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Macy's Raises Full-Year Outlook as First-Quarter Earnings Unexpectedly Rise

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Macy's Raises Full-Year Outlook as First-Quarter Earnings Unexpectedly Rise

Macy's (M) raised its full-year outlook on Wednesday as the department store operator's fiscal first-quarter earnings unexpectedly increased on an annual basis.

The company now anticipates adjusted earnings to come in between $2 and $2.20 a share for fiscal 2026, up from its previous guidance of $1.90 to $2.10. The current consensus on FactSet is for non-GAAP EPS of $2.09. Shares of the company gained 3% in the most recent premarket activity.

Sales are pegged at $21.5 billion to $21.75 billion for the ongoing fiscal year, up from the prior forecast of $21.4 billion to $21.65 billion. The Street is looking for $21.59 billion. Comparable owned-plus-licensed-plus-marketplace sales are projected to increase by 0.5% to 1.2%, compared with the previous outlook for a decline of 0.5% to growth of 0.5%.

Macy's said its guidance continues to reflect prudence and recognition that macro and geopolitical factors could weigh on discretionary spending. The outlook still assumes that tariffs will have a larger impact in the first half versus the second, and doesn't include potential receipts from tariff refunds.

In February, the US Supreme Court invalidated President Donald Trump's reciprocal tariffs enacted under the International Emergency Economic Powers Act.

Last month, department store chain Kohl's (KSS) reiterated its full-year outlook, while retailer Target (TGT) lifted its sales growth guidance for fiscal 2026.

For the three-month period ended May 2, Macy's adjusted EPS increased to $0.13 from $0.11 the year before, defying the average analyst estimate on FactSet for a decrease to $0.03. Sales, inclusive of store closures, inclined to $4.68 billion from $4.6 billion, ahead of the Street's view for $4.61 billion.

"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," Chief Executive Tony Spring said in a statement. "We're confident in our path to sustainable, profitable growth."

Comparable sales moved up 3% year over year in the first quarter. By brand, Macy's comparable sales advanced 1.6% while Bloomingdale's climbed 10%. Bluemercury comparable sales moved 6.4% higher.

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