Macy's, Inc. — Second Quarter 2026 Earnings Summary

Financial Performance

• Net sales increased 1.1% year-over-year to $4.9 billion for the second quarter of 2026; net sales grew 1.9% excluding the impact of fiscal 2025 store closures.
• Comparable sales rose 2.7% year-over-year, with go-forward comparable sales up 2.8%.
• GAAP diluted EPS was $0.62, a 100% increase from $0.31 in the second quarter of 2025.
• Adjusted diluted EPS was $0.63, a 14% increase from $0.35 in the second quarter of 2025, excluding a $0.23 net tariff refund benefit.
• Gross margin rate increased 180 basis points to 41.5%; excluding a 180 basis point benefit from net tariff refunds, the rate was up 10 basis points.
• SG&A expense as a percent of total revenue decreased 20 basis points to 38.7%, with absolute expenses rising to $1.96 billion.
• GAAP net income was $169 million (3.3% of revenue) compared to $87 million (1.7% of revenue) in the prior year period.
• Adjusted net income was $170 million (3.4% of revenue) compared to $98 million (2.0% of revenue) in the prior year period.
• Adjusted EBITDA was $457 million (9.0% of revenue), up from $373 million (7.5% of revenue) in the second quarter of 2025.
• Cash and cash equivalents ended the quarter at $1.3 billion, up from $0.8 billion in the prior year.
• Total debt was $2.4 billion as of the end of the second quarter of 2026, with no material long-term debt maturities until 2030.
• Merchandise inventories increased 2.5% year-over-year to $4.449 billion.

Guidance and Future Outlook

• The company raised its full-year fiscal 2026 guidance for net sales, comparable sales, adjusted EBITDA, and adjusted diluted EPS.
• Revised full-year 2026 net sales guidance is $21.675 billion to $21.825 billion, up from the previous range of $21.5 billion to $21.75 billion.
• Revised full-year 2026 comparable sales change guidance is 1.0% to 1.5%, up from the previous range of 0.5% to 1.2%.
• Revised full-year 2026 adjusted EBITDA as a percent of total revenue guidance is 7.8% to 8.0%, up from the previous range of 7.7% to 7.9%.
• Revised full-year 2026 adjusted diluted EPS guidance is $2.15 to $2.35, up from the previous range of $2.00 to $2.20.
• Guidance incorporates approximately $0.05 per share of tariff refunds flowing through to full-year adjusted diluted EPS.
• Guidance reflects planned reinvestments in Reimagine 200 locations and luxury nameplates to support long-term top-line growth.
• The company notes that macroeconomic and geopolitical factors could influence discretionary spend and maintains a prudent approach to guidance.

Business Segments and Product Lines

• Macy's comparable sales increased 1.1%, with Reimagine 200 locations growing 1.9%.
• Bloomingdale's comparable sales increased 11.3%, marking the brand's highest second-quarter sales volume in history.
• Bluemercury comparable sales increased 6.2%.
• Other revenue totaled $193 million, an increase of $6 million (3.2%) year-over-year.
• Credit card net revenues increased $3 million (2.0%) to $156 million.
• Macy's Media Network net revenue increased $3 million (8.8%) to $37 million.

Market and Competitive Landscape

• Comparable sales were positive at each of the company's nameplates for the fifth consecutive quarter.
• The company faces competitive pressures from specialty stores, general merchandise stores, off-price and discount stores, manufacturers' outlets, the Internet, and catalogs.
• The company continues to focus on scaling exciting brands, assortments, and compelling events and experiences.

Risks and Challenges

• Risks include the ability to successfully implement the Bold New Chapter strategy and realize anticipated benefits.
• Potential impacts from general consumer spending levels, availability and level of consumer debt, and inflation.
• Risks related to labor disputes, regional or global health pandemics, and regional political and economic conditions.
• Potential changes to trade policies and the effect of weather, inventory shortages, and labor shortages.
• Reliance on foreign sources of production and risks related to the disruption of imports.
• Possible systems failures, security breaches, and business, legal, and ethical challenges related to the use of artificial intelligence.

Management Commentary and Tone

• CEO Tony Spring stated that second-quarter performance builds on progress from the Bold New Chapter strategy.
• Management highlighted that investments are driving results across the portfolio, citing outperformance of Reimagine 200 stores, double-digit growth at Bloomingdale's, and solid performance at Bluemercury.
• Management expressed confidence in building a durable foundation for sustainable, profitable growth through disciplined execution and scaling customer-resonating initiatives.
• The tone regarding the second half of the year is focused on scaling what is resonating with customers.

Other Key Points

• The company received all expected IEEPA tariff refunds, totaling $116 million ($98 million in Q2 2026 and $18 million post-quarter end).
• Approximately $20 million of tariff refund proceeds will flow to full-year EPS, while $96 million is being invested in 2026 to support the Bold New Chapter strategy.
• The company returned $51 million to shareholders via dividends in Q2 2026 and $101 million in the first half of 2026.
• A regular quarterly dividend of 19.15 cents per share was declared, payable on October 1, 2026.
• The company repurchased 2.2 million shares for $50 million in Q2 2026, bringing total first-half repurchases to 4.9 million shares for $100 million.
• Approximately $1.0 billion remained under the $2.0 billion share repurchase authorization as of the end of Q2 2026.
• The company has $2.0 billion of available borrowing capacity under its asset-based credit facility.