Macys Beats Estimates, Yet Shares Fall on Weak Guidance

Macy's reported fiscal 2027 Q2 earnings on Sep 10th, 2026. The department store operator posted adjusted earnings per share of $0.63, beating the analyst consensus of $0.35 by a significant margin. Revenue reached $4.9 billion, surpassing the $4.78 billion estimate. However, full-year revenue guidance fell short of expectations, with projections below the $21.82 billion consensus, causing shares to drop premarket despite the earnings beat.

Revenue

The total revenue of Macy's increased by 1.1% to $4.87 billion in 2027 Q2, up from $4.81 billion in 2026 Q2.

Earnings/Net Income

Macy's's EPS rose 100.0% to $0.64 in 2027 Q2 from $0.32 in 2026 Q2, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $169 million in 2027 Q2, marking 94.3% growth from $87 million in 2026 Q2. The robust EPS performance, driven by tariff refunds and sales momentum, indicates strong operational execution and margin expansion, reflecting a highly favorable financial outcome for the quarter.

Price Action

The stock price of Macy's has edged up 1.23% during the latest trading day, has tumbled 8.56% during the most recent full trading week, and has plummeted 17.67% month-to-date.

Post-Earnings Price Action Review

Macy's shares experienced a notable divergence between quarterly results and market reaction, falling 3.3% in premarket trading despite beating Wall Street estimates on both earnings and revenue. The decline was primarily driven by disappointing full-year revenue guidance, which came in below the $21.82 billion consensus estimate. While the company delivered strong comparable sales growth of 2.7% and adjusted EPS of $0.63, the lower revenue outlook offset investor enthusiasm. This negative sentiment is further reflected in the stock's recent performance, which has tumbled 8.56% over the most recent full trading week and plummeted 17.67% month-to-date, indicating broader concerns about near-term growth prospects despite the solid second-quarter execution.

CEO Commentary

Tony Spring, Chairman and CEO, highlighted strong Q2 performance with 2.7% comp sales growth, driven by the "A Bold New Chapter" strategy. He emphasized success across all nameplates, noting Bloomingdale’s 11.3% comp growth and Macy’s five consecutive quarters of positive comps. Strategic priorities include expanding the Reimagine 200 store program, enhancing brand curation with exclusive launches like Kiko Milano, and leveraging AI tools such as Ask Macy’s to improve customer discovery. Spring noted resilience among middle- and upper-income consumers and expressed confidence in future events, including the 100th Thanksgiving Day Parade. He viewed the tariff refunds as a balanced opportunity to reinvest in long-term growth while flowing some benefits to the bottom line, maintaining an optimistic tone regarding the durable foundation and sustained momentum of their customer-led initiatives.

Guidance

Macy’s raised full-year adjusted diluted EPS guidance to $2.15–$2.35, up from previous estimates, reflecting better Q2 results and tariff refund benefits. Full-year net sales are guided at $21.675–$21.825 billion, with comparable sales expected to grow 1.0%–1.5%. For Q3, net sales are projected at $4.65–$4.70 billion, with comparable sales ranging from -0.5% to +0.5% and adjusted diluted EPS between a loss of $0.19 and $0.23. Full-year gross margin is guided at 38.5%–38.7% of net sales, while SG&A is expected to increase 1.5%–2.25% year-over-year. Adjusted EBITDA margin is targeted at 7.8%–8.0% of total revenue, with interest expense estimated at roughly $90 million. The company anticipates a combined tariff and fuel headwind of 5–15 basis points for the full year.

Additional News

In leadership developments, Macy’s announced Alex Choueiri as the new CEO of Bluemercury, strengthening executive oversight across its portfolio. This appointment follows a quarter where Bluemercury delivered solid comparable sales growth, reinforcing the company’s multi-brand strategy. Management emphasized the successful execution of the "Bold New Chapter" initiative, highlighting double-digit comp growth at Bloomingdale’s and continued positive comps at Macy’s stores. The strategic focus remains on reinvesting tariff refund proceeds into long-term growth rather than immediate shareholder returns. By channeling these funds into store enhancements and brand curation, Macy’s aims to sustain momentum across its nameplates. The leadership transition at Bluemercury underscores a commitment to optimizing performance in the beauty sector, aligning with broader efforts to drive organic growth and improve customer engagement through exclusive launches and digital innovation.