Macy's raises annual outlook as luxury demand lifts sales growth

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Dan Blystone

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Macy's raises annual outlook as luxury demand lifts sales growth — Macy’s luxury sales surge

Higher-end spending is supporting Macy's turnaround as the department store operator records its first quarterly sales increase in nearly four years. Strength at Bloomingdale's and Bluemercury helps offset a more cautious backdrop for lower-income shoppers amid broader U.S. economic uncertainty.

Highlights

Macy's first-quarter sales rose 1.8% to $4.68 billion, beating the $4.61 billion estimate and ending 15 quarters of declines.
Macy's raised fiscal 2026 net sales guidance to $21.50–$21.75 billion and adjusted EPS forecast to $2–$2.20 after a 13-cent Q1 EPS.
Bloomingdale's comparable sales surged 10.2% and Bluemercury 6.4%, supporting Macy's luxury-focused turnaround and premarket share gains of about 4%.

Forecast upgrade and quarterly performance

As reported by Reuters, Macy's raises its annual forecasts after reporting first-quarter sales growth of 1.8% to $4.68 billion, ending 15 straight quarters of declines and topping analysts' average estimate of $4.61 billion compiled by LSEG.

The company now expects fiscal 2026 net sales of $21.50 billion to $21.75 billion, up from its prior outlook of $21.40 billion to $21.65 billion. It also lifts its annual adjusted earnings per share forecast to $2 to $2.20 from $1.90 to $2.10, while adjusted first-quarter earnings per share come in at 13 cents.

Shares are up about 4% in choppy premarket trading after the results and the sales beat.

Luxury banners support turnaround strategy

Macy's says demand for high-end apparel and accessories is driving the improvement, particularly at Bloomingdale's, where comparable sales jump 10.2%. Comparable sales rise 6.4% at Bluemercury, while Macy's namesake stores post a 1.6% increase.

Chief Executive Tony Spring says customers are responding as the company continues its "Bold New Chapter" turnaround plan. The strategy centers on higher-end labels, expanding full-price sales, reinvesting in stronger locations and closing underperforming stores.

The performance reflects a K-shaped recovery in U.S. consumer spending, with affluent shoppers continuing to spend on discretionary and luxury goods even as lower-income households pull back. The same pattern has also appeared elsewhere in the sector, with Capri Holdings issuing an upbeat annual profit target last month and Ralph Lauren beating quarterly sales estimates.

Our earlier article on the Iran war’s economic fallout examined how higher gasoline prices and inflation concerns were pushing U.S. shoppers—especially lower-income households—to become more selective and shift spending from discretionary items to essentials ahead of the key second-half retail season. We also highlighted the resulting K-shaped demand pattern, where higher-income consumers keep buying apparel, accessories and beauty products while budget-constrained shoppers pull back, increasing the risk for apparel chains and department stores if fuel costs stay elevated.

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