Macy's has reported its fourth consecutive quarter of comparable sales growth, signaling that its strategic overhaul of merchandise and enhanced customer service initiatives are resonating with shoppers. The New York-based retailer subsequently raised its financial outlook, sending its shares up more than 3 percent in pre-market trading on Wednesday.
Strong Start to the Year
"We're off to a strong start to the year," stated CEO Tony Spring, who is in his third year spearheading a turnaround effort for the iconic department store chain. "We're operating with discipline and focusing on what matters most — our customers."
Comparable sales, encompassing both established online channels and physical stores, climbed 3 percent during the first quarter. This figure surpasses the 1.8 percent gain recorded in the final quarter of 2025 and represents the strongest first-quarter performance for such sales in four years, according to the company.
Luxury Brands Shine
Macy's stores saw a 1.6 percent comparable sales increase, while its luxury brand, Bloomingdale's, delivered a robust 10.2 percent rise, marking its highest first-quarter sales volume on record. Bluemercury, the cosmetics chain also under Macy's ownership, achieved a 6.4 percent comparable sales gain.
This latest positive indicator follows a prolonged period of sales decline for Macy's. Under Spring's leadership, which began in early 2024, the company has strategically closed unprofitable stores, invested millions in modernizing others, and significantly bolstered its customer service. Furthermore, Macy's has focused on differentiating its luxury offerings from competitors through exclusive merchandise.
Retail analysts have partly attributed Bloomingdale's exceptional performance to the Chapter 11 bankruptcy of Saks Global, the parent company of Saks Fifth Avenue and Neiman Marcus.
Navigating Economic Challenges
Despite these successes, Macy's continues to navigate the same challenges confronting the broader retail sector. US retailers have contended with an uncertain economic climate, grappling with tariffs introduced during the Donald Trump administration and the impact of surging gasoline prices exacerbated by the Iran war. The average price for a gallon of regular gasoline has remained above $4 since March, according to AAA, representing a 40 percent increase compared to pre-war levels. Recent earnings reports from major retailers underscore the increasing financial strain on shoppers, who are facing higher prices for fuel, groceries, utilities, and nearly all other goods.
In a phone call on Wednesday, Spring told The Associated Press that while the company is closely monitoring the uncertain US economic environment, there has been no noticeable reduction in customer spending since gas prices began to climb. He attributes this resilience to Macy's improved product assortment and perceived value. The company has observed strong sales in categories such as prom dresses, men's shoes, dresses, and fragrances. However, Spring noted disappointing furniture sales, indicating that consumers are still deferring purchases of big-ticket items.
"Despite the choiceful consumer, despite all the things that are going on that we read about every day in terms of the geopolitical, macroeconomic environment, fashion and newness and the consumer's desire to indulge is still happening," Spring told The AP. "And we're very pleased that we are taking share."
Spring further elaborated that higher-income shoppers continue to spend freely, buoyed by gains in the stock market, while middle-income consumers remain more selective. He acknowledged that lower-income customers continue to face difficulties but are focusing on Macy's designated areas for heavily discounted merchandise.
Financial Performance and Outlook
For the quarter ending May 2, Macy's reported a net income of $63 million, or 23 cents per share. Adjusted earnings per share was 13 cents, exceeding Wall Street's expectations by a dime, according to FactSet. This compares favorably to a $38 million profit, or 13 cents per share, in the same period last year. Net sales rose to $4.68 billion from $4.6 billion in the year-ago period, also surpassing Wall Street projections.
The company now anticipates annual net sales to be between $21.5 billion and $21.75 billion, an increase from its previous guidance of $1.90 to $2.10 per share. For the full fiscal year, analysts were expecting $2.09 per share on revenue of $21.6 billion, according to FactSet analysts.
