Company Reports

We believe Macy’s is struggling to stay relevant as consumers have many choices. The firm is in the process of closing about 150 of its lower-performing namesake stores as part of its Bold New Chapter plan. We think this downsizing is necessary as department stores have been losing market share to online stores and other retailers (outlets, branded stores, specialty stores, discounters) for at least 20 years. Macy’s strategy includes investments in continuing stores, smaller-format stores, cost reductions, supply chain investments, and luxury expansion. The firm is also building a media network to monetize its e-commerce traffic. Even so, due to store closures and a lack of consistent organic growth, we forecast that Macy’s revenue and operating margin will stay well below historical highs for the foreseeable future. We estimate its long-term operating margins at 4.5% on slightly negative annual revenue growth.

For the second quarter, Macy's posted 2.7% comparable sales growth on increases of 1.1% at its eponymous concept, 11.3% at Bloomingdale's, and 6.2% at Bluemercury. Excluding a tariff refund, adjusted earnings per share rose to $0.40 from $0.35 on sales growth and operating cost leverage.

We believe Macy’s is struggling to stay relevant as consumers have many choices. The firm is in the process of closing about 150 of its lower-performing namesake stores as part of its Bold New Chapter plan. We think this move is long overdue, as department stores have been losing market share to e-commerce and other retailers (outlets, branded stores, specialty stores, discounters) for at least 15 years. Macy’s strategy includes investments in continuing stores, smaller-format stores, cost reductions, supply chain investments, and luxury expansion. The firm is also building a media network to monetize its e-commerce traffic. Even so, due to store closures and a lack of consistent organic growth, we forecast that Macy’s revenue and operating margin will stay well below historical highs for the foreseeable future. We estimate its long-term operating margins at 4.5% on slightly negative annual revenue growth.

Macy's had 3% overall comparable sales growth in 2026's first quarter. Comparable sales rose 1.6%, 10.2%, and 6.4% at Macy's, Bloomingdale's, and Bluemercury, respectively. Gross margin on net sales slipped 30 basis points to 38.9% on higher tariffs while adjusted EBIT margin fell to 1.6% from 1.8%.

We believe Macy’s is struggling to stay relevant as consumers have many choices. The firm is in the process of closing about 150 of its lower-performing namesake stores as part of its Bold New Chapter plan. We think this move is long overdue, as department stores have been losing market share to e-commerce and other retailers (outlets, branded stores, specialty stores, discounters) for at least 15 years. Macy’s strategy includes investments in continuing stores, smaller-format stores, cost reductions, supply chain investments, and luxury expansion. The firm is also building a media network to monetize its e-commerce traffic. Even so, due to store closures and a lack of consistent organic growth, we forecast Macy’s revenue and operating margin will stay well below historical highs for the foreseeable future. We estimate its long-term operating margins at 4.6% on slightly negative annual revenue growth.

Led by Bloomingdale's 9.9% increase, Macy's total comparable sales grew 1.8% in 2025's fourth quarter. The firm's gross margin on net sales fell 50 basis points to 35.2% due to higher tariff expense, while its selling, general, and administrative expense margin rose 10 basis points to 29.8%.

We believe Macy’s is struggling to stay relevant as consumers have many choices. The firm is in the process of closing about 150 of its lower-performing stores as part of its Bold New Chapter plan. We think this move is long overdue, as department stores have been losing market share to e-commerce and other retailers (outlets, branded stores, specialty stores, discounters) for at least 15 years. Parts of the strategy include investments in continuing stores, smaller-format stores, cost reductions, supply chain investments, and luxury expansion. The firm is also building a media network to monetize its e-commerce traffic. Even so, due to store closures and a lack of consistent organic growth, we forecast Macy’s revenue and operating margin will stay well below historical highs for the foreseeable future. We estimate its long-term operating margins at 4.5% on slightly negative annual revenue growth.

Macy's achieved 2.5% (owned) same-store sales growth in the third quarter. Its gross margin fell 20 basis points to 39.4% (with 50 basis points of negative impact from tariffs), but its selling, general, and administrative expenses as a percentage of revenue improved by 90 basis points to 41.2%.

We believe Macy’s is struggling to stay relevant as consumers have many choices. The firm is in the process of closing about 150 of its lower-performing stores as part of its Bold New Chapter plan. We think this move is long overdue, as department stores have been losing market share to e-commerce and other retailers (outlets, branded stores, specialty stores, discounters) for at least 15 years. Parts of the strategy include investments in continuing stores, smaller-format stores, cost reductions, supply chain investments, and luxury expansion. The firm is also building a media network to monetize its e-commerce traffic. Even so, due to store closures and a lack of consistent organic growth, we forecast Macy’s revenue and operating margin will stay well below historical highs for the foreseeable future. We estimate its long-term operating margins at 4.6% on slightly negative annual revenue growth.

Macy's 0.8% owned comparable sales growth in 2025's second quarter was its best result in three years. Even so, its gross margin declined 80 basis points to 39.7% due to greater markdowns, while store investments pushed operating costs as a percentage of total revenue up 20 basis points to 38.9%.

We believe Macy’s is struggling to stay relevant as consumers have many choices. The firm is in the process of closing about 150 of its lower-performing stores as part of its Bold New Chapter plan. We think this move is long overdue, as department stores have been losing market share to e-commerce and other retailers (outlets, branded stores, specialty stores, discounters) for at least 15 years. Parts of the strategy include investments in continuing stores, smaller-format stores, cost reductions, supply chain investments, and luxury expansion. The firm is also building out a media network to monetize its e-commerce traffic. Even so, due to store closures and a lack of consistent organic growth, we forecast Macy’s revenue and operating margin will stay well below historical highs for the foreseeable future. We estimate its long-term operating margins at 4.5%-5% on slightly negative annual revenue growth.

Macy's first-quarter comparable sales on an owned basis fell 2%, as weakness at legacy stores offset a 1.3% decline at upgraded Macy's stores and growth at Bloomingdale's (3%) and Bluemercury (1.5%). Gross margin was flat at 39.2%, and adjusted EPS was $0.16, down from $0.27 a year ago.

We believe Macy’s is struggling to stay relevant as consumers have many choices. The firm is in the process of closing about 150 of its lower-performing stores as part of its Bold New Chapter plan. We think this move is long overdue, as department stores have been losing market share to e-commerce and other retailers (outlets, branded stores, specialty stores, discounters) for at least 15 years. Other parts of the new strategy include investments in continuing stores, new smaller-format stores, cost reductions, supply chain investments, and luxury expansion. The firm is also building out a media network to monetize its e-commerce traffic. Even so, due to store closures and a lack of consistent organic growth, we forecast Macy’s revenue and operating margin will stay well below historical highs for the foreseeable future. We estimate its long-term operating margins at 5.0%-5.5% on slightly negative annual revenue growth.

No-moat Macy’s met the fourth-quarter sales forecast that we revised downward after its Jan. 14 holiday sales update (see our note), but this result was overshadowed by uninspiring 2025 guidance. Specifically, the firm projects adjusted earnings per share of $2.05-$2.25 on an owned comparable sales decline of 0.5%-2% versus our respective estimates of $2.63 and flat. As such, we expect to lower our $25 per share fair value estimate by a low-single-digit percentage. Even so, we see opportunity in Macy’s shares and believe that positive sales trends at its “First 50,” Bloomingdale’s, and Bluemercury stores provide confidence in its “Bold New Chapter” strategy.

We believe Macy’s is struggling to stay relevant as consumers have many choices. The firm recently announced the closure of about 150 of its lower-performing stores over the next three years as part of its Bold New Chapter plan. We think this move is long overdue, as department stores have been losing market share to e-commerce and other retailers (outlets, branded stores, specialty stores, discounters) for at least 15 years. Other parts of the new strategy include investments in continuing stores, new smaller-format stores, cost reductions, supply chain investments, and luxury expansion. The firm is also building out a media network to monetize its e-commerce traffic. Even so, due to store closures and a lack of consistent organic growth, we forecast Macy’s revenue and operating margin will stay well below historical highs for the foreseeable future. We estimate its long-term operating margin at 5%-5.5% on annual revenue growth below 1%.

About a month after its third-quarter report, Macy’s reduced its outlook for fourth-quarter sales due to weak holiday results at its lowest-performing stores, many of which are set to be closed. With comparable sales roughly flat in the fourth quarter so far, the company is likely to miss our 1.4% same-store sales growth estimate for the full period ending January. More positively, Macy’s continues to post positive comparable sales trends at its “First 50” stores and at its Bloomingdale’s and Bluemercury subsidiaries. More consistency in terms of profitable growth in these segments is core to the company's Bold New Chapter strategy. Macy’s maintained its fourth-quarter adjusted earnings per share guidance of $1.40-$1.65, so we anticipate only a small reduction in our $1.53 forecast and do not expect to make any material change to our $25 fair value estimate.

We believe Macy’s is struggling to stay relevant as consumers have many choices. The firm recently announced the closure of about 150 of its lower-performing stores over the next three years as part of its Bold New Chapter plan. We think this move is long overdue as department stores have been losing market share to e-commerce and other retailers (outlets, branded stores, specialty stores, discounters) for at least 15 years. Other parts of the new strategy include investments in continuing stores, new smaller-format stores, cost reductions, supply chain investments, and luxury expansion. The firm is also building out a media network to monetize its e-commerce traffic. Even so, due to store closures and a lack of consistent organic growth, we forecast Macy’s revenue and operating margin will stay well below historical highs for the foreseeable future. We estimate long-term operating margin at 5%-5.5% on annual revenue growth below 1%.

After postponing its report due to the discovery of underreported expenses (see our Nov. 25 note), no-moat Macy's released full third-quarter sales and earnings that aligned with our expectations and the preliminary release. Providing confidence in its "Bold New Chapter" plan, the company reported positive comparable sales growth in its "First 50" stores and at its Bloomingdale's and Bluemercury subsidiaries. Although Macy's shares fell by a mid-single-digit percentage on Dec. 11 as its fourth-quarter profit guidance was disappointing due to a promotional holiday environment and weather issues, the effect on our valuation from this shortfall is immaterial. Thus, we do not expect to make any material change to our $25 per share fair value estimate, leaving shares as attractive.

No-moat Macy’s postponed its third-quarter earnings report to Dec. 11 from Nov. 26 after it discovered that its delivery expenses over the past three years had been underreported by a total of $132 million-$152 million. The firm claims that a former employee intentionally misstated these costs. Although disappointing, the problem appears to be contained and the cost discrepancies are immaterial considering that Macy’s annual operating expenses exceed $8 billion.

We believe no-moat Macy’s is struggling to stay relevant as consumers have many choices. The firm recently announced the closure of about 150 of its lower-performing stores over the next three years as part of its “A Bold New Chapter” plan. We think this move is long overdue as department stores have been losing market share to e-commerce and other retailers (outlets, branded stores, specialty stores, discounters) for at least 15 years. Other parts of the new strategy include investments in continuing stores, new smaller-format stores, cost reductions, supply chain investments, and luxury expansion. The firm is also building out a media network to monetize its e-commerce traffic. Even so, due to store closures and a lack of consistent organic growth, we forecast yearly sales and operating margins will stay well below historical highs for the foreseeable future. Specifically, we estimate long-term operating margins at 5%-5.5% on annual revenue growth below 1%.