Macy's, Inc. (M): Results of Operations and Financial Condition
Macy's, Inc. (M) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Macy’s, Inc. Reports Strong Second Quarter 2026 Results With Continued Growth Across All Nameplates Macy’s, Inc. delivered 2.7% comparable sales growth, exceeded its expectations across all key metrics and raised its full-year top- and bottom-line guidance Macy’s com
How this was made
The 30-second read
Why it matters
The earnings beat and raised guidance provide fresh material for traders to adjust positions.
Market read
Strong earnings and raised guidance are likely to lift the stock and influence the retail sector.
What to watch
Potential headwinds from tariff costs and inventory levels could temper long‑term upside.
Macy’s, Inc. Reports Strong Second Quarter 2026 Results With Continued Growth Across All Nameplates
Net sales increased 1.1%, comparable sales rose 2.7%, all nameplates posted positive comparable sales, and GAAP diluted EPS increased to $0.62 from $0.31. The company raised full-year net sales, comparable sales, Adjusted EBITDA margin and adjusted diluted EPS guidance.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, 13 Weeks Ended August 1, 2026GAAP | $ 4,866 | – | 1.1% |
| Other revenue, 13 Weeks Ended August 1, 2026GAAP | $ 193 | – | 3.2% |
| Credit card revenues, net, 13 Weeks Ended August 1, 2026GAAP | $ 156 | – | 2.0% |
| Macy's Media Network revenue, net, 13 Weeks Ended August 1, 2026GAAP | $ 37 | – | 8.8% |
| Total revenue, 13 Weeks Ended August 1, 2026GAAP | $ 5,059 | – | – |
| Gross Margin, 13 Weeks Ended August 1, 2026other | $ 2,018; 41.5 % | – | increased 180 basis points |
| Selling, general and administrative expenses, 13 Weeks Ended August 1, 2026GAAP | $ 1,960; 38.7 % | – | decreased 20 basis points as a percent of total revenue |
| Operating income, 13 Weeks Ended August 1, 2026GAAP | $ 244; 4.8 % | – | – |
| Net income, 13 Weeks Ended August 1, 2026GAAP | $ 169; 3.3% of total revenue | – | – |
| Adjusted net income, 13 Weeks Ended August 1, 2026non-GAAP | $ 170; 3.4% of total revenue | – | – |
| Basic earnings per share, 13 Weeks Ended August 1, 2026GAAP | $ 0.64 | – | – |
| Diluted earnings per share, 13 Weeks Ended August 1, 2026GAAP | $ 0.62 | – | up 100% |
| Adjusted diluted earnings per share, 13 Weeks Ended August 1, 2026non-GAAP | $ 0.63 | – | up 14% versus last year excluding a $0.23 net tariff refund benefit |
| Adjusted diluted earnings per share excluding the impact of the net tariff refund benefit, net of tax, 13 Weeks Ended August 1, 2026non-GAAP | $ 0.40 | – | – |
| Adjusted EBIT, 13 Weeks Ended August 1, 2026non-GAAP | $ 251 | – | – |
| Adjusted EBITDA, 13 Weeks Ended August 1, 2026non-GAAP | $ 457; 9.0% of total revenue | – | – |
| Federal, state and local income tax expense, 13 Weeks Ended August 1, 2026GAAP | $58 million; 25.6% of pretax income | – | – |
| Net sales, 26 Weeks Ended August 1, 2026GAAP | $ 9,548 | – | – |
| Other revenue, 26 Weeks Ended August 1, 2026GAAP | $ 403 | – | – |
| Total revenue, 26 Weeks Ended August 1, 2026GAAP | $ 9,951 | – | – |
| Gross Margin, 26 Weeks Ended August 1, 2026other | $ 3,840; 40.2 % | – | – |
| Operating income, 26 Weeks Ended August 1, 2026GAAP | $ 356; 3.6 % | – | – |
| Net income, 26 Weeks Ended August 1, 2026GAAP | $ 232 | – | – |
| Diluted earnings per share, 26 Weeks Ended August 1, 2026GAAP | $ 0.85 | – | – |
| Adjusted net income, 26 Weeks Ended August 1, 2026non-GAAP | $ 205 | – | – |
| Adjusted diluted earnings per share, 26 Weeks Ended August 1, 2026non-GAAP | $ 0.75 | – | – |
| Adjusted EBITDA, 26 Weeks Ended August 1, 2026non-GAAP | $ 748 | – | – |
| Net cash provided by operating activities, 26 Weeks Ended August 1, 2026GAAP | $ 586 | – | – |
| Purchase of property and equipment, 26 Weeks Ended August 1, 2026GAAP | $ 153 | – | – |
| Capitalized software, 26 Weeks Ended August 1, 2026GAAP | $ 171 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Macy'sReimagine 200 locations comparable sales rose 1.9%. | Not reported by nameplate. | – | 1.1% |
| Bloomingdale'sAchieved its highest second-quarter sales volume in the brand’s history. | Not reported by nameplate. | – | 11.3% |
| BluemercuryComparable sales increased 6.2%. | Not reported by nameplate. | – | 6.2% |
Full year 2026 outlook
- Revenue$21.675 billion to $21.825 billion
- NoteComparable sales change: 1.0% to 1.5%
- NoteAdjusted EBITDA as a percent of total revenue: 7.8% to 8.0%
- NoteAdjusted diluted EPS: $2.15 to $2.35
- NoteForward-looking guidance incorporates reinvestments of the majority of tariff refunds with approximately $0.05 per share flowing through to full year adjusted diluted EPS.
- NoteTariff refunds net of reinvestment benefited adjusted diluted EPS by $0.23 in the second quarter with approximately $0.18 per share of reinvestment in the second half incorporated in guidance.
Capital returns
- Returned $51 million in cash to shareholders through its quarterly dividend in the second quarter of 2026.
- Returned $101 million in cash to shareholders through its quarterly dividend in the first half of 2026.
- Repurchased 2.2 million of its shares for $50 million during the second quarter of 2026.
- Repurchased 4.9 million shares for $100 million in the first half of 2026.
- Approximately $1.0 billion remained under the $2.0 billion share repurchase authorization as of the end of the second quarter of 2026.
- Board declared a regular quarterly dividend of 19.15 cents per share, payable on October 1, 2026 to shareholders of record at the close of business on September 15, 2026.
What drove it
- Macy’s, Inc. comparable sales rose 2.7%, and go-forward business comparable sales increased 2.8%.
- Net sales grew 1.9% excluding the impact of fiscal 2025 store closures.
- Gross margin rate increased 180 basis points to 41.5%, including a 180 basis point benefit from net tariff refunds.
- Credit card net revenues increased $3 million to $156 million, supported by the company’s healthy credit portfolio and stable net credit card losses.
- Macy’s Media Network net revenue increased $3 million to $37 million, reflecting partner engagement on the company’s advertising platform.
- The company received $98 million in IEEPA tariff refunds in the second quarter of 2026 and $18 million following the quarter end, for a total of $116 million.
Concerns
- Excluding a 180 basis point benefit from net tariff refunds and a 10 basis point headwind from ongoing tariff and fuel costs, gross margin rate was up 10 basis points.
- SG&A expense increased $16 million, reflecting higher variable costs driven by net sales growth and investments in Bold New Chapter initiatives.
- The company cited macroeconomic and geopolitical factors that could influence discretionary spend.
- Guidance incorporates approximately $0.18 per share of reinvestment in the second half associated with tariff refunds.
- Fiscal 2025 store closures contributed approximately $35 million in the second quarter of 2025 and roughly $145 million of annual net sales.
What to watch
- Comparable-sales performance at Macy’s, including the Reimagine 200 locations.
- Whether Bloomingdale’s sustains double-digit comparable-sales growth and Bluemercury continues growth.
- Gross-margin performance after the net tariff refund benefit and ongoing tariff and fuel costs.
- Execution of planned investments in Reimagine 200 locations and luxury nameplates.
- Full-year delivery against raised net sales, comparable sales, Adjusted EBITDA margin and adjusted diluted EPS guidance.
Balance sheet and cash flow
- Cash and cash equivalents were $ 1,294 as of August 1, 2026, versus $ 829 as of August 2, 2025.
- Merchandise inventories were $ 4,449 as of August 1, 2026, versus $ 4,342 as of August 2, 2025. Merchandise inventories increased 2.5% year-over-year.
- Total debt was $2.4 billion as of the end of the second quarter of 2026. Long-Term Debt was $ 2,433 as of August 1, 2026.
- Available borrowing capacity under the asset-based credit facility was $2.0 billion.
- Net cash provided by operating activities was $ 586 for the 26 Weeks Ended August 1, 2026, versus $ 255 for the 26 Weeks Ended August 2, 2025.
- Net cash used by investing activities was $ 286 for the 26 Weeks Ended August 1, 2026, versus $ 262 for the 26 Weeks Ended August 2, 2025.
- Net cash used by financing activities was $ 251 for the 26 Weeks Ended August 1, 2026, versus $ 471 for the 26 Weeks Ended August 2, 2025.
Analysis
Macy’s reported a stronger second quarter, with net sales of $4.9 billion increasing 1.1% and comparable sales rising 2.7%. Comparable sales were positive across all nameplates, led by Bloomingdale’s at 11.3%, while Macy’s comparable sales increased 1.1% and Reimagine 200 locations increased 1.9%. Bluemercury comparable sales increased 6.2%. The company described this as its fifth consecutive quarter of comparable-sales growth at Macy’s.
Profitability improved substantially. Gross margin rate was 41.5%, up 180 basis points, while SG&A as a percent of total revenue decreased 20 basis points to 38.7%. GAAP operating income was $244 million, compared with $149 million in the prior-year period. GAAP net income was $169 million and GAAP diluted EPS was $0.62, compared with $87 million and $0.31, respectively. Adjusted EBITDA increased to $457 million, or 9.0% of total revenue, from $373 million, or 7.5% of total revenue.
Tariff refunds were a material component of the quarter. The company received $98 million during the quarter and $18 million following quarter end, for $116 million total expected IEEPA tariff refunds. The net tariff refund benefit was $0.23 per share in the quarter. Excluding the 180 basis point tariff-refund benefit, partially offset by a 10 basis point tariff and fuel cost headwind, gross margin rate was up 10 basis points. Macy’s expects approximately $20 million of refund proceeds to flow to full-year EPS and is investing the remaining $96 million in 2026.
Liquidity strengthened year over year, with cash and cash equivalents of $1.3 billion versus $0.8 billion last year, $2.0 billion of available borrowing capacity, and total debt of $2.4 billion. For the first half, operating cash flow was $586 million versus $255 million in the prior-year period. The company returned $51 million through dividends and repurchased 2.2 million shares for $50 million in the quarter.
Management raised full-year 2026 guidance to net sales of $21.675 billion to $21.825 billion, comparable-sales growth of 1.0% to 1.5%, Adjusted EBITDA margin of 7.8% to 8.0%, and adjusted diluted EPS of $2.15 to $2.35. The outlook incorporates the majority of tariff-refund reinvestments, including approximately $0.18 per share of second-half reinvestment, as well as planned investments in Reimagine 200 locations and luxury nameplates.
Management, verbatim
Our second-quarter performance builds on the progress our colleagues have consistently delivered through our Bold New Chapter strategy. The investments we're making are driving results across our portfolio, from the continued outperformance of our Reimagine 200 Macy’s stores, to meaningful double-digit growth at Bloomingdale’s and another solid quarter at Bluemercury. As we enter the second half of the year, we remain focused on scaling what is resonating most with customers – exciting brands and assortments and compelling events and experiences. Combined with disciplined execution, we expect these efforts to continue to build a durable foundation for sustainable, profitable growth.
Tony Spring, chairman and chief executive officer of Macy’s, Inc.
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported operating metrics were not provided.
- Nameplate revenue for Macy’s, Bloomingdale’s and Bluemercury was not provided.
- Quarterly operating cash flow was not provided.
- Free cash flow was not provided.
- Forward gross-margin, operating-expense and tax-rate guidance was not provided.
- A previous-release outlook section with prior-quarter guidance comparison data was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Macy's filed a Form 8‑K reporting its Q2 2026 earnings, comparable sales growth, and raised full‑year guidance.
Ticker impact
Macy's reported Q2 2026 results, raised full-year guidance and posted 100% GAAP EPS growth.
expect upside pressure as investors price in higher earnings and raised guidance
The earnings beat and raised guidance are fresh primary disclosures for a large-cap retailer, likely to move the stock on the day of release.
Market effects
Retail sector may see broader optimism as a major department store raises outlook.
U.S. consumer discretionary stocks could benefit from the upbeat guidance.
Limited to U.S. markets; no direct global macro effect.
Counterpoint
If the guidance proves overly optimistic, a pullback could follow once detailed guidance is scrutinized.
Key entities
- companyMacy's, Inc.
U.S. department store operator (ticker M).
