US-based Macy's lifts 2025 outlook as Q3 beats expectations

American department store chain Macy’s, Inc has reported stronger-than-expected third quarter (Q3) results for fiscal 2025 and raised its full-year guidance after delivering gains across all nameplates. Net sales reached $4.7 billion, exceeding its outlook, while comparable sales rose 2.5 per cent on an owned basis and 3.2 per cent on an owned-plus-licensed-plus-marketplace (O+L+M) basis, reflecting broad-based momentum.

GAAP diluted EPS came in at $0.04, with adjusted diluted EPS at $0.09, ahead of prior guidance due to better net sales, margin performance and disciplined selling, general and administrative expense (SG&A) management.

Bloomingdale’s delivered standout comparable sales growth of 8.8 per cent, it’s strongest in 13 quarters, while Bluemercury posted a 1.1 per cent rise. Macy’s Reimagine 125 stores continued to outperform, with comparable growth above the wider nameplate.

Total company sales, including store closures, dipped 0.6 per cent from a year earlier, but comparable sales rose across all banners. Macy’s go-forward business delivered a 3.4 per cent O+L+M comparable increase.

Gross margin slipped 20 basis points to 39.4 per cent, largely due to a 50-basis-point tariff headwind. SG&A fell $40 million, benefiting from store closures and ongoing efficiency measures, Macy’s said in a financial release.

Other revenue climbed 24.2 per cent to $200 million. Adjusted EBITDA reached $285 million, or 5.8 per cent of revenue, with core adjusted EBITDA improving to 5.6 per cent.

“Our third quarter sales were the strongest in 13 quarters, reflecting the acceleration of our Bold New Chapter strategy and demonstrating that the meaningful enterprise-wide changes we’ve made are resonating with customers,” said Tony Spring, chairman and chief executive officer of Macy’s, Inc.

The company ended the quarter with $447 million in cash and $2 billion in available credit, with no major debt maturities until 2030. Inventories rose 0.7 per cent, aligned with expectations and reflecting tariff-related cost pressures.

On the back of its Q3 performance, Macy’s raised its 2025 net sales guidance to $21.475 billion–$21.625 billion and now expects flat to slightly positive comparable O+L+M sales for the year.

Adjusted EBITDA margin is now projected between 7.8 and 8 per cent. The retailer reiterated its commitment to its Bold New Chapter strategy while reinvesting efficiency gains to drive long-term growth.

“As we enter the holiday season, we are well-positioned with compelling new merchandise and an omni-channel customer experience that delivers both inspiration and value. With a strategy rooted in hospitality, our teams are focused on driving long-term, profitable growth,” Spring added.

ALCHEMPro News Desk (HU)