US' Macy's reaffirms FY26 sales outlook, lowers profit forecast

However, the company revised its profitability expectations downward. Adjusted EBITDA as a percentage of total revenue is now projected between 7.4 per cent and 7.9 per cent, compared to the earlier range of 8.4 per cent to 8.6 per cent.

Similarly, core adjusted EBITDA margin has been lowered to 7-7.5 per cent from the previous 8-8.2 per cent. The adjusted diluted earnings per share (EPS) guidance have also been reduced to a range of $1.6 to $2, down from $2.05 to $2.25. These figures reflect the impact of FY24 store closures, notably Macy’s nameplate locations, which had contributed approximately $700 million in annual net sales, Macy’s said in a press release.

Meanwhile, Macy’s achieved net sales decreased 5.1 per cent year-over-year (YoY) to $4.6 billion in the first quarter (Q1) of fiscal 2025 (FY25) ended May 3, 2025, exceeding the company’s prior guidance range. The company’s comparable sales were down 2 per cent on an owned basis. It reported GAAP diluted EPS of $0.13, adjusted diluted EPS of $0.16, above the company’s prior guidance range.

The net income of the company in Q1 was $38 million, or 0.8 per cent of total revenue, and adjusted net income was $46 million, or 1 per cent of total revenue. The gross margin rate of 39.2 per cent was flat, reflecting improved merchandise margin offset by higher delivery expense as a percent of net sales.

Bloomingdale’s net sales were up 2.6 per cent YoY, with comparable sales up 3 per cent on an owned basis and up 3.8 per cent on an owned-plus-licensed-plus-marketplace basis. Bluemercury net sales were up 0.8 per cent and comparable sales were up 1.5 per cent on an owned basis.

Comparable sales at the 125 Reimagine locations declined by 1.3 per cent on an owned basis and by 0.8 per cent on an owned-plus-licensed basis.

Other revenue in Q1 rose by $40 million, or 26 per cent, reaching $194 million. This included a $37 million increase in credit card net revenues, up 31.6 per cent to $154 million, and an $3 million rise in net revenue from Macy’s media network, which grew 8.1 per cent to $40 million. The selling, general and administrative (SG&A) expense of $1.9 billion increased $2 million.

“We continued to execute against our bold new chapter strategy during the quarter, scaling key initiatives that improved our customer experience and contributed to stronger than expected performance across all three of our nameplates,” said Tony Spring, chairman and chief executive officer of Macy’s, Inc. “Our first quarter results give us confidence that we have the right strategy and team in place to navigate the current environment while we continue to invest in our customer on the path to returning Macy’s, Inc to sustainable profitable growth.”

ALCHEMPro News Desk (SG)