Macy’s (M) raised its fiscal year outlook on Wednesday after posting better-than-expected quarterly results across the board, with same-store sales growth a bright spot.
While revenue and adjusted earnings fell, both came in higher than Wall Street had forecast. Shares in the retail giant jumped more than 12% in premarket trading after the earnings report.
Macy’s second quarter revenue fell 2.53% to $4.81 billion but topped expectations of $4.71 billion, per Bloomberg consensus data. Adjusted earnings per share declined 41% to $0.41, compared to expectations of $0.18.
Same-store sales increased 1.9%, marking the company’s best growth in 12 quarters. Analysts had forecast a decline of 0.51%. At the 125 stores where Macy’s has recently invested in improving merchandise and service, same-store sales grew 1.4% overall.
Its luxury chain Bloomingdale’s and cosmetics retailer Bluemercury booked gains in same-store sales of 3.6% and 1.2%, respectively.
These results led the company to raise its outlook when it comes to net sales, comparable sales and adjusted earnings guidance.
“Our teams achieved better than expected top- and bottom-line results during the second quarter … reflecting the strong performance in Macy’s Reimagine 125 locations, Bloomingdale’s and Bluemercury,” Macy’s chairman and CEO Tony Spring said in the results release.
Spring said Macy’s performance benefited from its turnaround plan and from its being “multi-brand, multi-category, omni-channel retailer.”
Macy’s now projects revenue to be in the range of $21.15 billion to $21.45 billion, slightly higher than the previous range of $21 billion to $21.4 billion. For 2025, same-store sales are expected to decrease by between 0.5% and 1.5% year over year. It previously expected that the lower end would be down 2.0%.
Adjusted earnings are now also expected to be higher, between $1.70 to $2.05, compared to the previous range of $1.60 and $2.00.
“We think this was a strong performance in a tough operating environment,” CFRA analyst Zachary Warring said in a note to clients.
Macy’s stock is under pressure, down nearly 19.5% year-to-date prior to Wednesday’s open, compared to the S&P 500’s 9% gain, as the retailer faced ongoing pressure around tariffs and from an activist investor, as well as moved forward with the turnaround which included closing stores.
