Macy's (M) Stock Surges 9% on Strong Q4 Results Despite Conservative 2026 Outlook

TLDR

Table of Contents

Macy’s delivered Q4 adjusted earnings of $1.67 per share, surpassing the Street’s $1.57 expectation
Top-line revenue declined 1.7% annually to $7.64 billion, narrowly exceeding the $7.62 billion forecast
Comparable sales climbed 1.8%, significantly outperforming the anticipated 0.9% contraction
Shares surged 9% during Wednesday’s premarket session following a 23% year-to-date decline
Fiscal 2026 EPS outlook of $1.90–$2.10 disappointed versus analyst expectations of $2.20

Macy’s (M) delivered a solid fourth-quarter performance on Wednesday morning, propelling shares 9% higher in early trading and offering relief after a challenging year for the stock.

Macy's Q4 2026 Earnings

– Adj EPS $1.67 (est $1.54)

– Total Rev. $7.92B (est $7.77B)

– Net Sales $7.64B (est $7.51B)

– Sees FY Net Sales $21.4B To $21.65B (est $21.11B)

– Sees FY Adj EPS $1.90 To $2.10 (est $2.21)

— First Squawk (@FirstSquawk) March 18, 2026

The iconic retailer posted adjusted earnings of $1.67 per share for the final quarter, comfortably exceeding Wall Street’s consensus target of $1.57. Total revenue reached $7.64 billion, representing a 1.7% year-over-year decrease but narrowly topping the analyst projection of $7.62 billion.

Macy’s, Inc., M

The top-line contraction primarily stemmed from strategic store closures executed throughout the previous fiscal period. Adjusting for these closures reveals a more encouraging underlying trend.

Comparable-store sales — tracking performance at locations operating for at least twelve months — increased 1.8%. This figure demolished the expected 0.9% decrease and emerged as a standout metric in the quarterly results.

CEO Tony Spring’s “Bold New Chapter” transformation initiative moved into year two, with continued emphasis on attracting affluent consumers. This strategic pivot materialized across brand performance: the flagship Macy’s banner posted modest 0.4% comparable growth, while Bloomingdale’s surged 8.5% and Bluemercury contributed 2.5% growth.

With shares down 23% prior to the earnings release, even a moderate earnings surprise provided meaningful support.

Guidance Falls Short

For the 2026 fiscal year, Macy’s projected net sales ranging from $21.4 billion to $21.7 billion, with adjusted earnings per share between $1.90 and $2.10. Wall Street had anticipated $21.42 billion in revenue and $2.20 in earnings per share.

While the revenue projection aligns closely with consensus, the earnings forecast misses expectations at both the midpoint and upper boundary.

Executives emphasized a “prudent approach” to forecasting, highlighting macroeconomic volatility and geopolitical uncertainty. Consumer spending patterns remain challenged, especially among budget-conscious shoppers grappling with persistent inflationary pressures.

Ongoing store closures are projected to reduce sales by approximately $145 million this year. While anticipated, this represents a meaningful drag on performance.

Tariff Impact Flagged for Q1

Trade policy represents another critical variable in Macy’s planning. With substantial sourcing from China, the company indicated that tariff-related costs will most significantly impact margins during the first quarter of 2026 — representing the peak pressure period.

Macy’s expressed expectations for tariff headwinds to moderate during the latter half of the year. This outlook mirrors projections from other major retailers, including Walmart and Kohl’s, which have similarly issued conservative annual forecasts.

A recent Supreme Court decision established a standardized 10% tariff rate, though retailers that acquired inventory under higher duty structures continue facing near-term cost challenges as existing stock flows through their systems.

Retailers with significant Chinese supply chain exposure remain particularly focused on first-quarter dynamics. For Macy’s, this translates to a more difficult initial six months before anticipated relief materializes in the year’s back half — assuming projections prove accurate.

The fourth-quarter performance provided investors with tangible positives. Comparable sales advanced 0.4% for the core Macy’s brand, jumped 8.5% at Bloomingdale’s, and grew 2.5% at Bluemercury.

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