Image Courtesy of Macy’s
September 19, 2025
Will Macy’s Earnings Beats Persist, and Can it ‘Escape the Auction Block’?
Macy’s has been written off as a serious contender by some analysts, compared perhaps accurately to “an injured wildebeest stalked by lions,” by Forbes contributor Greg Petro in a recent outline of the retailer’s recent fortunes.
The overall report card leading up to the most recent Q2 earnings is fairly grim: Macy’s hiked prices to offset tariff costs, per CNBC, after closing nearly half of its peak number of 850 stores. And as Petro put it, jumpy investors have been champing at the bit for the retailer to sell off some of its more valuable assets, potentially spinning off Bloomingdale’s and Bluemercury — both highlights of the company’s current portfolio, and both outperforming — in order to capitalize on what’s hot in terms of sales figures.
Despite cutting its full-year guidance in Q1 and indicating a lack of certainty concerning its ability to generate sales moving forward, CEO Tony Spring appeared stoic, perhaps even optimistic, over Macy’s concerted turnaround.
“We’re just well positioned right now for the environment we’re in to take share, to deliver for our customers and to provide a better experience,” Spring told CNBC following the early September Q2 report dropped.
“Tariffs are real. It’s a component of the business, but we have tail winds that we are trying to mitigate against those headwinds,” Spring said.
“That’s a better customer experience, that’s a newer assortment, that’s less redundancy in our assortment, that’s now a business that’s growing across all three nameplates in our portfolio and a healthy inventory position going into the fall season,” he added.
Macy’s Appears (Somewhat) Resistant To Leverage Real Estate, Doubling-Down on Staying in the Game
As Petro noted, Macy’s appears resistant to leverage its real estate holdings in terms of selling off assets, instead opening a Bloomingdale’s outlet offshoot, Bloomies, with Bloomingdale’s pegging a 5.7% comparable sales growth during its relatively sunny Q2 report.
Speaking of that report, Macy’s raised both full-year earnings and sales guidance — expecting earnings of $1.70-$2.05 per share versus $1.60-$2 previously, alongside revenue of $21.15 billion-$21.45 billion versus $21-$21.4 billion. Stock prices surged upward over 20% over two days following the Sept. 3 news, from $13.49 on Sept. 2 to $17.24 on Sept. 4, and rest just above that mark (at ~$17.58) as of Sept. 18.
On the real estate front, however, as the Forbes contributor noted, while an outright sale isn’t necessarily in the retailer’s immediate future, a more complex scheme could be at play.
“One of the tactics the company is reportedly considering, which could justify a higher stock price, would be the sale and leaseback of its real estate portfolio. In the meantime, the company has recently repurchased more than $150 million worth of its stock and continues to pay a quarterly dividend that currently yields a return of about 4%,” Petro wrote.
Petro concluded his analysis by noting that the future for Macy’s remained uncertain, which seems a prevalent take, but also that Macy’s growth pattern — from the company that “invented the department store” to one which gobbled up locally-owned department stores and quickly rebranded them under its own banner, eroding customer loyalty in the process — had contributed to many of its woes in 2025.
Discussion Questions
Will Macy’s see a continued turnaround story, or are its recent successes not substantial enough to merit this consideration?
What should, or will, happen to Bloomingdale’s and Bluemercury in the event that Macy’s faces the prospect of a sale?
Are there any levers left for Macy’s to pull in order to boost itself back into retail prominence? If so, which?
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Nicholas Morine
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Continued turnaround ?!?! When did it start?
I don’t think any of us really know where the macy*s story ends: yes it’s still profitable – which is hardly inconsequential – and with $20Bish in revenue it’s not some trivial company. But if it were to just go away, I’m not sure how different the retail landscape would be. The fact that they call Blue Mercury, a small, boutiquish guest in their corporate house – i.e. hardly comparable to the full-line stores – “one of our three nameplates” tells me they don’t have a very clear idea what they’re about themselves.
Macy’s is making progress on improving the in-store experience and the propostion. Some better numbers are coming through, but the gains remain quite soft. Profit is also currently being propped up by credit card revenue, rather than retail operations. So, there is lot more work to do before Macy’s can declare that it is firmly back on track. All that said, effort is being made so the company is on a way better trajectory than its has been for quite some time.
Neil, a few years ago, we discussed that Macy’s was re-inventing their stores with a better, smaller footprint and an emphasis on customer service. Where is Macy’s in this re-invention process?
Macy’s is representative of the fundamental mismatch between legacy retail models and modern consumer behavior, overlaid with an asset monetization opportunity that could either save or doom the company.
Difficult to use terms like turnaround when we’re really witnessing a managed decline with strategic optionality. There’s a race here for Macy’s to architect a sustainable, smaller-footprint portfolio future before activist investors force a fire sale. When credit card fees prop you up, you’re becoming a financial services company that happens to operate retail locations.
Macy’s survival depends on its leadership treating it as a portfolio of distinct businesses rather than a unified retail operation. The three-nameplate strategy of Macy’s (omnichannel integration and experience design), Bloomingdale’s (luxury anchor), and BlueMercury (high-touch, experiential beauty platform) offers diversification and a path forward if executed correctly and with the proper non-traditional retail metrics:
1. Convert underperforming square footage into mixed-use developments, keeping strategic retail footprints while monetizing land value.
2. With decades of customer purchase history across multiple demographics, Macy’s could become a retail intelligence platform for other brands—essentially licensing their customer insights.
3. Instead of trying to compete with Amazon on logistics, partner with them while focusing on what physical retail does best—discovery, try-before-buy, and the social aspects Amazon can’t replicate.
Macy’s is really a tale of two different retailers. Online, Macy’s is a dream, with frequent sales and effortless delivery. In person, though, it’s a hot mess, with disheveled displays and missing sizes. I wish they could get the execution right.
The challenges Macy’s face is not only specific to Macy’s but to the entire department store sector. Mall based retail in general have become less relevant and enticing to consumers, globally. In the U.S., being the anchor tenant of large malls used to be an advantage of Macy’s (and its department store competitors). Now, it’s a liability.
Short of any drastic change to the business model and value propositions, I don’t see a meaningful path forward for Macy’s.
Simply put, the consumers have moved on.
We have been writing about Macy’s turnaround for years. The progress is always the same. As Mohamed writes, “Macy’s is representative of the fundamental mismatch between legacy retail models and modern consumer behavior…”.
C’mon, Macy’s. Stop pretending and do something significant to maximize current stockholder value. Spin off Bloomingdale’s before it too withers. Spin-off Blue Mercury, which doesn’t need to be part of a corporate behemoth to be successful. Sell the famous Herold Square store to Disney and let them turn it into a “Happy Place”.
What do you do with the remaining stores? Milk them!
For the last 15 years, Macy’s has been discussing the moves it’s making to turn the company around. The issue remains: the model they’re perpetuating doesn’t resonate with younger consumers. Until they research and implement foundational changes in their approach to the market, who their target customers are, and how they’re going to engage them, nothing they can do is going to reverse fortunes at Macy’s.
Gary, I don’t think the model resonates with older consumers.
Macy’s recent earnings show encouraging signs—guidance revisions upward, comparable‐sales growth at Bloomingdale’s, and a trimmer store footprint that reduces fixed cost burdens. That said, many of its successes so far seem incremental rather than transformational; they mitigate downside risk but don’t yet clearly reestablish Macy’s at the top tier of retail innovation or relevance. The headwinds—tariffs, changing consumer behavior, logistics cost, real estate burdens—remain strong, and Macy’s will need to lean into deeper change to avoid being outpaced.
If Macy’s were to face a sale, Bloomingdale’s and Bluemercury are likely to be prime assets for spin‐off or sale: they outperform relative to Macy’s core, they appeal to more premium and niche consumers, and might attract buyers seeking established luxury or beauty platforms. Keeping them under Macy’s could drag on performance if they are subsidizing weaker parts; carving them out might both unlock value and allow each brand to focus on its strengths.
There are levers Macy’s can still pull to recapture prominence. Potential moves include further optimizing its real estate portfolio—closing or repurposing underperforming stores, doing sale‐and‐leaseback deals, or converting space into mixed‐use or experiential formats. Improving the in-store customer experience (layout, service, inventory execution) to match what it does well online; sharpening assortment so it better matches consumer trends rather than relying on past patterns; leveraging its loyalty or credit card data more strategically; and investing in omnichannel and beauty or lifestyle adjacencies where growth could be strong. If it executes on those fronts, Macy’s could turn near‐term momentum into durable relevance.
I’ve had discussions with legacy retailers who know the problem but the $ or dedication isn’t there. It is much sexier to put up a bunch of vendor materials than do the hard work like Starbucks is trying to do to fix the connection problem on the floor.