Macy’s on Wednesday beat Wall Street’s sales expectations for the third quarter in a row and posted its strongest growth in more than three years as the company’s turnaround strategy showed signs of momentum.
The department store operator raised its full-year sales and earnings outlook after its better-than-expected fiscal third quarter. The retailer now expects adjusted earnings per share of between $2 and $2.20, up from its previous expectation of $1.70 to $2.05, and net sales of $21.48 billion to $21.63 billion, compared with its prior outlook of $21.15 billion and $21.45 billion.
Macy’s said it expects flat to roughly 0.5% comparable sales growth from the previous year. That compares with its previous expectations for a year-over-year decline of between 0.5% and 1.5%. The industry metric takes out one-time dynamics like store openings and closures, and Macy’s includes merchandise that it owns, items for brands that pay for space within its stores and its third-party online marketplace.
It marked the second consecutive quarter Macy’s raised its full-year sales and earnings outlook. The company had cut its full-year earnings outlook in May because of higher tariffs, more promotions and “some moderation” in discretionary spending.
Even so, the projected annual sales would represent a drop from year-ago net sales of $22.29 billion. Macy’s said about $700 million of that annual net sales decrease is due to the 64 stores it shuttered at the end of the last fiscal year, which ended Feb. 1, and in the early part of this fiscal year.
And Macy’s said in its news release that its outlook anticipates two challenging dynamics – selective spending by consumers and higher tariffs – will persist in the holiday quarter.
The company’s shares dropped nearly 5% in premarket trading Wednesday.
In an interview with CNBC, CEO Tony Spring said the company is taking a “prudent view” of the fourth quarter because it faces tough year-over-year comparisons and because it’s not sure how “aspirational customers,” those who like to shop at its stores but are more financially pressured, may spend during the season.
“We’re pleased with the fourth quarter to date, but we have a big holiday in front of us,” he said.
Spring said Macy’s department store model is an advantage during the gift-giving season because it offers a wide variety of merchandise and a range of prices, from off-price to luxury.
Here’s how the department store operator did during its fiscal third quarter compared with what Wall Street expected, based on a survey of analysts by LSEG:
- Earnings per share: 9 cents adjusted vs. an expected loss of 14 cents
- Revenue: $4.71 billion vs. $4.62 billion expected
Macy’s is trying to put up better and more consistent sales, particularly for its namesake brand. Macy’s department stores account for the majority of the New York City-based legacy retailer’s business, but their performance has lagged behind the company’s higher-end department store, Bloomingdale’s, and…
Read More: Macy’s (M) earnings Q3 2025
