Macy’s Issues ‘Prudent’ 2026 Guidance on Geopolitical Risks

Macy’s Inc. forecast full-year comparable sales and profit below analysts’ expectations, a sign that the company is taking a cautious approach to gauging how US consumers will respond to the Iran war and tariffs.

The department-store operator expects adjusted diluted earnings per share to range between $1.90 and $2.10, below the average estimate of analysts compiled by Bloomberg. Macy’s also said it expects comparable sales, which measures revenue from stores that have been open at least a year and from online, to increase as much as 0.5 percent, also below Bloomberg estimates.

Both forecasts are a decline compared with what the company reported in the fiscal year that ended on Jan. 31. The guidance excludes gains from real estate sales, a change the company made last month, and it’s not clear that all analysts have updated their estimates to account for that.

Shares of Macy’s rose 4.3 percent at 7:01 a.m. in New York. The stock had declined about 23 percent this year through Tuesday’s close, worse than the S&P 500 Index’s roughly 1.9 percent dip.

In a statement, the company said its guidance for the current fiscal year is “prudent” because of “macroeconomic and geopolitical factors that could influence discretionary spend.” As the largest US department-store chain, Macy’s is closely watched to gauge consumers’ appetite to spend on apparel, accessories, housewares and other discretionary items. Higher tariffs will raise costs more in the first half of the year than in the second, the company added.

Macy’s issued the cautious forecast as it reported net sales, comparable sales and profit that all beat Wall Street’s estimates in the quarter that ended Jan. 31. At Bloomingdale’s, the comparable sales spiked nearly 10 percent during that time.

The company’s high-end department store has benefited from luxury shoppers seeking alternatives while rival Saks Global Enterprises, which owns Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman, winds its way through a bankruptcy. Also, wealthier consumers have been spending more freely than the mass-market shoppers who frequent the Macy’s nameplate. At cosmetics chain Bluemercury, which Macy’s owns, comparable sales rose 1.3 percent.

“Bloomingdale’s exceptional performance underscores its ability to elevate the customer experience and capture demand,” chief executive officer Tony Spring said in a statement.

Since he took the helm two years ago, Spring has been working to turn Macy’s into a smaller and more profitable company. He’s closing 150 underperforming Macy’s stores and investing more in the displays, staff and merchandise at the ones that remain open. He’s also selling off real estate.

And Spring is focused on expanding the number of luxury brands on offer at Bloomingdale’s, while also opening smaller-format stores.

Macy’s earned $3 million from selling real estate assets in the fiscal fourth quarter, down from $41 million in the prior period. “The company remains committed to closing underproductive stores,” it said in the statement, and “taking a disciplined approach to transactions.”

While most analysts and many investors have applauded Spring’s efforts as a common–sense approach to try to reverse years of falling or lackluster sales — a fate faced by many US department stores — they’re uncertain it will be enough.

“Rightsizing the store base should improve long-term profitability,” Telsey Advisory Group analyst Dana Telsey wrote in a recent research report. Short term, sales and profitability growth “remains more limited in our view amid macro pressures, traffic and tariff headwinds, and a competitive and potentially promotional retail landscape.”

By Jeannette Neumann

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