Macy's posted its strongest fiscal first-quarter comparable sales performance in four years on Wednesday, as the legacy department store turnaround continues to show progress.
Led by the 200 so-called reimagined stores that Macy's has updated, comparable sales grew 3% overall during the quarter and 1.6% at its namesake brand.
At Bloomingdale's, comparable sales grew 10.2%, helped by a variety of fashion brands, a unique “fun factor” in the luxury landscape and the recent bankruptcy of rival Saks Fifth Avenue, CEO Tony Spring told CNBC in an interview.
“Does the disruption in the market help us? Of course,” he said. “Is that the main reason we're growing? No.”
Spring said better-than-expected sales and profitability led the company to raise its full guidance for the fiscal year after previously taking a cautious outlook.
It now expects net sales in 2026 to be between $21.5 billion and $21.75 billion, well above expectations of $21.59 billion, according to LSEG. It anticipates adjusted earnings per share to be between $2 and $2.20, up from a previous range of between $1.90 and $2.10 and well above expectations of $2.07 at the mid-to-high end, according to LSEG.
It now expects comparable sales to rise between 0.5% and 1.2% for the year, up from a previous outlook of a 0.5% drop to a 0.5% rise.
Macy's shares rose more than 2% in premarket trading on Wednesday.
Many retailers have reported strong growth during their first fiscal quarters in recent weeks due in part to higher-than-usual tax refunds. Some companies issued more cautious forecasts for the current quarter, fearing that less stimulus in the economy could lead to slower demand, especially as buyers pay more for gasoline because of the war in the Middle East.
Spring said tax refunds “definitely” helped during the first quarter, but they weren't the only reason Macy's grew. Most importantly, the same trends the company saw during the first quarter have continued so far in the second, he said.
“We increased our guidance on both sales and earnings for the remainder of the year to reflect the business trends we are seeing entering the second quarter, so we are very pleased with the second quarter to date and the breadth of categories that are performing,” Spring said. “I don't see any significant change in consumer focus toward our categories and our business across our three nameplates.”
He said consistent consumer behavior led Macy's to raise its outlook “despite macroeconomic and geopolitical uncertainty.”
Here's how department stores fared in their fiscal first quarter compared to what Wall Street anticipated, according to a survey of analysts by LSEG:
- Earnings per share: Adjusted 13 cents vs. expected 3 cents
- Revenue: $4.68 billion vs. $4.61 billion expected
The company's reported net income for the three months ended May 2 was $63 million, or 23 cents per share, compared with $38 million, or 13 cents per share, a year earlier. Adjusting for restructuring costs and other one-time charges, Macy's posted earnings per share of 13 cents.
Sales rose to $4.68 billion, up about 2% from $4.6 billion a year earlier.
Macy's is two years into a three-year turnaround that Spring has led since she took over as the retailer's CEO. It includes closing underperforming stores in dormant malls across the country and reinvesting in those it decided to keep open.
Those investments have included a focus on retail fundamentals, such as ensuring stores are sufficiently staffed, pleasant to spend time in, and stocked with items people actually want to buy.
“We're not doing fancy things, we're doing the things that make the biggest difference in the business,” Spring said. “We're really focused on the product, we're really focused on taking care of the customer, and I think the results show that when we do those two things consistently and don't get bored, we're relentless in our commitment and we get the results we're looking for.”
