Macy's (M) shares traded nearly flat on Wednesday, even after the department store chain reported its first quarterly sales increase in nearly four years and lifted its full-year guidance. The stock hovered around $21.68 in early New York trading, up just 0.05% from the prior close, after reaching an intraday high of $23.01 earlier in the session.
The muted reaction came despite a stronger-than-expected first quarter, with comparable sales rising 3.0% — the best first-quarter performance in four years and the fourth consecutive quarter of gains. The company's upscale Bloomingdale's division led the charge, posting a 10.2% comparable sales surge, while Bluemercury climbed 6.4% and Macy's namesake stores rose 1.6%.
Net sales for the quarter reached $4.68 billion, up 1.8% year-over-year and above the $4.61 billion consensus estimate from analysts polled by LSEG. Adjusted earnings came in at 13 cents per share, easily beating the 3-cent forecast. The results prompted Macy's to raise its fiscal 2026 net sales outlook to a range of $21.50 billion to $21.75 billion, up from its prior view of $21.40 billion to $21.65 billion. The company also increased its adjusted diluted earnings per share guidance to a range of $2.00 to $2.20, compared with the previous $1.90 to $2.10.
CEO Tony Spring expressed confidence in the company's trajectory, stating, "We're off to a strong start to the year," and emphasizing disciplined operations and a continued focus on customer engagement. He noted that middle- and upper-income shoppers "remained resilient" during the quarter, adding that "when the product and the experience are differentiated and compelling, engagement and spend increase."
Despite the upbeat results, investors remain cautious about the broader economic environment. Macy's management pointed to risks from tariffs, higher fuel costs, and ongoing pressure on consumer budgets. Gross margin slipped 30 basis points, which the company attributed to tariff-related costs. However, Macy's expects lower import tariffs later in the year to help offset some of the headwinds.
The luxury segment remains a key battleground. Morningstar analyst David Swartz noted that Macy's luxury business is still strong and that its investments are making a difference. Some retail analysts linked Bloomingdale's gains to the Chapter 11 bankruptcy of Saks Global, which owns Saks Fifth Avenue and Neiman Marcus, potentially shifting high-end shoppers to Bloomingdale's.
Consumer behavior showed a mixed picture. While categories like prom dresses, men's shoes, dresses, and fragrances performed well, larger-ticket items such as furniture underperformed, as shoppers remain cautious about big purchases. Spring told the Associated Press that furniture sales were "underwhelming."
Macy's continues to execute its "Bold New Chapter" strategy, which involves accelerating investments in luxury, upgrading store experiences, and closing underperforming locations. However, the stock's minimal movement suggests investors are waiting for more concrete evidence that these improvements can withstand the pressures of rising fuel costs, tariffs, and tighter consumer budgets.
