Macy’s reported its best first-quarter comparable sales performance in four years on Wednesday, as the former department store’s turnaround continues to progress.
Thanks to the 200 so-called reimagined stores that Macy’s modernized, comparable sales rose 3% overall during the quarter and 1.6% for its namesake banner.
At Bloomingdale’s, comparable sales rose 10.2%, helped by an array of trendy 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.
“Is market disruption helpful to us? Of course,” he said. “Is this the main reason we grow? No.”
Spring said better-than-expected sales and profitability led the company to raise its guidance for the full fiscal year, after adopting a cautious outlook.
The company now expects its 2026 net revenue to be between $21.5 billion and $21.75 billion, well above expectations of $21.59 billion, according to LSEG. It expects 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 in the mid- and high-end segments, according to LSEG.
It now expects comparable sales to rise between 0.5% and 1.2% for the year, compared to a previous forecast of a 0.5% decline to a 0.5% increase.
Shares of Macy’s rose more than 2% in premarket trading Wednesday.
Many retailers have reported strong growth in their first fiscal quarters in recent weeks, thanks in part to higher-than-usual tax refunds. Some companies have issued more cautious forecasts for the current quarter, concerned that less stimulus in the economy could lead to a slowdown in 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 were not the only reason for Macy’s growth. Basically, the same trends the company saw in the first quarter have so far continued in the second, he said.
“We have raised our sales and earnings guidance for the remainder of the year to reflect the business trends we are seeing entering the second quarter, and we are very pleased with the second quarter to date and the breadth of categories performing,” Spring said. “We are not seeing any significant change in the consumer approach to our categories and our business across our three nameplates.”
He added that continued consumer behavior led Macy’s to raise its outlook “despite macroeconomic and geopolitical uncertainty.”
Here’s how the department store performed in its fiscal first quarter compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Earnings per share: 13 cents adjusted versus 3 cents expected
- Income: $4.68 billion versus $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. Taking into account restructuring costs and other one-time charges, Macy’s posted earnings per share of 13 cents.
Sales reached $4.68 billion, up about 2% from $4.60 billion a year earlier.
Macy’s began a three-year turnaround led by Spring about two years ago since he took over the retailer. This includes closing underperforming stores in dead malls across the country and reinvesting in those it has decided to keep open.
These investments have included a focus on the fundamentals of retailing, like ensuring stores are adequately staffed, pleasant to spend time in, and stocked with items people actually want to buy.
“We don’t do fancy things, we do what makes 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 we don’t get bored, we stay relentless in our commitment, we get the results that we’re looking for.”