Macy’s (M) Q3 2025 earnings summary

Executive summary

• Third quarter net sales were $4.7–$4.74 billion, down 2.4% year-over-year, with positive comps at First 50 Macy's locations, Bloomingdale's, and Bluemercury, offset by weakness in other Macy's locations and digital.

• Adjusted diluted EPS was $0.04, down significantly year-over-year, reflecting delivery expense adjustments; GAAP diluted EPS was $0.10.

• Asset sale gains reached $66 million, exceeding expectations and supporting EPS.

• The Bold New Chapter strategy is driving investments in customer experience, merchandising, operational efficiency, and store rationalization.

• An investigation into delivery expense misstatements found $151 million in misclassified costs from Q4 2021–Q3 2024, with immaterial financial impact; responsible individual is no longer with the company.

Financial highlights

• Net sales: $4.7–$4.74 billion, down 2.4% year-over-year; total revenue for Q3 2024 was $4.90 billion.

• Adjusted diluted EPS: $0.04; GAAP diluted EPS: $0.10; net income: $28 million.

• Gross margin rate: 39.6%, down 60 basis points year-over-year, impacted by inventory valuation changes.

• SG&A expense: $2.1 billion, or 42.1% of revenue, up $24 million year-over-year.

• Free cash flow: outflow of $492 million year-to-date; cash and cash equivalents at quarter-end: $315 million.

Outlook and guidance

• Q4 net sales expected at $7.8–$8.0 billion; Q4 adjusted diluted EPS expected at $1.40–$1.65, including delivery expense adjustments.

• Full-year 2024 net sales expected at $22.3–$22.5 billion; comps down 1% to flat; luxury nameplates up 2–2.5%.

• Full-year adjusted diluted EPS outlook: $2.25–$2.50; gross margin 38.2–38.3%; SG&A 36.5–36.3% of revenue.

• Guidance incorporates $79 million delivery expense adjustment due to prior accounting error.

• Capital expenditures projected at $895 million for the year, with a focus on digital and omni-channel investments.