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M faces tariff, fuel and inventory pressures even as luxury banners and digital sales grow.
Macy's, Inc. (M - Free Report) is showing better execution as its Bold New Chapter strategy gains operating traction across stores, digital and luxury banners. The key issue for investors is whether these gains can hold against pressure from costs and uneven discretionary demand.
The latest results show progress, but not a clean break from risk. Macy’s still has to protect margins while reshaping its store base and funding growth initiatives.
Macy’s Strategy Starts Showing Results
Bold New Chapter is moving beyond planning and into measurable operating performance. In the first quarter of fiscal 2026, enterprise comparable sales increased 3%, marking Macy’s strongest first-quarter comparable sales performance in four years.
All three nameplates delivered positive growth, and management raised its 2026 outlook after net sales, comparable sales, adjusted EBITDA and adjusted earnings per share exceeded expectations. The bigger point is execution quality, not just stabilization. Better merchandising, service and store standards give the turnaround a firmer base.
The Reimagine initiative is becoming Macy’s most visible store-level playbook. Macy’s expanded the program by 75 locations in the first quarter, bringing the total to 200 stores.
These locations now represent nearly 60% of the go-forward Macy’s store fleet and accounted for about 75% of fiscal 2025 go-forward Macy’s store sales. Reimagine locations posted 2.4% comparable sales growth and have been positive in eight of the past nine quarters, while customer engagement benefited from record first-quarter Net Promoter Score results at the Macy’s nameplate.
Macy’s Luxury Banners Add Stability
Bloomingdale’s and Bluemercury are improving Macy’s portfolio mix. Bloomingdale’s comparable sales rose 10.2% in the first quarter and reached the highest first-quarter sales volume in its 154-year history.
Bluemercury comparable sales increased 6.4%, supported by makeup, dermatological skincare and fragrances. The two banners help offset choppier trends at the core Macy’s banner and give the company exposure to customers and categories where differentiation matters.
M Digital and AI Expand Macy’s Reach
Digital remains central to Macy’s omnichannel push. Digital sales represented 34% of net sales in the first quarter, up from 33% a year earlier.
The company is also using technology in practical ways. The China Grove distribution facility is showing early automation benefits in service levels and cost efficiency, while inventory forecasting tools and Ask Macy’s, an AI-powered shopping assistant, are designed to reduce friction and support conversion.
How Macy’s Risks Could Slow Progress
Cost pressure remains the biggest constraint. Tariffs reduced gross margin by about 30 basis points in the first quarter, while second-quarter guidance assumes tariffs and fuel costs will cut gross margin by 20-40 basis points and adjusted earnings per share by 3-4 cents.
Store closures also weigh on reported sales. The 14 non-go-forward stores closed at the end of fiscal 2025 reduced first-quarter sales by about $40 million, and fiscal 2025 closures are expected to create a $145-million annual sales headwind. Inventory rose 3.6% to $4.8 billion, adding markdown risk if demand weakens. Competition from Kohl's Corporation (KSS - Free Report) and Target Corporation (TGT - Free Report) reinforces the need for Macy’s to sharpen value, service and omnichannel execution.
Image Source: Zacks Investment Research
What Macy’s Signals Mean for Investors
Macy’s turnaround signals are improving, but the investment case still calls for balance. Comparable sales growth, luxury momentum and Reimagine traction support a more constructive view of the business.
M currently carries a Zacks Rank #3 (Hold), which fits a measured stance. The Rank points to a stock that may be appropriate to hold while investors monitor estimate trends, margin protection and execution consistency. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
No Value Score, Growth Score, Momentum Score or VGM Score is provided for Macy’s. That leaves investors leaning more heavily on the operating trade-offs: better store and luxury execution on one side, and tariffs, freight, inventory and discretionary-demand risks on the other.
View the Zacks #1 Rank List
Image: Bigstock
Macy's Stock Outlook Improves as Bold New Chapter Gains Traction
Key Takeaways
Macy's, Inc. (M - Free Report) is showing better execution as its Bold New Chapter strategy gains operating traction across stores, digital and luxury banners. The key issue for investors is whether these gains can hold against pressure from costs and uneven discretionary demand.
The latest results show progress, but not a clean break from risk. Macy’s still has to protect margins while reshaping its store base and funding growth initiatives.
Macy’s Strategy Starts Showing Results
Bold New Chapter is moving beyond planning and into measurable operating performance. In the first quarter of fiscal 2026, enterprise comparable sales increased 3%, marking Macy’s strongest first-quarter comparable sales performance in four years.
All three nameplates delivered positive growth, and management raised its 2026 outlook after net sales, comparable sales, adjusted EBITDA and adjusted earnings per share exceeded expectations. The bigger point is execution quality, not just stabilization. Better merchandising, service and store standards give the turnaround a firmer base.
Macy's, Inc. Price, Consensus and EPS Surprise
Macy's, Inc. price-consensus-eps-surprise-chart | Macy's, Inc. Quote
M Reimagine Stores Lift Customer Engagement
The Reimagine initiative is becoming Macy’s most visible store-level playbook. Macy’s expanded the program by 75 locations in the first quarter, bringing the total to 200 stores.
These locations now represent nearly 60% of the go-forward Macy’s store fleet and accounted for about 75% of fiscal 2025 go-forward Macy’s store sales. Reimagine locations posted 2.4% comparable sales growth and have been positive in eight of the past nine quarters, while customer engagement benefited from record first-quarter Net Promoter Score results at the Macy’s nameplate.
Macy’s Luxury Banners Add Stability
Bloomingdale’s and Bluemercury are improving Macy’s portfolio mix. Bloomingdale’s comparable sales rose 10.2% in the first quarter and reached the highest first-quarter sales volume in its 154-year history.
Bluemercury comparable sales increased 6.4%, supported by makeup, dermatological skincare and fragrances. The two banners help offset choppier trends at the core Macy’s banner and give the company exposure to customers and categories where differentiation matters.
M Digital and AI Expand Macy’s Reach
Digital remains central to Macy’s omnichannel push. Digital sales represented 34% of net sales in the first quarter, up from 33% a year earlier.
The company is also using technology in practical ways. The China Grove distribution facility is showing early automation benefits in service levels and cost efficiency, while inventory forecasting tools and Ask Macy’s, an AI-powered shopping assistant, are designed to reduce friction and support conversion.
How Macy’s Risks Could Slow Progress
Cost pressure remains the biggest constraint. Tariffs reduced gross margin by about 30 basis points in the first quarter, while second-quarter guidance assumes tariffs and fuel costs will cut gross margin by 20-40 basis points and adjusted earnings per share by 3-4 cents.
Store closures also weigh on reported sales. The 14 non-go-forward stores closed at the end of fiscal 2025 reduced first-quarter sales by about $40 million, and fiscal 2025 closures are expected to create a $145-million annual sales headwind. Inventory rose 3.6% to $4.8 billion, adding markdown risk if demand weakens. Competition from Kohl's Corporation (KSS - Free Report) and Target Corporation (TGT - Free Report) reinforces the need for Macy’s to sharpen value, service and omnichannel execution.
Image Source: Zacks Investment Research
What Macy’s Signals Mean for Investors
Macy’s turnaround signals are improving, but the investment case still calls for balance. Comparable sales growth, luxury momentum and Reimagine traction support a more constructive view of the business.
M currently carries a Zacks Rank #3 (Hold), which fits a measured stance. The Rank points to a stock that may be appropriate to hold while investors monitor estimate trends, margin protection and execution consistency. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
No Value Score, Growth Score, Momentum Score or VGM Score is provided for Macy’s. That leaves investors leaning more heavily on the operating trade-offs: better store and luxury execution on one side, and tariffs, freight, inventory and discretionary-demand risks on the other.