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Macy's Luxury Business Emerges as Key Growth Engine Heading Into FY26
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Key Takeaways
Bloomingdale's posted 9.9% y/y comparable sales growth in Q4, led by a record holiday season.
M plans to expand Bloomingdale's in the underpenetrated markets with higher capital spending in FY26.
Bluemercury comparable sales grew 1.3% y/y in Q4, driven by strong skincare and fragrance demand.
Macy’s Inc.’s (M - Free Report) luxury divisions delivered a strong finish to fiscal 2025, with fourth-quarter performance reinforcing the company’s premium positioning and growth momentum. Bloomingdale’s led the portfolio with 9.9% comparable sales growth in the fiscal fourth quarter, benefiting from its best holiday season on record. Strength was broad-based across categories, such as designer apparel, fragrances and fine jewelry, supported by strong customer response to curated assortments and elevated in-store experiences.
The fiscal fourth quarter also highlighted the effectiveness of Macy’s luxury strategy centered on brand elevation and experiential retail. Initiatives like exclusive collaborations, including partnerships with premium brands, and high-impact marketing campaigns drove engagement and traffic. The performance reflected strong execution across both physical stores and digital channels, underscoring the resilience of higher-income consumers within the luxury segment.
Bluemercury complemented this momentum, delivering 1.3% comparable sales growth in the fiscal fourth quarter, driven by continued strength in skincare and fragrances. Demand for high-end dermatological brands and niche luxury offerings remained robust, while new store formats and localized assortments helped deepen customer engagement and expand client bases.
In fiscal 2026, Macy’s expects its luxury divisions to remain a core growth engine. Management emphasized continued investments in Bloomingdale’s, including expansion opportunities in underpenetrated markets and increased capital allocation to support store growth and brand partnerships. Importantly, Macy’s noted that Bloomingdale’s currently operates in only 14 of the top 50 U.S. markets, leaving significant whitespace for growth through small-format Bloomies stores and outlets, with increased capital spending planned for this division.
Macy’s plans to build on its luxury momentum through enhanced omnichannel experiences, improved assortments and deeper vendor relationships. With a loyal, higher-income customer base showing resilience, the luxury segment is well-positioned to sustain growth and play a critical role in driving the company’s long-term profitability and strategic transformation.
Macy’s Price Performance, Valuation & Estimates
Shares of the company have surged 65.9% in the past year compared with the industry’s 81.9% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, Macy’s is trading at a forward 12-month price-to-sales ratio of 0.22X, down from the industry average of 0.43X. M has a Value Score of A.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Macy’s fiscal 2026 earnings implies a year-over-year decline of 7.8%, whereas the same for fiscal 2027 indicates an uptick of 5.5%. Estimates for fiscal 2026 and 2027 have been revised southbound by 1 cent and 18 cents, respectively, in the past 30 days.
Image Source: Zacks Investment Research
Macy’s currently has a Zacks Rank #3 (Hold).
Key Picks
We have highlighted three better-ranked stocks in the retail space, namely FIGS Inc. (FIGS - Free Report) , Tapestry, Inc. (TPR - Free Report) and Deckers Outdoor Corporation (DECK - Free Report) .
FIGS is a direct-to-consumer healthcare apparel and lifestyle brand, and it currently sports a Zacks Rank of 1 (Strong Buy). The company delivered a trailing four-quarter earnings surprise of 187.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FIGS’ current financial-year sales and earnings indicates growth of 11.7% and 15.8%, respectively, from the year-ago reported numbers.
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 flaunts a Zacks Rank #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%.
Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It has a Zacks Rank #2 (Buy) at present.
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%.
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Macy's Luxury Business Emerges as Key Growth Engine Heading Into FY26
Key Takeaways
Macy’s Inc.’s (M - Free Report) luxury divisions delivered a strong finish to fiscal 2025, with fourth-quarter performance reinforcing the company’s premium positioning and growth momentum. Bloomingdale’s led the portfolio with 9.9% comparable sales growth in the fiscal fourth quarter, benefiting from its best holiday season on record. Strength was broad-based across categories, such as designer apparel, fragrances and fine jewelry, supported by strong customer response to curated assortments and elevated in-store experiences.
The fiscal fourth quarter also highlighted the effectiveness of Macy’s luxury strategy centered on brand elevation and experiential retail. Initiatives like exclusive collaborations, including partnerships with premium brands, and high-impact marketing campaigns drove engagement and traffic. The performance reflected strong execution across both physical stores and digital channels, underscoring the resilience of higher-income consumers within the luxury segment.
Bluemercury complemented this momentum, delivering 1.3% comparable sales growth in the fiscal fourth quarter, driven by continued strength in skincare and fragrances. Demand for high-end dermatological brands and niche luxury offerings remained robust, while new store formats and localized assortments helped deepen customer engagement and expand client bases.
In fiscal 2026, Macy’s expects its luxury divisions to remain a core growth engine. Management emphasized continued investments in Bloomingdale’s, including expansion opportunities in underpenetrated markets and increased capital allocation to support store growth and brand partnerships. Importantly, Macy’s noted that Bloomingdale’s currently operates in only 14 of the top 50 U.S. markets, leaving significant whitespace for growth through small-format Bloomies stores and outlets, with increased capital spending planned for this division.
Macy’s plans to build on its luxury momentum through enhanced omnichannel experiences, improved assortments and deeper vendor relationships. With a loyal, higher-income customer base showing resilience, the luxury segment is well-positioned to sustain growth and play a critical role in driving the company’s long-term profitability and strategic transformation.
Macy’s Price Performance, Valuation & Estimates
Shares of the company have surged 65.9% in the past year compared with the industry’s 81.9% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, Macy’s is trading at a forward 12-month price-to-sales ratio of 0.22X, down from the industry average of 0.43X. M has a Value Score of A.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Macy’s fiscal 2026 earnings implies a year-over-year decline of 7.8%, whereas the same for fiscal 2027 indicates an uptick of 5.5%. Estimates for fiscal 2026 and 2027 have been revised southbound by 1 cent and 18 cents, respectively, in the past 30 days.
Image Source: Zacks Investment Research
Macy’s currently has a Zacks Rank #3 (Hold).
Key Picks
We have highlighted three better-ranked stocks in the retail space, namely FIGS Inc. (FIGS - Free Report) , Tapestry, Inc. (TPR - Free Report) and Deckers Outdoor Corporation (DECK - Free Report) .
FIGS is a direct-to-consumer healthcare apparel and lifestyle brand, and it currently sports a Zacks Rank of 1 (Strong Buy). The company delivered a trailing four-quarter earnings surprise of 187.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FIGS’ current financial-year sales and earnings indicates growth of 11.7% and 15.8%, respectively, from the year-ago reported numbers.
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 flaunts a Zacks Rank #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%.
Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It has a Zacks Rank #2 (Buy) at present.
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%.