Macy's Raises 2026 Outlook as Premium Retail Businesses Gain Momentum
Macy's has raised its full-year financial outlook after reporting stronger-than-expected second-quarter sales, with its premium businesses providing much of the momentum behind the retailer's latest strategy.
The company now expects fiscal 2026 net sales between $21.68 billion and $21.83 billion, compared with its previous forecast of $21.50 billion to $21.75 billion.
Macy's also increased its adjusted earnings-per-share forecast to between $2.15 and $2.35.
The revised outlook provides a fresh measure of progress for Chief Executive Officer Tony Spring's turnaround strategy, which emphasizes higher-margin merchandise, premium brands and store improvements.
Bloomingdale's and Bluemercury Outperform
The strongest growth came from Macy's upscale businesses.
Comparable sales at Bloomingdale's increased 11.3% during the second quarter, while Bluemercury recorded a 6.2% increase.
The Macy's namesake business posted a smaller 1.1% increase in comparable sales.
The results demonstrate how different parts of the organization are responding to the current consumer environment.
Affluent shoppers have continued spending on fashion, beauty and other discretionary products, while lower-income consumers remain more selective because of higher household expenses.
That divide has become one of the most important themes in U.S. retail.
A Strategic Shift
Macy's has spent more than two years implementing its "Bold New Chapter" turnaround strategy.
The company has been closing underperforming stores, improving merchandise assortments and investing in locations where management sees stronger opportunities.
The strategy also places greater emphasis on premium products and full-price sales.
That approach represents a shift away from relying heavily on promotional activity to generate traffic.
For department stores, the challenge is particularly complex. They compete with online retailers, specialty chains, discount stores and direct-to-consumer brands.
Macy's is attempting to differentiate through a combination of brand partnerships, merchandise selection and physical-store improvements.
Consumer Spending Remains Uneven
The company's results also reveal an uneven consumer environment.
Macy's reported that apparel sales were strong across its businesses during the quarter. Watches and fragrances were also performing well, particularly as retailers prepare for holiday demand.
At the same time, basic merchandise has been selling more slowly.
That pattern suggests consumers are prioritizing purchases rather than abandoning spending entirely.
For businesses, the distinction matters.
A consumer who cuts back on routine purchases but continues buying selected premium products creates a very different retail environment from one in which overall spending collapses.
Retailers therefore need to understand which categories consumers still consider worth purchasing.
Holiday Season Approaches
The latest guidance comes as retailers prepare for the holiday shopping period, traditionally one of the most important parts of the year.
Deloitte expects U.S. holiday retail sales to increase by as much as 4.8%, supported by rising disposable incomes.
However, the firm also expects consumers to remain focused on value while selectively spending on discretionary items.
That environment could favor retailers capable of offering both premium merchandise and clear value.
Macy's premium brands provide exposure to higher-income shoppers, while its broader store network gives the company access to a much larger consumer base.
The challenge will be translating stronger performance at Bloomingdale's and Bluemercury into broader improvement across Macy's namesake stores.
Leadership Under Pressure
The company's performance also provides a case study in retail leadership.
Spring's strategy has been to reposition Macy's rather than simply maintain its traditional department-store model.
That includes making difficult decisions about store closures, merchandise selection and investment priorities.
The approach has produced several consecutive quarters of comparable-sales growth for the namesake business, but management continues to describe the turnaround as unfinished.
The current-quarter forecast illustrates why.
Macy's expects an adjusted loss of between 19 cents and 23 cents per share in the period, wider than analysts had anticipated.
The company is therefore generating stronger sales while continuing to absorb significant costs associated with its transformation.
What It Means for the Retail Industry
Macy's latest results demonstrate that established retailers can still find growth by concentrating on differentiated brands and higher-margin categories.
The results also show why consumer segmentation has become increasingly important.
Retailers cannot assume that all households are behaving the same way. Income differences, inflation, borrowing costs and changing preferences are influencing purchasing decisions in different ways.
Macy's response has been to focus on customers who remain willing to spend while attempting to improve the broader brand.
The strategy remains a work in progress, but the latest forecast suggests management believes the turnaround is gaining traction.
For business leaders across retail, the central lesson is not about Macy's alone. It is about adapting a large legacy organization to a consumer environment in which shoppers are more selective and competition is increasingly fragmented.
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