Macy’s Returns to Comparable Sales Growth as Bloomingdale’s Shines and Strategic Investments Pay Off
Fiscal 2025 Beats Guidance as Bloomingdale’s Delivers Record Holiday Performance
Macy’s, Inc. (NYSE: M) capped off fiscal 2025 by exceeding its own guidance, achieving a return to annual comparable sales growth and highlighting strong performance across its brands. A key bright spot: Bloomingdale’s saw its best holiday quarter ever, with comparable sales up 9.9%. This turnaround comes as Macy’s implements its 'Bold New Chapter' strategy and expands its 'Reimagine' initiative to reach 200 stores by 2026.
Comparable Sales Growth Highlights the Turnaround
The financial results reflect a strengthening retail picture:
| Metric | Q4 2025 | FY 2025 | Compared to FY 2024 |
|---|---|---|---|
| Net Sales (millions) | $7,639 | $21,764 | -2.4% |
| Comparable Sales Growth (Owned+Licensed+Marketplace) | 1.8% | 1.5% | Returned to Positive |
| Bloomingdale’s Comparable Sales | 9.9% | 7.4% | Holiday Record |
| Bluemercury Comparable Sales | 1.3% | 1.6% | Improvement |
| Gross Margin Rate | 35.2% | 38.0% | -0.4 pts (yr/yr) |
| Adjusted EPS | $1.67 | $2.32 | Above Guidance |
| Free Cash Flow (millions) | – | $797 | Up vs. Prior Year |
Strategic Initiatives and Cost Management Support Results
The retailer’s push to focus on 'go-forward' stores and digital expansion continues to produce results. Store closures in legacy locations were offset by growth in digital and in higher-performing stores, especially notable under the Reimagine 125 initiative (growing to 200 by 2026). Bloomingdale’s and Bluemercury also contributed meaningfully, with Bloomingdale’s net sales rising 6.3% for the year.
Cost disciplines and targeted investments—such as savings from closed stores, continued cost containment, and investments in digital—kept SG&A expenses under control. Macy’s managed to reduce SG&A by $90 million year over year, even as it invested in future-facing locations and technologies.
Cash Flow and Balance Sheet Remain Strong
Macy’s generated $1.4 billion in operating cash flow and $797 million in free cash flow for the year. At year-end, cash and equivalents stood at $1.25 billion, with no material long-term maturities until 2030. The company returned $448 million to shareholders via dividends and share buybacks, with dividends up 5% for 2026 and $1.1 billion left on its buyback authorization.
| Liquidity Snapshot | Jan 2026 | Feb 2025 |
|---|---|---|
| Cash & Equivalents (millions) | $1,246 | $1,306 |
| Total Debt (millions) | $2,432 | $2,773 |
| Free Cash Flow (millions, FY) | $797 | $679 |
2026 Outlook: Conservative Guidance Amid Macroeconomic Uncertainty
Looking ahead, Macy’s is forecasting net sales between $21.4 billion and $21.65 billion and comparable sales growth of -0.5% to +0.5%. The company expects Adjusted EPS in the $1.90 to $2.10 range. Investments will continue in the Reimagine 200 and luxury nameplates, with an expected first-half tariff impact but a flexible approach to respond to evolving consumer demand and competitive pressures.
| 2026 Guidance | 2025 Actuals | |
|---|---|---|
| Net Sales | $21.4–$21.65B | $21.8B |
| Comparable Sales Change | -0.5% to 0.5% | 1.5% |
| Adj. EBITDA % of Revenue | 7.7–7.9% | 7.9% |
| Adjusted EPS | $1.90–$2.10 | $2.32 |
Key Takeaway: Sales Momentum and Cost Discipline Set the Stage for Expansion
Macy’s is entering 2026 from a position of strength, with comparable sales growth, robust cash generation, and focused investments in higher-performing assets and digital. While the near-term guidance is cautious given possible macro and tariff headwinds, the company’s balance sheet, momentum in luxury and digital, and continued discipline in cost and capital allocation may provide support in a fast-changing retail landscape. Investors and observers should watch the rollout of Reimagine 200 stores and ongoing digital initiatives for further evidence of Macy’s long-term strategy in action.
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