TLDR
- Macy’s delivered Q4 adjusted EPS of $1.67, surpassing Wall Street’s $1.57 projection
- Revenue reached $7.64 billion, declining 1.7% annually while exceeding the $7.62 billion forecast
- Comparable-store sales climbed 1.8%, significantly outperforming the anticipated 0.9% drop
- Shares soared 9% during premarket hours Wednesday, recovering from a 23% year-to-date decline
- Full-year EPS projection of $1.90–$2.10 trails the $2.20 analyst consensus
Macy’s (M) delivered fourth-quarter results that exceeded analyst projections on Wednesday, propelling shares 9% higher in premarket action following a challenging year.
The retail giant announced adjusted Q4 earnings reaching $1.67 per share, topping the $1.57 Wall Street consensus. Revenue totaled $7.64 billion, marking a 1.7% yearly decrease while surpassing the anticipated $7.62 billion.
The revenue dip stemmed primarily from deliberate store closures executed during the previous fiscal year. Adjusting for these closures reveals a more favorable operational picture.
Comparable-store sales — a critical retail benchmark measuring locations open beyond one year — climbed 1.8%. This performance exceeded the projected 0.9% decline analysts anticipated and represented one of the quarter’s standout achievements.
CEO Tony Spring’s “Bold New Chapter” strategy reached its second year, with the organization maintaining its focus on attracting upscale consumers. This strategic pivot appeared in the brand performance data: the flagship Macy’s nameplate registered comparable sales growth of just 0.4%, while Bloomingdale’s surged 8.5% and Bluemercury contributed 2.5% growth.
Shares had fallen 23% prior to the earnings release, amplifying the impact of the positive results.
Guidance Falls Short
For fiscal 2026, Macy’s projected net sales between $21.4 billion and $21.7 billion, with adjusted EPS ranging from $1.90 to $2.10. Analysts had anticipated $21.42 billion in sales and $2.20 in EPS.
The sales projection brackets the consensus figure. The earnings forecast misses analyst expectations at both the midpoint and upper boundary.
Management emphasized a “prudent approach” to forecasting, acknowledging macroeconomic and geopolitical uncertainties. Consumer spending continues facing challenges, especially among budget-conscious shoppers navigating persistent inflation.
Store closures will likely reduce sales by approximately $145 million this year. While anticipated, this factor remains a drag on performance.
Tariff Impact Flagged for Q1
Tariff pressures represent another concern commanding Macy’s attention. The retailer maintains substantial sourcing operations in China and indicated that import duties will pressure margins most significantly during the first quarter of 2026 — representing the peak impact period.
Macy’s anticipates tariff pressure will diminish during the year’s second half. This perspective aligns with several competing retailers, including Walmart and Kohl’s, which have similarly issued conservative full-year projections.
A Supreme Court decision has established a uniform 10% tariff, though companies that acquired inventory at elevated rates continue facing near-term cost challenges as existing stock cycles through their systems.
Retailers maintaining China exposure remain focused on Q1 performance. For Macy’s, this translates to a more challenging first half before — assuming their forecast proves accurate — conditions improve later in the year.
The Q4 results provided investors with encouraging data points. Comparable-store sales advanced 0.4% for the Macy’s brand, 8.5% at Bloomingdale’s, and 2.5% at Bluemercury.
