Macy’s, Inc. (M Quick QuoteM - Free Report) has reported fourth-quarter fiscal 2025 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. However, both metrics decreased from the year-ago quarter. Comparable sales (comps) increased on an owned-plus-licensed-plus-marketplace basis.

As the company completes the second year of its Bold New Chapter, it is encouraged by the growth and progress achieved against its strategic priorities. At Macy's, the focus is on introducing more relevant brands and enhancing storytelling to better serve customers. Bloomingdale's has delivered strong performance, demonstrating its ability to elevate the customer experience and capture demand across the premium, contemporary and luxury segments. For fiscal 2026 and beyond, the company is well-positioned to build on this momentum.

More on Macy’s Q4 Results

The company has reported adjusted earnings of $1.67 per share, surpassing the Zacks Consensus Estimate of adjusted earnings of $1.53. However, the bottom line decreased from adjusted earnings of $1.80 in the year-ago period. 

Net sales of $7,639 million beat the consensus estimate of $7,524 million. However, the top line dipped 1.7% from the year-ago quarter due to store closures. Comps increased 1.8%, with growth recorded across all nameplates.

M’s go-forward business comps, including both go-forward locations and digital platforms across all nameplates, increased 2% on an owned-plus-licensed-plus-marketplace basis.

Net credit card revenues were $205 million, up 17.1% year over year, driven by the company’s healthy credit portfolio. The metric represented 2.7% of net sales, up 40 basis points from the year-ago quarter.

Macy’s Media Network revenues were $72 million, up 12.5% year over year. The metric represented 0.9% of net sales, up 10 basis points 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-plus-licensed-plus-marketplace basis, while go-forward comps rose 0.6%. Reimagine 125 locations comps increased 0.9%.

At the Bloomingdale’s brand, comps increased 9.9% on an owned-plus-licensed-plus-marketplace basis, marking its sixth consecutive quarter of growth.

Comps at the Bluemercury brand rose 1.3% on an owned-plus-licensed-plus-marketplace basis, reflecting continued steady growth.

Insight Into Macy’s Margins & Expenses

The gross margin in the fiscal fourth quarter was 35.2%, which beat our estimate of 34.8%. This represented a decline of 50 basis points from last year, driven by an approximately 60-basis-point impact of tariffs, which was in line with the company’s expectations.

The Zacks Rank #4 (Sell) company reported selling, general and administrative (SG&A) expenses of $2.26 billion, down 1% year over year due to benefits from store closures, ongoing cost-control measures and end-to-end savings initiatives. The positives were partly offset by continued investments in the go-forward business, including Reimagine 125 locations, Bloomingdale’s and digital capabilities across nameplates. As a percentage of the total revenues, SG&A expenses increased 10 basis points to 29.8%. We estimated SG&A expenses to decrease 3.1% year over year in the fiscal fourth quarter.

Macy’s reported adjusted EBITDA of $840 million, down 7% from $903 million in the year-ago quarter. The adjusted EBITDA margin was 10.6%, down 70 basis points year over year.

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

The company ended fiscal 2025 with cash and cash equivalents of $1.25 billion, and total debt of $2.4 billion. The company does not face any significant long-term debt maturities until 2030. Merchandise inventories decreased 1.3% on a year-over-year basis and the company considers both the mix and volume of its inventory to be well aligned as it enters fiscal 2026.

In fiscal 2025, net cash provided by operating activities was $1.43 billion, while the free cash flow amounted to $0.8 billion, reflecting strong cash generation.

Asset sale gains totaled $3 million in the fiscal fourth quarter, down from $41 million in the prior year due to fewer transactions. The company continues to focus on closing underperforming stores with a disciplined approach to such actions, while its strong balance sheet offers the flexibility to maximize cash value from its assets.

In the fiscal fourth quarter, the company repurchased 2.3 million shares for $50 million, bringing the total share repurchases for the full fiscal year to 17.7 million shares for $251 million. As of the end of fiscal 2025, $1.1 billion remained available under its $2-billion share repurchase authorization.

M Stock's Past 3-Month Performance

Image Source: Zacks Investment Research

Sneak-Peek Into Macy’s FY26 Guidance

The company has provided its annual fiscal 2026 outlook, acknowledging macroeconomic and geopolitical uncertainties that may impact discretionary spending. Management has adopted a cautious approach, maintaining flexibility to navigate shifts in the external environment. The guidance assumes a higher tariff impact in the first half of the year, particularly in the fiscal first quarter, and reflects continued investments in Reimagine 200 locations and luxury nameplates to drive long-term growth.

Macy’s expects net sales of $21.4-$21.65 billion, whereas it reported $21.8 billion in fiscal 2025. Comparable sales (owned-plus-licensed-plus-marketplace) are projected between a decline of 0.5% and growth of 0.5%, whereas it registered a 1.5% increase in fiscal 2025.

Adjusted EBITDA as a percentage of total revenues is anticipated between 7.7% and 7.9%, whereas it reported 7.9% in fiscal 2025. Adjusted earnings per share are expected to be $1.90-$2.10, whereas it delivered $2.15 in fiscal 2025. The guidance incorporates the impacts of fiscal 2025 store closures, which reduced annual net sales by approximately $145 million. It also excludes future share repurchases under the company’s existing authorization.

M shares have lost 28.2% in the past three months compared with the industry’s 21.2% decline.

Stocks to Consider

We have highlighted three better-ranked stocks in the retail space, namely, Deckers Outdoor Corporation (DECK Quick QuoteDECK - Free Report) , Tapestry, Inc. (TPR Quick QuoteTPR - Free Report) and FIGS Inc. (FIGS Quick QuoteFIGS - Free Report) .

Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Deckers’ current fiscal-year earnings and sales indicates growth of 8.5% and 8.9%, respectively, from the year-ago actuals. DECK delivered a trailing four-quarter average earnings surprise of 36.9%.

Tapestry, which was formerly known as Coach, Inc., is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. It currently sports a Zacks Rank of 1.

The Zacks Consensus Estimate for Tapestry’s current fiscal-year earnings and sales implies growth of 26.5% and 11.2%, respectively, from the year-ago actuals. TPR delivered a trailing four-quarter average earnings surprise of 12.8%.

FIGS is a direct-to-consumer healthcare apparel and lifestyle brand, and it currently has a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 187.5%, on average. 

The Zacks Consensus Estimate for FIGS’s current financial-year sales indicates growth of 11.4% from the year-ago reported number.