Macy’s (M) earnings Q3 2025

Macy’s Exceeds Wall Street’s Sales Expectations for Third Consecutive Quarter

Macy’s, the iconic American department store chain, has reported its third consecutive quarter of beating Wall Street’s sales expectations. This milestone marks a significant turning point in the company’s turnaround strategy, which has been underway for several years. The retailer’s strong performance is a testament to its efforts to revamp its business model and adapt to the ever-changing retail landscape.

Strong Sales Growth and Revised Outlook

Macy’s reported a 3.2% increase in companywide comparable sales, including owned and licensed merchandise, as well as its third-party marketplace. This growth is a notable improvement from the company’s previous expectations, which anticipated a decline in sales. As a result, Macy’s has revised its full-year sales and earnings outlook, now expecting adjusted earnings per share of between $2 and $2.20, up from its previous estimate of $1.70 to $2.05.

The company’s net sales are expected to reach $21.48 billion to $21.63 billion, compared to its prior outlook of $21.15 billion to $21.45 billion. While this represents a drop from the previous year’s net sales of $22.29 billion, Macy’s attributes approximately $700 million of the decline to the closure of 64 stores at the end of the last fiscal year and in the early part of this fiscal year.

Challenges Ahead and Prudent Outlook

Despite the positive results, Macy’s remains cautious about the upcoming holiday quarter, citing selective spending by consumers and higher tariffs as potential challenges. CEO Tony Spring expressed a “prudent view” of the fourth quarter, given the tough year-over-year comparisons and uncertainty surrounding the spending habits of “aspirational customers” who may be more financially pressured.

Spring emphasized the importance of Macy’s department store model during the gift-giving season, highlighting the wide variety of merchandise and range of prices offered. The company is taking a measured approach to promotions, expecting them to be at similar levels to the year-ago period, while also acknowledging the impact of higher tariffs on prices.

Investments in Store Experience and Brand Revamp

Macy’s has been investing in its store experience, with a focus on staffing, merchandise, and visual displays. The company has rolled out its revamped strategy to 125 locations, dubbed the “First 50,” and plans to expand this approach to more stores. This effort aims to reverse the trend of lagging sales at Macy’s department stores, which have trailed behind the company’s higher-end department store, Bloomingdale’s, and beauty chain, Bluemercury.

The company’s efforts seem to be paying off, with Bloomingdale’s posting a 9% increase in comparable sales and Bluemercury’s sales rising 1.1%. Spring attributed the company’s better performance to shoppers responding to the changes made to its legacy department stores, including the addition of new brands and improved customer service.