A month has gone by since the last earnings report for Macy's (M Quick QuoteM - Free Report) . Shares have added about 5.7% in that time frame, underperforming the S&P 500.

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

Macy’s Beats on Q4 Earnings, Posts Positive Comps Across Nameplates

Macy’s 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.

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%. 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 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%. 

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.

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.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -89.8% due to these changes.

VGM Scores

At this time, Macy's has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated 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 downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Macy's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Macy's is part of the Zacks Retail - Regional Department Stores industry. Over the past month, Kohl's (KSS Quick QuoteKSS - Free Report) , a stock from the same industry, has gained 11.5%. The company reported its results for the quarter ended January 2026 more than a month ago.

Kohl's reported revenues of $5.17 billion in the last reported quarter, representing a year-over-year change of -4.2%. EPS of $1.07 for the same period compares with $0.95 a year ago.

Kohl's is expected to post a loss of $0.18 per share for the current quarter, representing a year-over-year change of -38.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +2.2%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Kohl's. Also, the stock has a VGM Score of A.