Macys 2026 Q2 Earnings Declining Net Income Amid Strong Price Action

Macy's (M) reported its fiscal 2026 Q2 earnings on September 3, 2025. The results reflect a challenging environment for the retail giant, with net income declining significantly year-over-year. However, the company provided updated guidance and highlighted progress in key areas like e-commerce and customer satisfaction.

Macy's reported a 42.0% decline in net income to $87 million for the second quarter of 2026, down from $150 million in the same period of 2025. The company also saw its EPS fall by 40.7% to $0.32, compared to $0.54 in the prior year. Despite these financial declines, the company managed to exceed adjusted earnings guidance, signaling some level of resilience.

Revenue
The company’s total revenue dropped by 2.5% to $4.81 billion in 2026 Q2, compared to $4.94 billion in the same period the previous year. Net sales accounted for the largest portion of revenue at $4.81 billion. Complementing this were credit card revenues of $153 million, while other revenue, including Macy’s Media Network, contributed $187 million and $34 million, respectively.

Earnings/Net Income
The sharp decline in both net income and EPS highlights the ongoing pressure on the company’s bottom line. With EPS falling 40.7% year-over-year, the earnings performance reflects the challenges of maintaining profitability in a competitive retail environment.

Price Action
Despite the earnings shortfall, Macy’s stock saw significant post-earnings momentum, with a 5.51% increase on the latest trading day, a 21.86% surge during the most recent full trading week, and a 31.72% rise month-to-date.

Post-Earnings Price Action Review
Chairman and CEO Tony Spring highlighted a strong second-quarter performance, with a 1.9% comp sales increase and adjusted EPS of $0.41, surpassing expectations. He attributed the success to enhanced omni-channel experiences, curated product offerings, and strategic brand partnerships, which contributed to the company’s highest Net Promoter Score in 12 quarters. Macy’s is also reimagining its store footprint, expanding luxury brand offerings through Bloomingdale’s and Blue Mercury, and optimizing operations for greater agility. Despite ongoing challenges like tariff pressures, management expressed cautious optimism about the fall season and long-term growth.

Guidance
For 2026, Macy’s forecasts net sales between $21.15 billion and $21.45 billion, with comp sales expected to decline by 1.5% to 0.5%. Adjusted EPS is projected to range between $1.70 and $2.05, with a 40-60 basis point negative impact from tariffs on gross margin. Core adjusted EBITDA is expected to fall between 7.0% and 7.5% of total revenue, while SG&A expenses are anticipated to decrease in the second half of the year. The company plans to reinvest savings from store closures and distribution center optimization into growth initiatives.

Additional News
Over the three-week period from September 3, 2025, Macy’s remained relatively quiet on the corporate front, with no major mergers or acquisitions reported. The company also did not announce any changes at the C-level executive level, maintaining its current leadership structure. Additionally, there were no new dividend or stock buyback initiatives disclosed during the period. While the focus remained on operational efficiency and strategic reinvestment, no significant corporate restructuring or shareholder return programs were introduced. This suggests that the company’s near-term priorities are centered on execution of its existing strategies and navigating macroeconomic headwinds.