8-K/A: Macy's Q3 Sales Surge, Raises Full-Year Outlook

Macy's, Inc. reported stronger-than-expected third-quarter results, with net sales and adjusted diluted EPS exceeding guidance, leading to an upward revision of its full-year financial outlook.

Summary

• Macy's, Inc. reported third-quarter 2025 net sales of $4.7 billion, exceeding guidance.
• Comparable sales increased by 2.5% on an owned basis and 3.2% on an owned-plus-licensed-plus-marketplace (O+L+M) basis, marking the strongest growth in 13 quarters.
• Adjusted diluted EPS reached $0.09, surpassing the company's prior guidance range.
• The company revised its full-year 2025 guidance upwards for net sales, comparable sales, Adjusted EBITDA, Core Adjusted EBITDA, and Adjusted diluted EPS.
• A correction was made to the 2025 guidance for Core Adjusted EBITDA as a percent of total revenue, changing the upper end from 7.8% to 7.7%.
• Bloomingdale's achieved its fifth consecutive quarter of comparable sales growth, with an 8.8% increase on an owned basis.
• The "Bold New Chapter" strategy is cited as a driver for momentum and customer resonance.

Sentiment

Score: 8

Explanation: The company reported strong Q3 results exceeding guidance, particularly in comparable sales, and significantly raised its full-year outlook across key metrics. While there was a minor downward correction to the upper end of Core Adjusted EBITDA guidance and lower asset sale expectations, the overall performance and revised outlook are very positive, indicating successful strategic execution and strong momentum heading into the holiday season.

Positives

• Net sales of $4.7 billion exceeded company guidance range.
• Strongest comparable sales growth in 13 quarters, up 2.5% on an owned basis and 3.2% on an O+L+M basis, surpassing guidance.
• Adjusted diluted EPS of $0.09 exceeded prior guidance.
• Bloomingdale's comparable sales up 8.8% (owned) and 9.0% (O+L+M), highest in 13 quarters and fifth consecutive quarter of growth.
• Macy's Reimagine 125 locations outperformed the broader Macy's nameplate with comparable sales up 2.3% (owned) and 2.7% (O+L).
• Bluemercury reported positive comparable sales of 1.1%.
• Credit card net revenues increased by $38 million, or 31.7%, to $158 million, reflecting portfolio health.
• Selling, general and administrative (SG&A) expenses decreased by $40 million to $2.0 billion, and as a percent of total revenue, decreased 90 basis points to 41.2%.
• Adjusted EBITDA increased to $285 million (5.8% of total revenue) from $273 million (5.6%) in Q3 2024.
• Core Adjusted EBITDA increased to $273 million (5.6% of total revenue) from $207 million (4.2%) in Q3 2024.
• Strong balance sheet with $447 million cash and $2.0 billion available borrowing capacity, and no material long-term debt maturities until 2030.
• Company returned $99 million to shareholders in Q3 2025 ($49 million dividends, $50 million share repurchases).
• Full-year 2025 guidance was raised across net sales, comparable sales, Adjusted EBITDA, Core Adjusted EBITDA, and Adjusted diluted EPS.

Negatives

• Net sales, inclusive of store closures, decreased 0.6% to $4.7 billion compared to Q3 2024, primarily due to fiscal 2024 store closures impacting sales by approximately $160 million.
• Gross margin rate declined 20 basis points to 39.4%, primarily due to a 50 basis point tariff impact.
• Asset sale gains decreased significantly to $12 million from $66 million in Q3 2024.
• GAAP net income decreased to $11 million from $28 million in Q3 2024.
• GAAP diluted EPS decreased to $0.04 from $0.10 in Q3 2024.
• The upper end of the 2025 guidance for Core Adjusted EBITDA as a percent of total revenue was slightly lowered from 7.8% to 7.7% in the amendment.
• Expected FY asset sale gains were lowered from $90 million to $60-$65 million, impacting adjusted diluted EPS by approximately $0.07 to $0.08.

Risks

• Ability to successfully implement the "Bold New Chapter" strategy and realize anticipated benefits.
• Competitive pressures from specialty stores, general merchandise stores, off-price and discount stores, manufacturers outlets, the Internet, and catalogs.
• General consumer spending levels, including the impact of the availability and level of consumer debt.
• Conditions to, or changes in the timing of proposed real estate and other transactions.
• Declines in credit card revenues.
• Possible systems failures and/or security breaches.
• Reliance on foreign sources of production, including risks related to the disruption of imports by labor disputes, regional or global health pandemics, regional political and economic conditions, and the effect of trade policies and tariffs.
• Effect of weather, inflation, inventory shortage, and labor shortages.
• Potential for the incurrence of charges in connection with the impairment of tangible and intangible assets, including goodwill.
• Uncertainty regarding the amount and timing of future dividends and share repurchases.
• Ability to execute on strategies and achieve expectations related to environmental, social, and governance matters.

Future Outlook

Macy's, Inc. has raised its full-year 2025 guidance for net sales, comparable sales, Adjusted EBITDA, Core Adjusted EBITDA, and Adjusted diluted EPS, reflecting confidence in its "Bold New Chapter" strategy. The company anticipates the consumer to be more selective in the fourth quarter and assumes current tariffs remain in place, while maintaining flexibility to adapt to market changes. Expected FY asset sale gains were lowered to $60-$65 million, impacting adjusted diluted EPS by $0.07-$0.08.

Management Comments

• "Our third quarter sales were the strongest in 13 quarters, reflecting the acceleration of our Bold New Chapter strategy and demonstrating that the meaningful enterprise-wide changes weve made are resonating with customers." Tony Spring, Chairman and CEO.
• "As we enter the holiday season, we are well-positioned with compelling new merchandise and an omni-channel customer experience that delivers both inspiration and value." Tony Spring.
• "With a strategy rooted in hospitality, our teams are focused on driving long-term, profitable growth." Tony Spring.

Industry Context

Macy's strong third-quarter performance, particularly in comparable sales and the outperformance of its 'Reimagine 125' stores and luxury brands like Bloomingdale's, suggests a successful navigation of a challenging retail environment. The upward revision of full-year guidance indicates resilience and effective strategic execution amidst broader consumer caution and ongoing tariff impacts, positioning the company favorably as it enters the critical holiday shopping season.

Comparison to Industry Standards

• The filing does not provide specific comparisons to other companies or global benchmarks. However, the achievement of the strongest comparable sales growth in 13 quarters and Bloomingdale's fifth consecutive quarter of growth suggests outperformance relative to general department store trends, which have often struggled with declining foot traffic and intense competition from e-commerce and specialty retailers.
• The 'Reimagine 125' locations outperforming the broader Macy's nameplate indicates successful localized strategies, a trend seen in other retailers adapting to diverse consumer preferences.

Stakeholder Impact

• Shareholders: Positive impact due to strong Q3 results, raised full-year guidance, continued share repurchases ($50 million in Q3, $201 million YTD), and consistent quarterly dividends ($49 million in Q3).
• Employees: Continued investments in the "go-forward business," including "Reimagine 125" locations, Bloomingdale's, and digital platforms, suggest ongoing strategic focus and potential for growth opportunities.
• Customers: The "Bold New Chapter" strategy, "Reimagine 125" stores, and focus on an omni-channel experience with compelling merchandise aim to enhance customer satisfaction and value.
• Creditors: Strong balance sheet with $447 million in cash, $2.0 billion in available borrowing capacity, and no material long-term debt maturities until 2030 indicates solid financial health and ability to meet obligations.
• Suppliers: Merchandise inventories increased 0.7% year-over-year, in-line with expectations, reflecting tariff-related cost increases, suggesting stable demand and purchasing.

Next Steps

• Continue implementation of the "Bold New Chapter" strategy.
• Focus on driving long-term, profitable growth rooted in hospitality.
• Pay quarterly dividend of 18.24 cents per share on January 2, 2026, to shareholders of record on December 15, 2025.
• Respond to changes in consumer demand and the competitive landscape, especially in Q4 2025.
• Reinvest most of the savings from the "Bold New Chapter" strategy to support long-term sales growth.

Key Dates

Recommendation

Macy's, Inc. delivered a robust third-quarter performance, significantly exceeding its own guidance for net sales and adjusted diluted EPS. The company's comparable sales growth was the strongest in 13 quarters, driven by successful strategic initiatives like the 'Bold New Chapter' and strong performance from its Bloomingdale's and 'Reimagine 125' segments. The upward revision of full-year guidance across all key financial metrics, despite a minor correction to Core Adjusted EBITDA, signals strong operational momentum and management's confidence. With a healthy balance sheet, ongoing shareholder returns through dividends and share repurchases, and a clear strategic direction, Macy's appears well-positioned for continued growth, making it an attractive investment.

Keywords

Macy's, Retail, Department Store, Earnings, Q3 2025, Financial Results, Guidance Update, Comparable Sales, Adjusted EPS, EBITDA, Bloomingdale's, Bluemercury, Bold New Chapter, Share Repurchase, Dividend, SEC Filing, 8-K/A