Macy’s falls despite beating estimates on weak revenue guidance

Investing.com -- Macy's Inc. (NYSE: M) reported second-quarter results that exceeded Wall Street expectations, but shares fell 3.3% premarket as the company's full-year guidance disappointed investors.

The department store operator posted adjusted earnings per share of $0.63 for the quarter, beating the analyst consensus of $0.35 by $0.28. Revenue reached $4.9 billion, surpassing the $4.78 billion estimate and rising 1.1% from $4.8 billion in the year-ago period.

Comparable sales increased 2.7% across all nameplates, with the company's Reimagine 200 Macy's stores posting 1.1% growth, Bloomingdale's surging 11.3%, and Bluemercury up 6.2%.

However, Macy's full-year revenue guidance fell short of expectations. The company projected fiscal 2027 adjusted EPS of $2.15 to $2.35, with a midpoint of $2.25 matching the analyst consensus of $2.25. Revenue guidance of $21.68 billion to $21.83 billion, with a midpoint of $21.76 billion, came in below the $21.82 billion consensus estimate.

"Our second-quarter performance builds on the progress our colleagues have consistently delivered through our Bold New Chapter strategy," said Tony Spring, chairman and chief executive officer. "The investments we're making are driving results across our portfolio, from the continued outperformance of our Reimagine 200 Macy's stores, to meaningful double-digit growth at Bloomingdale's and another solid quarter at Bluemercury."

The company's adjusted EPS of $0.63 included a net tariff refund benefit of $0.23. Excluding this benefit, adjusted EPS would have been $0.40, compared to $0.35 in the prior-year quarter. Gross margin expanded 180 basis points to 41.5%, though 180 basis points of this improvement came from net tariff refunds.

Macy's received $116 million in total IEEPA tariff refunds, with approximately $20 million flowing to full-year EPS and the remaining $96 million being reinvested in the business.

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