Macy’s posted a comp sales increase and net income growth in its second quarter, beating a Wall Street estimate as the retailer began investing its IEEPA tax refunds across a range of priorities from pricing to earnings support.
Net income was $169 million, or 62 cents per diluted share, versus $87 million, or 31 cents per diluted share, in the year-prior quarter. Adjusted for one-time events, the company noted, net income was $170 million, or 63 cents per diluted share, versus $98 million, or 35 cents per diluted share, in the year-earlier quarter
An analyst consensus estimate from Zacks Investment Research called for earnings of 37 cents per adjusted diluted share and revenue of $4.82 billion.
Adjusted to exclude tariff refunds, net income was $107 million, or 40 cents per diluted share, versus $98 million, or 35 cents per diluted share, in the year-past quarter. Macy’s received all expected IEEPA tariff refunds, including $98 million in the second quarter and $18 million following the period’s end, for a total of $116 million. The company reported it is taking a balanced approach to deploying the returns with $20 million flowing into full-year earnings and the the rest going towards investments in customer benefits, furthering Macy’s “Bold New Chapter” strategy and supporting long-term growth.
During Macy’s second-quarter conference call, Tom Edwards, Macy’s COO and CFO, said,” “We are using the remaining (IEEPA refund) funds to invest in Macy’s brand building, accelerate reimagined store pilots to support 2027 program expansion, strengthen our value proposition and mitigate the uncertainty of fuel headwinds,” he said.
Macy’s comparable sales rose 2.7% year over year in the quarter, the company reported. As for its banners, Macy’s comps grew 1.1%. year over year with those at upgraded Reimagine 200 locations were up 1.9%. Bloomingdale’s comps gained 11.3% while those at Bluemercury increased 6.2% year over year. Tabletop was among the best performing categories at Bloomingdales in the second quarter, according to Macy’s.
Net sales were $4.87 billion and total revenues were $5.06 billion versus $4.81 billion and $5 billion, respectively, in the year-before period. Operating income was $244 million versus $149 million in the quarter a year previous.
Macy’s updated its guidance for net sales to $21.68 billion to $21.83 billion from $21.5 billion to $21.75 billion previously. It now expects comparable sales to come in at 1% to 1.5% versus 0.5% to 1.2% previously and adjusted diluted earnings per share to come in at $2.15 to $2.35 versus $2 to $2.20.
“Our second-quarter performance builds on the progress our colleagues have consistently delivered through our ‘Bold New Chapter’ strategy,” said Tony Spring, Macy’s chairman and CEO.. “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. As we enter the second half of the year, we remain focused on scaling what is resonating most with customers, exciting brands and assortments and compelling events and experiences. Combined with disciplined execution, we expect these efforts to continue to build a durable foundation for sustainable, profitable growth.”
