Macy’s Inc. (NYSE:M) shares moved higher in premarket trading on Wednesday after the department store operator delivered first-quarter earnings and revenue ahead of expectations while raising its outlook for the remainder of the year.
The results suggest the company’s ongoing transformation strategy is beginning to generate measurable improvements across its retail portfolio.
Profit and Revenue Top Wall Street Expectations
For the quarter ended May 2026, Macy’s reported adjusted earnings of $0.13 per share, exceeding analyst forecasts of $0.03 by a wide margin.
Net sales increased 1.8% year over year to $4.70 billion, surpassing the consensus estimate of $4.61 billion.
The performance marked another quarter of results ahead of expectations as the company continues to execute its turnaround initiatives.
“We’re off to a strong start to the year, exceeding expectations for the fifth consecutive quarter as our Bold New Chapter strategy continues to build momentum,” chairman and chief executive Tony Spring said in a statement.
Comparable Sales Deliver Strongest First-Quarter Growth in Four Years
Comparable sales across Macy’s three core brands—Macy’s, Bloomingdale’s and Bluemercury—increased 3%, representing the strongest first-quarter comparable sales performance in four years.
Bloomingdale’s led the way with a 10.2% rise in comparable sales, marking its seventh consecutive quarter of growth and its strongest first-quarter result on record.
Bluemercury posted a 6.4% increase in comparable sales, while the Macy’s banner recorded growth of 1.6%.
Within the Macy’s division, the company’s Reimagine 200 store initiative continued to outperform, delivering comparable sales growth of 2.4%.
Margins Remain Resilient Despite Tariff Pressures
Gross margin came in at 38.9%, down 30 basis points from the prior year.
Management noted that tariffs accounted for the entire decline, adding that gross margin would have been unchanged year over year excluding the 30-basis-point impact from tariffs.
Selling, general and administrative expenses rose by $39 million to $2 billion, although they remained steady at 39.9% of total revenue.
Adjusted EBITDA totaled $290 million, representing 5.9% of revenue, compared with $304 million, or 6.3% of revenue, in the year-earlier period.
Earnings Continue to Improve
On a GAAP basis, diluted earnings per share increased to $0.23 from $0.13 in the prior-year quarter.
Adjusted diluted earnings per share rose to $0.13 from $0.11 a year earlier, reflecting continued progress in profitability despite a challenging retail environment.
Management Raises Fiscal 2026 Outlook
Encouraged by the stronger-than-expected start to the year, Macy’s increased its guidance for fiscal 2026.
The company now expects net sales between $21.50 billion and $21.75 billion, up from its previous forecast of $21.40 billion to $21.65 billion.
Management also improved its comparable sales outlook, projecting growth of 0.5% to 1.2%, compared with its prior expectation of between a 0.5% decline and a 0.5% increase.
Adjusted diluted earnings per share are now expected to range from $2.00 to $2.20, compared with the previous forecast of $1.90 to $2.10.
The revised guidance brackets the analyst consensus estimate of $2.10 per share.
The company maintained its adjusted EBITDA margin forecast of 7.7% to 7.9% of total revenue.
Strong Liquidity and Continued Shareholder Returns
Macy’s ended the quarter with $1.30 billion in cash and approximately $2 billion of available borrowing capacity.
Total debt stood at $2.40 billion, with no significant long-term debt maturities scheduled before 2030.
The company continued to return capital to shareholders during the quarter, repurchasing 2.6 million shares for $50 million while also paying $50 million in dividends.
Approximately $1.10 billion remains available under Macy’s existing $2 billion share repurchase authorization, providing additional flexibility for future shareholder returns.
The combination of stronger sales, improving comparable-store performance and higher full-year guidance helped reinforce investor confidence that Macy’s turnaround strategy is gaining momentum.