Macy’s will return to positive comparative sales in fiscal 2025, marking what the company calls an “inflection point” after years of contraction.
These earnings results reflect not only improved merchandising, but also structural changes in how the company leverages customer data, store formats and digital channels.
The company’s bold new chapter strategy, now in its second year, has moved from the experimental stage to the scale-up stage. This reimagined store concept was initially tested in 50 locations and now covers 200 stores, representing approximately 60% of Macy’s future fleet and approximately 75% of future store sales.
CFO Tom Edwards described the expansion as part of the company’s gradual transition from iteration to full-scale rollout, with local store leaders being given more autonomy over staffing, events and assortment decisions rather than following a centralized strategy.
“I believe Macy’s has significant under-appreciated capabilities in areas such as data science, AI and technology. Our Macy’s ecosystem is a fundamental strength,” Edwards said on the earnings call.
Focus on AI
The company has identified more than 35 internal AI use cases spanning supply chain, merchandising, marketing, and call centers, as well as customer-facing and omnichannel capabilities. CEO Tony Spring’s statement was deliberately disciplined: “We’re not buying shiny things. We’re solving problems.”
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The company’s newly completed China Grove distribution center is state-of-the-art and automated, providing the infrastructure for continued AI-powered supply chain improvements. Improved delivery times and customer-visible fulfillment forecasts were among the earliest results.
Macy’s Media Network, whose revenue grew 12.5% in the fourth quarter, also sits as part of this data stack, and its Amazon Ads integration announced earlier this year signals external monetization of its loyal audience.
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Splitting consumer cohorts
Macy’s customer base is skewed toward middle- to high-income earners, and that mix provides a strategic buffer. Spring said that while lower-income customers “have more choice,” middle- and higher-income customers remain resilient, and the company expects this momentum to continue this quarter. Despite a slight decline in sales volume, average transaction value is up, in-store traffic is said to be essentially flat apart from weather disruptions, and digital traffic is said to be up across all three nameplates.
The company is also investing in generational acquisitions. The prom activation, held at more than 200 Macy’s and Bloomingdale’s stores, brought high school shoppers into stores through partnerships with content creators and beauty events.
Spring explained that these moments, like the Sweet 16, a wedding, or a first job, are structural entry points rather than one-time promotions. Bloomingdale’s bridal registration data supports this point. Of the approximately 25,000 couples that have signed up in the past year, 75% are Gen Z.
Other highlights from the conference call
- Macy’s now plans to complete the remaining approximately 65 store closures by 2028, with an extended timeline to better time the real estate market and maximize asset value, with total monetization currently expected to be between $650 million and $700 million.
- The credit card portfolio saw a 17.1% increase in other income in the fourth quarter due to net credit improvement, higher application volumes, and tighter integration with digital and in-store acquisitions.
- The company ended its 2025 fiscal year with inventory down 1.3% year-over-year, with more new items and fewer old items, preserving flexibility for free purchases heading into the spring.
- Macy’s introduced 60 new brands in 2025, including Abercrombie Kids, BCBG, and Good American. Bloomingdale’s has added Christian Louboutin, Skims, Vuori, Victoria Beckham Beauty and more.
- The company has focused its 2026 marketing calendar on the 100th anniversary of the Parade and the 50th anniversary of Independence Day fireworks, and internally positions this year as “Celebrations begin at Macy’s.”
Top line results
Macy’s reported fourth-quarter net sales of $7.6 billion, exceeding guidance of $7.35 billion to $7.5 billion, and comparable sales increased 1.8%. Forward comparable sales increased 2%. Bloomingdale’s led the way with like-for-like sales growth of 9.9%. Macy’s future corporate earnings rose 0.6%. Blue Mercury rose 1.3%.
The company returned $448 million to shareholders in fiscal 2025. For fiscal 2026, Macy’s is targeting net sales of $21.4 billion to $21.65 billion, comparable sales of -0.5% to +0.5%, and adjusted diluted EPS of $1.90 to $2.10 (factoring in tariffs of $0.10 to $0.20).
