Macy's proves Wall Street wrong again by growing sales, and the stock surges

By Tomi Kilgore

The Macy's Thanksgiving Day Parade is more than just a tradition, it helped boost sales of holiday products like perfumes, jewelry and handbags

Macy's stock was set to surge as, for the third straight quarter, comparable sales rose from a year ago. Analysts were expecting a decline.

Shares of Macy's surged in early Wednesday trading, after the department-store chain once again reported surprise growth in a key sales metric while beating expectations for profit.

Macy's (M) also provided a full-year sales outlook on the upbeat side, but a profit outlook was a bit disappointing. Macy's explained that it was "taking a prudent approach" to its guidance, given all the uncertainties surrounding the U.S. economy and overseas conflicts. The outlook also includes an expected "meaningful impact" from tariffs in the first quarter, but that should taper off as the year progresses.

The profit outlook didn't seem to bother investors, as Macy's has a long history of beating bottom-line expectations. The stock climbed 4.9% in recent midday trading, after closing Tuesday at a five-month low.

The results and outlook come as Wall Street has been skeptical of Macy's turnaround efforts, which included closing stores, selling off assets and revamping its management team. Through Tuesday, the stock had lost 14.5% in March, which put it on track for its worst monthly performance since it tumbled 26.3% in August 2023. The stock was headed for a four-month losing streak, in which it had dropped 24.3%.

That might explain why analysts had kept expecting year-over-year declines in comparable sales - or sales in stores open at least a year. Perhaps a third straight quarter of growth, enough to make it a trend, will start changing analysts' views.

For the fiscal fourth quarter to Jan. 31, comparable sales increased 1.8% from a year ago, compared with the average analyst estimate compiled by FactSet for a 0.9% decline. That follows 2.5% growth in the third quarter and a 0.8% rise in the second quarter, compared with expectations of 0.6% and 0.5% declines, respectively.

Macy's said each of its store brands - Macy's, Bloomingdale's and Bluemercury - contributed to comparable sales growth.

On the post-earnings call with analysts, CEO Tony Spring talked about how the Macy's Thanksgiving Day Parade also helped boost sales.

Spring said the 2025 parade drew more than 34 million viewers, a record, and had over 3 billion earned social-media impression, up 30% from last year.

"We leveraged the power of the parade into our retail offerings," Spring said, according to an AlphaSense transcript. "Holiday destination categories including fragrances, jewelry and handbags outperformed."

He said other highlights included women's contemporary denim, dresses and children's clothes.

Meanwhile, net sales showed signs of continued struggle, falling 1.7% to $7.64 billion. Although that beat the FactSet consensus of $7.51 billion, it marked the 15th straight quarter of year-over-year declines, according to FactSet data. But CFO Tom Edwards stressed that the latest quarter's net sales decline was solely because of store closures.

Adjusted earnings per share, which excludes nonrecurring items, fell to $1.67 from $1.80 but topped the FactSet consensus of $1.57. Macy's has now beaten bottom-line expectations for at least 22 straight quarters, according to available FactSet data back to November 2000.

Looking ahead, the company expects fiscal 2026 comparable sales to be down 0.5% to up 0.5%, surrounding the current FactSet consensus of 0.2% growth, while the net sales outlook of $21.4 billion to $21.65 billion was above expectations of $20.97 billion.

But for adjusted EPS, the company is projecting $1.90 to $2.10, which is below the current FactSet consensus of $2.20. CFO Edwards said the outlook includes a tariff impact of roughly 10 to 20 cents a share.

Macy's stock has dropped 19.5% this year, but has rallied 30.9% over the past 12 months. In comparison, the S&P 500 index SPX has slipped 2.4% in 2026 and climbed 18.9% the past year.

-Tomi Kilgore

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03-18-26 1150ET