Macy's Lifts Full-Year Outlook as Bloomingdale's Posts an 11.3% Sales Jump

Macy's Inc. raised its full-year sales and profit forecasts on Thursday after a strong second quarter at its upscale Bloomingdale's and Bluemercury chains. It was the second time this year the department store operator has lifted its targets. Investors focused instead on a weaker near-term outlook, and the stock slipped.

The retailer now expects fiscal 2026 net sales of $21.68 billion to $21.83 billion, up from a previous range of $21.50 billion to $21.75 billion. It also raised its adjusted earnings forecast to $2.15 to $2.35 a share, from $2.00 to $2.20.

The results show a divided American shopper. Higher-income households are still spending on luxury clothing, beauty and accessories, while middle-market customers are more careful. For Macy's, that divide now runs straight through its own business.

A tale of two nameplates

Total sales rose 1.1% to $4.87 billion in the quarter, ahead of the roughly $4.83 billion analysts had expected. Comparable sales at the flagship Macy's brand also grew 1.1%.

Bloomingdale's did most of the work. Its comparable sales climbed 11.3%, and the chain posted its highest second-quarter revenue on record. Bluemercury, the company's beauty chain, grew revenue 6.2%.

Adjusted earnings came to 40 cents a share, a figure that leaves out tariff refunds. Macy's said it has received $116 million in refunded import duties, which it plans to put back into its turnaround. Importers have been recovering those payments since the Supreme Court struck down the emergency tariffs in February.

Chief Executive Tony Spring described a shift in what customers are putting in their bags. "Basics are selling a little bit slower and fashion is selling a little bit faster," he said. The company also pointed to strong demand for petite sizes, which it linked in part to the growing use of GLP-1 weight-loss drugs.

Why the stock fell anyway

The forecast for the current quarter disappointed. Macy's expects an adjusted loss of 19 to 23 cents a share in the third quarter, far wider than the loss of about 6 cents Wall Street had penciled in. Analysts put the gap down to heavier spending on stores as the overhaul picks up speed.

Shares fell as much as 4.7% before the opening bell, to about $20.50, and were still down roughly 3% after the guidance was digested. Investors weighed the softer quarter ahead against the higher annual targets.

The broader market offered no help. The S&P 500 closed lower for a fourth straight session on Thursday as oil prices jumped and Treasury yields climbed toward levels last seen in 2023.

The turnaround so far

Macy's is about two and a half years into its "Bold New Chapter" plan, which pairs store closures with investment in the locations it keeps. Around 200 Macy's stores have been refreshed so far, while underperforming stores are being shut.

The strategy leans on the luxury end of the company, where growth has been strongest, while trying to steady the namesake chain. A 1.1% comparable gain at Macy's-branded stores suggests that effort is holding up but not yet accelerating.

• Macy's brand: comparable sales up 1.1%.
• Bloomingdale's: comparable sales up 11.3%, a second-quarter revenue record.
• Bluemercury: revenue up 6.2%.
• Third quarter: adjusted loss of 19 to 23 cents a share expected.

What happens next

The next test is the holiday season, the most important stretch of the year for department stores. Retailers head into it with inflation still elevated, borrowing costs rising and wholesale prices up 5.4% from a year earlier, according to the Labor Department's August producer price report.

To land in the top half of its new range, Macy's will need Bloomingdale's momentum to hold and the namesake chain to keep gaining ground. Its third-quarter results will show whether the heavier investment is starting to pay off.

Image: Arild Vågen via Wikimedia Commons, CC BY-SA 4.0