Macys 2026 Q3 Earnings Sharp EPS Decline Amid Revenue Dip and Strategic Shifts

Macy’s fiscal 2026 Q3 results revealed mixed performance, with revenue narrowly below prior-year levels and earnings plummeting. The company exceeded Wall Street’s revenue expectations while raising full-year guidance, reflecting cautious optimism amid ongoing retail challenges.

Revenue

Macy’s total revenue for Q3 2026 fell 0.6% year-over-year to $4.71 billion, with net sales forming the bulk at $4.71 billion. Credit card revenues added $158 million, and the Macy’s Media Network contributed $42 million. Despite the slight revenue contraction, the company outperformed analyst forecasts, driven by strategic cost discipline and improved operational efficiency.

Earnings/Net Income

The earnings downturn was pronounced: EPS slumped 60% to $0.04, and net income dropped to $11 million, a 60.7% decline. The sharp contraction underscores the pressure from margin challenges and elevated costs, though management emphasized progress in executing cost-reduction initiatives.

Post-Earnings Price Action Review

A strategy of purchasing M shares post-positive earnings surprises and holding for 30 days yielded a 146.46% return, outperforming the 137.15% benchmark by 9.31%. The approach demonstrated zero maximum drawdown and a Sharpe ratio of 0.74, highlighting effective risk management despite market volatility.

CEO Commentary

CEO Antony Spring highlighted progress under the "Bold New Chapter" strategy, noting 2.5% same-store sales growth—the strongest in 13 quarters. He credited momentum at Go-Forward Macy’s, Bloomingdale’s, and Bluemercury, while acknowledging challenges like tariff impacts and shifting consumer behavior. The CEO emphasized disciplined capital allocation, including $1.2 billion in remaining buybacks.

Guidance

Macy’s raised full-year 2025 adjusted EPS guidance to $2–$2.20 and net sales to $21.48–$21.63 billion. Q4 guidance includes $7.35–$7.5 billion in sales and $1.35–$1.55 adjusted EPS, with core EBITDA margins pressured by 40–50 bps from tariffs. The company expects SG&A expenses to decline and remains optimistic about offsetting margin pressures through top-line growth.

Additional News

Macy’s announced a strategic shift toward smaller store formats and expanded online offerings to rekindle demand. The company also revised asset sale gains downward for Q4 and full-year 2025, citing $15–20 million and $60–65 million, respectively. CEO Tony Spring emphasized a "prudent" outlook, noting cautious consumer spending amid inflationary pressures. Meanwhile, shares gained ~34% year-to-date, reflecting investor confidence in the turnaround strategy.