Macy`s Inc
Q2 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +1.61%.
Did M Beat Earnings? Q2 2025 Results
Macy's posted a sharply better-than-expected profit in Q2 2025, delivering adjusted diluted EPS of $0.53 against a consensus estimate of $0.30, a beat of 76.67%, even as the department store chain continued to navigate softer top-line trends. Revenue of $5.10 billion fell 3.5% year over year and came in just under the $5.12 billion consensus, reflecting a more cautious consumer and a heightened promotional backdrop. The profit outperformance was driven largely by meaningful margin expansion, with gross margin widening 240 basis points to 40.5% of net sales, fueled by lower discounting and favorable shortage trends tied to enhanced asset protection efforts. The company's "Bold New Chapter" strategy showed selective progress, with its priority First 50 Macy's locations posting a second straight quarter of comparable sales growth, even as the broader nameplate declined. Looking ahead, Macy's narrowed its full-year net sales guidance to $22.10 billion to $22.40 billion, acknowledging continued macro headwinds, while reaffirming its adjusted diluted EPS outlook for the year.
- Gross margin expansion of 240 basis points to 40.5% driven by lower discounting and favorable shortage
- Macy's First 50 locations achieved second consecutive quarter of positive comparable sales (up 1.0% owned-plus-licensed)
- Effective SG&A expense control with $7 million reduction
- Delivery expense improvement of 30 basis points from lower shipped volumes and cost savings
- Asset sale gains of $36 million from earlier-than-expected non-go-forward location sale
- Macy's Media Network revenue grew $4 million to $34 million driven by higher advertiser and campaign counts
- Credit card revenues increased $5 million to $125 million
“During the second quarter, we delivered strong earnings performance in a challenging consumer environment. Our colleagues executed with discipline, supporting gross margin expansion and effective expense control throughout the organization. We are seeing signs of our strategy taking root, including two consecutive quarters of positive comparable sales in Macy's First 50 locations. We are encouraged by the early traction of our Bold New Chapter and remain committed to returning Macy's, Inc. to sustainable profitable growth.”
Macy's CEO, on the earnings call
Forward Guidance & Outlook
Macy's updated its full-year 2024 guidance to reflect a more discriminating consumer and heightened promotional environment. Net sales are now expected at $22.1 billion to $22.4 billion (down from $22.3 billion to $22.9 billion). Comparable owned-plus-licensed-plus-marketplace sales are projected to decline approximately 2.0% to 0.5% versus 2023, narrowed from the prior range of down 1.0% to up 1.5%. Adjusted diluted EPS guidance was reaffirmed as unchanged. The company views 2024 as a transition and investment year and will continue to focus on enhancing gross margin and exercising expense control to protect profitability while navigating ongoing macro headwinds.
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Figures from SEC filings and company reports. Not investment advice.