Macy’s (M) Q1 2026 earnings summary

Executive summary

• Q1 2025 net sales were $4.6 billion, down 5.1% year-over-year but above guidance, driven by strong omnichannel and luxury segment performance, with Bloomingdale's and Bluemercury delivering positive comps.

• Adjusted diluted EPS was $0.16, above guidance but down from $0.27 last year; GAAP diluted EPS was $0.13.

• The company is executing its Bold New Chapter strategy, focusing on strengthening Macy's, accelerating luxury, and modernizing operations.

• Store closures and weaker Macy's performance were partially offset by growth at luxury banners.

• $152 million was returned to shareholders via dividends and share repurchases.

Financial highlights

• Comparable sales declined 2.0% on an owned basis and 1.2% on an owned-plus-licensed-plus-marketplace basis.

• Gross margin rate held steady at 39.2%; merchandise margin improved 40 bps, offset by higher delivery expenses.

• SG&A expense was $1.9 billion (39.9% of revenue), up 170 bps year-over-year due to lower sales.

• Adjusted EBITDA was $324 million (6.8% of revenue), down from $364 million (7.3%) in Q1 2024; core adjusted EBITDA margin was 6.4%.

• Net income was $38 million, down from $62 million last year; free cash flow outflow was $203 million.

Outlook and guidance

• FY25 net sales expected at $21.0–$21.4 billion; comparable sales projected to decline 2.0% to flat.

• Adjusted EBITDA margin guidance: 7.4%–7.9%; adjusted diluted EPS guidance: $1.60–$2.00.

• Q2 net sales expected at $4.65–$4.75 billion; comps down 1.5% to up 0.5%; adjusted EPS of $0.15–$0.20.

• Guidance reflects ongoing tariffs, a more promotional environment, and no rebound in international tourism.

• Management expects selective price increases due to new tariffs, with impacts included in guidance.