Macy's 14-Store Closings: A Tactical Catalyst After a Strong December

Macy's latest 14-store closures are a scheduled tactical move, not a reaction to poor results. The company is executing its "A Bold New Chapter" turnaround plan, which it unveiled in February 2024. That strategy committed Macy's to closing 150 underperforming stores by the end of 2026, about a third of its locations. This latest round, announced earlier this week, follows an earlier wave of 66 closures in 2025. The move is part of a deliberate portfolio trim to re-invest in other locations and focus resources on its strongest stores.

The immediate timeline is clear. Clearance sales at these 14 locations are expected to begin in mid-January and run for approximately 10 weeks. Most of the stores are scheduled to close during the first quarter of 2026. This creates a specific, near-term catalyst: a concentrated wave of markdowns across a dozen U.S. markets.

The key puzzle for investors is the timing. These closures come even as Macy's recently showed signs of sales momentum. In December, the company reported its strongest growth in more than three years. This sets up a classic event-driven tension: a planned, strategic reduction in footprint happening alongside a period of accelerating top-line performance. The closures are a bet that streamlining the physical network will amplify that growth, not a sign of weakness.

The List: All 14 Locations for Immediate Reference

For investors assessing the geographic footprint and competitive impact, here is the complete list of the 14 stores set to close. The locations span 12 states, with a notable concentration in the Northeast and Midwest. The closures are scheduled for the first quarter of 2026, with clearance sales beginning in mid-January.

• California
  • La Mesa: Grossmont Center
  • Tracy: West Valley Mall
• Georgia
  • Atlanta: Northlake Mall
• Maryland
  • Glen Burnie: Marley Station Mall
• Michigan
  • Grandville: Rivertown Crossings
• Minnesota
  • Saint Cloud: Crossroads Center
• New Hampshire
  • Newington: Fox Run Mall
• New Jersey
  • Livingston: Livingston Mall
  • Ramsey: Interstate Shopping Center
• New York
  • Amherst: Boulevard Mall
• North Carolina
  • Raleigh: Triangle Town Center
• Pennsylvania
  • Tarentum: Galleria at Pittsburgh Mills
• Texas
  • Corpus Christi: La Palmera
• Washington
  • Tukwila: Budget House Clearance

This list provides a clear map of the planned reduction. The mix of suburban malls and regional centers suggests a focus on trimming lower-traffic, underperforming assets. The geographic spread also indicates the strategy is not a regional retreat but a nationwide portfolio optimization.

Financial Mechanics: Cost Savings vs. Clearance Drag

The core financial trade-off here is straightforward. Macy's expects to save on operating costs by exiting these 14 locations, but it will pay a price through clearance sales that will pressure its gross margin.

On the savings side, the company will permanently cut expenses for rent, utilities, and payroll at these sites. This is the direct benefit of its "Bold New Chapter" plan, which aims to re-invest in other locations. The scale of these savings isn't quantified in the announcement, but they are a key part of the long-term math for improving profitability.

The immediate drag comes from the clearance sales. The company has confirmed that these sales will begin in mid-January and run for approximately 10 weeks. To liquidate inventory quickly, Macy's will need to mark down prices significantly. This promotional activity directly eats into gross margin, a metric that already showed pressure in the recent quarter. In Q3, gross margin declined 20 basis points to 39.4%, partly due to tariff costs. A wave of clearance sales across a dozen stores is likely to compound that headwind.

The primary risk, therefore, is a margin squeeze in the first quarter. While the cost savings are a future benefit, the clearance markdowns are a near-term cost. This creates a temporary dilution to profitability that investors must weigh against the strategic goal of a leaner, more efficient portfolio.

It's worth noting this is a rolling process. The company has already closed 66 stores in 2025 and had a list of 66 locations under consideration for closure. The current 14 are the latest batch in a deliberate, multi-year reduction. This systematic approach helps manage the impact, spreading the operational and financial adjustments over time rather than facing a single shock. Yet for the first quarter, the concentrated clearance sales at these 14 stores represent a specific, identifiable drag.

Valuation and Immediate Setup

The stock's recent performance sets the stage for a classic event-driven test. Shares have rallied 89.8% over the past 120 days, trading near its 52-week high. This surge reflects the market's optimism around the turnaround plan and the strong December sales momentum. Yet, the underlying fundamentals present a stark contrast. In the third quarter, despite a 3.2% comp sales gain, the company's net income plunged over 60% to $11 million. This disconnect between top-line growth and profitability is the core tension the market is pricing in.

The immediate catalyst is the planned clearance sales. The wave of markdowns across the 14 closed stores is a known near-term cost. It will pressure the gross margin that already declined 20 basis points last quarter. The key watchpoint for the first quarter is whether this clearance drag materially exceeds expectations, creating a margin shock that could pressure the stock despite the planned cost savings. The market has priced in the turnaround, but not the operational friction of a concentrated closure wave.

Viewed another way, the event may create a tactical mispricing. The stock's steep run-up has likely discounted the best-case scenario of the turnaround. Any stumble in Q1 profitability-driven by aggressive clearance sales-could trigger a sharp re-rating, especially given the stock's elevated valuation metrics like a forward P/E of 24.8. Conversely, if the company manages the clearance process efficiently and the cost savings from the closures begin to flow through, the stock could see a relief rally. The setup hinges on execution in the coming weeks.