stores and nameplates in FY2025 .
  • Margin trajectory mixed: gross margin compression from cost-accounting conversion and mix, but inventory quality improved; SG&A rate elevated on lower revenue even as dollars fell .
  • FY2025 guide is prudent given macro/tariff uncertainty; Q1 guide embeds pressure with potential sequential improvement in Q2 (easier comp) and back-half benefits from scaled initiatives .
  • Capital allocation supportive: dividend raised 5% and buybacks to resume under $1.4B authorization, backed by $1.3B year-end cash and $679M FY24 FCF .
  • Strategic content/brand activation via NBCUniversal 10-year rights deal provides marketing reach and potential monetization tailwinds (Parade/Fireworks viewership records) .
  • Credit card revenue stabilization and usage initiatives could provide incremental “Other revenue” tailwinds in FY2025; monitor net credit losses and portfolio health .
  • Trading lens: Near-term, EPS beat and capital returns are supportive; medium-term thesis hinges on scaling store/digital improvements, luxury growth, and managing tariffs/mix to protect margin and comps .