It has been about a month since the last earnings report for Macy's (M Quick QuoteM - Free Report) . Shares have added about 5.5% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Macy's due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Macy's, Inc. before we dive into how investors and analysts have reacted as of late.

Macy's Q2 Earnings Beat Estimates, Comps Up Y/Y, FY25 View Raised

Macy’s reported second-quarter fiscal 2025 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. However, both metrics decreased from the year-ago quarter figures. 

The company has reported adjusted earnings of 41 cents per share, surpassing the Zacks Consensus Estimate of 19 cents. However, the bottom line decreased 22.6% from 53 cents in the year-ago period. 

Net sales of $4,812 million beat the consensus estimate of $4,718 million. However, the top line dipped 2.5% from the year-ago quarter. Comps increased 0.8% on an owned basis and 1.9% on an owned-plus-licensed-plus-marketplace basis from the prior-year quarter, with all company nameplates delivering positive comps.

M’s go-forward business comps, including both go-forward locations and digital platforms across all nameplates, increased 1.1% on an owned basis and 2.2% on an owned-plus-licensed-plus-marketplace basis.

Net credit card revenues were $153 million, up 22.4% from the year-ago period. The metric represented 3.2% of sales, up 70 basis points from the year-ago quarter. Macy’s Media Network revenues were $34 million, flat year over year. The metric represented 0.7% of sales, unchanged from the year-ago quarter.

Update on M’s Brand Performance

Comps across the Macy’s brand increased 0.4% year over year on an owned basis and 1.2% on an owned-plus-licensed-plus-marketplace basis. At the Bloomingdale’s brand, comps increased 3.6% on an owned basis and 5.7% on an owned-plus-licensed-plus-marketplace basis, marking its fourth consecutive quarter of growth. Comps at the Bluemercury brand rose 1.2% on an owned basis, its 18th consecutive quarter of comps growth.

Insight Into Macy’s Margins & Expenses

The gross margin in the second quarter was 39.7%. This represented a decline of 80 basis points from last year, driven by proactive markdowns on remaining early Spring merchandise to support healthy inventory levels, as well as product purchased under prior tariff rates. 

The company reported selling, general and administrative (SG&A) expenses of $1.94 billion, down 1.5% year over year. Savings from store closures and cost-control initiatives were partially offset by investments in strategic growth, including the Reimagine 125 locations and Bloomingdale’s. However, SG&A expenses increased 20 basis points year over year to 38.9% of total revenues, reflecting the impact of lower net sales. 

Macy’s reported an adjusted EBITDA of $393 million, down 10.3% from $438 million in the year-ago quarter. The adjusted EBITDA margin was 7.9%, down 70 basis points year over year.

M’s Financial Snapshot: Cash, Inventory & Equity Overview

The company ended the fiscal second quarter with cash and cash equivalents of $829 million, long-term debt of $2.43 billion and shareholders' equity of $4.45 billion. Merchandise inventories declined 0.8% on a year-over-year basis. In the first half of fiscal 2025, net cash provided by operating activities was $255 million. Asset sale gains totaled $16 million, representing a $20 million decrease from the prior-year period. In the second quarter of fiscal 2025, the company repurchased 4 million shares for $50 million. As of the end of the quarter, $1.2 billion remained available under its $2 billion share repurchase authorization.

Peek Into Macy’s FY25 Guidance

For 2025, the company updated its annual guidance to reflect its second-quarter performance and the anticipated gross margin impact of current tariffs in the back half of the year. While Macy’s expects consumers to remain more discerning and the retail landscape to be competitive and promotional, the company remains confident in its ability to adapt. This confidence is supported by a strong financial foundation, a diverse portfolio of brands and categories, and positioning across the value spectrum, from off-price to luxury. The company now expects net sales between $21.15 billion and $21.45 billion, compared with the prior outlook of $21 billion to $21.4 billion.

Comparable owned-plus-licensed-plus-marketplace sales are projected to decline 1.5% to 0.5% year over year, versus the earlier guidance of a 2% to 0.5% decline. Go-forward business comparable owned-plus-licensed-plus-marketplace sales are expected to range from a 1.5% dip to flat, compared with the prior outlook of a 2% dip to flat. Adjusted EBITDA as a percentage of total revenues is expected at 7.4% to 7.9%. Core adjusted EBITDA is projected at 7% to 7.5% of total revenues. Adjusted earnings per share are now projected between $1.70 and $2.05, compared with the prior range of $1.60 to $2.00. The guidance reflects the impact of fiscal 2024 store closures, which contributed approximately $700 million to annual net sales.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a upward trend in fresh estimates.

The consensus estimate has shifted 26.89% due to these changes.

VGM Scores

At this time, Macy's has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock has a score of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Macy's has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Macy's belongs to the Zacks Retail - Regional Department Stores industry. Another stock from the same industry, Kohl's (KSS Quick QuoteKSS - Free Report) , has gained 0.1% over the past month. More than a month has passed since the company reported results for the quarter ended July 2025.

Kohl's reported revenues of $3.55 billion in the last reported quarter, representing a year-over-year change of -5%. EPS of $0.56 for the same period compares with $0.59 a year ago.

For the current quarter, Kohl's is expected to post a loss of $0.17 per share, indicating a change of -185% from the year-ago quarter. The Zacks Consensus Estimate has changed +13.7% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Kohl's. Also, the stock has a VGM Score of A.