Global Finance News
03 Jun 2026, 17:00
Macy’s Raises Outlook After Strongest First Quarter in Four Years, but Shares Slip as Investors Eye Margin Pressures
Macy's (M) was slightly lower despite reporting better-than-expected first-quarter results and raising its full-year outlook, suggesting investors may be focusing on margin pressures and the uncertain consumer spending environment rather than the headline earnings beat.
The department store operator reported first-quarter net sales of $4.7 billion, up 1.8% year-over-year, while comparable sales increased 3.0%, marking the company's strongest first quarter in four years and its fifth consecutive quarter of results above expectations. Adjusted EPS of $0.13 also exceeded management's guidance.
A major bright spot was Bloomingdale's, which delivered a 10.2% comparable sales increase and achieved record first-quarter sales. Bluemercury continued its strong momentum with comparable sales growth of 6.4%, while Macy's core banner posted a solid 1.6% comparable sales gain. Management said its "Bold New Chapter" transformation strategy and Reimagine 200 store initiative are continuing to gain traction with customers.
The company also raised its full-year outlook. Macy's now expects fiscal 2026 net sales of $21.5 billion to $21.75 billion, compared with prior guidance of $21.4 billion to $21.65 billion. Comparable sales guidance was increased to growth of 0.5% to 1.2%, while adjusted EPS guidance was raised to $2.00-$2.20 from $1.90-$2.10 previously.
However, investors may be concerned about profitability trends. Gross margin declined 30 basis points to 38.9%, with tariffs accounting for the entire decline. Inventories also increased 3.6%, and management acknowledged that macroeconomic and geopolitical uncertainties could continue to affect discretionary consumer spending throughout the year.
Overall, the quarter was fundamentally strong, featuring accelerating sales growth, strong luxury performance, higher earnings guidance, ongoing share repurchases, and continued dividend payments. The stock's slight decline likely reflects profit-taking after recent gains and concerns that tariffs and consumer spending headwinds could limit further margin expansion despite improving sales trends.
Macy's (M) was slightly lower despite reporting better-than-expected first-quarter results and raising its full-year outlook, suggesting investors may be focusing on margin pressures and the uncertain consumer spending environment rather than the headline earnings beat.
The department store operator reported first-quarter net sales of $4.7 billion, up 1.8% year-over-year, while comparable sales increased 3.0%, marking the company's strongest first quarter in four years and its fifth consecutive quarter of results above expectations. Adjusted EPS of $0.13 also exceeded management's guidance.
A major bright spot was Bloomingdale's, which delivered a 10.2% comparable sales increase and achieved record first-quarter sales. Bluemercury continued its strong momentum with comparable sales growth of 6.4%, while Macy's core banner posted a solid 1.6% comparable sales gain. Management said its "Bold New Chapter" transformation strategy and Reimagine 200 store initiative are continuing to gain traction with customers.
The company also raised its full-year outlook. Macy's now expects fiscal 2026 net sales of $21.5 billion to $21.75 billion, compared with prior guidance of $21.4 billion to $21.65 billion. Comparable sales guidance was increased to growth of 0.5% to 1.2%, while adjusted EPS guidance was raised to $2.00-$2.20 from $1.90-$2.10 previously.
However, investors may be concerned about profitability trends. Gross margin declined 30 basis points to 38.9%, with tariffs accounting for the entire decline. Inventories also increased 3.6%, and management acknowledged that macroeconomic and geopolitical uncertainties could continue to affect discretionary consumer spending throughout the year.
Overall, the quarter was fundamentally strong, featuring accelerating sales growth, strong luxury performance, higher earnings guidance, ongoing share repurchases, and continued dividend payments. The stock's slight decline likely reflects profit-taking after recent gains and concerns that tariffs and consumer spending headwinds could limit further margin expansion despite improving sales trends.