Macy’s Inc. (NYSE:M) shares jumped 11% in premarket trading Wednesday after the department store chain reported second-quarter results that surpassed expectations and raised its full-year guidance, fueled by its strongest comparable sales growth in three years.
The retailer posted adjusted earnings of $0.41 per share, well above analyst estimates of $0.19. Revenue reached $4.8 billion, exceeding the consensus forecast of $4.69 billion. Comparable sales rose 0.8% on an owned basis and 1.9% on an owned-plus-licensed-plus-marketplace basis, marking the company’s best performance in 12 quarters.
“Our teams achieved better than expected top- and bottom-line results during the second quarter, driven by our strongest comparable sales growth in 12 quarters, reflecting the strong performance in Macy’s Reimagine 125 locations, Bloomingdale’s and Bluemercury,” said Tony Spring, chairman and CEO of Macy’s.
The company’s multi-brand strategy demonstrated strength across its portfolio. Bloomingdale’s posted its fourth consecutive quarter of growth, with comparable sales up 3.6% on an owned basis and 5.7% on an owned-plus-licensed-plus-marketplace basis. Bluemercury recorded 1.2% comparable sales growth, marking its 18th consecutive quarter of gains.
Macy’s raised its full-year guidance, now projecting revenue between $21.15 billion and $21.45 billion, up from its previous estimate of $21.0 billion to $21.4 billion. The company also lifted its adjusted EPS forecast to $1.70–$2.05, compared with its prior projection of $1.60–$2.00.
During the quarter, the retailer returned $100 million to shareholders, including $50 million in dividends and $50 million in share repurchases. Merchandise inventories fell 0.8% year-over-year, reflecting improved inventory management.
Despite the positive results, gross margin declined 80 basis points to 39.7%, impacted by proactive markdowns on remaining early Spring merchandise and tariffs.
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