Macy's, Inc. Reports First Quarter Results and Updates Annual Guidance

May 28, 2025  by Karen Parrish in Business Strategy, Industry   

First Quarter Highlights

- Macy’s, Inc. achieved net sales of $4.6 billion, exceeding the company’s prior guidance range.

- Macy’s, Inc. comparable sales were down 2.0% on an owned basis and down 1.2% on an owned-plus-licensed-plus-marketplace basis, surpassing the company’s prior guidance range, benefiting from better than expected performance across all nameplates.

- The company reported GAAP diluted earnings per share of $0.13; Adjusted diluted earnings per share of $0.16, above the company’s prior guidance range.

- Bloomingdale’s reported comparable sales growth on an owned and owned-plus-licensed-plus-marketplace basis of 3.0% and 3.8%, respectively.

- Bluemercury reported comparable sales growth of 1.5%, its 17th consecutive quarter of comparable sales growth.

- The company returned approximately $152 million to shareholders, consisting of $51 million in quarterly cash dividends and $101 million of share repurchases.

“We continued to execute against our Bold New Chapter strategy during the quarter, scaling key initiatives that improved our customer experience and contributed to stronger than expected performance across all three of our nameplates,” said Tony Spring, chairman and chief executive officer of Macy’s, Inc. “Our first quarter results give us confidence that we have the right strategy and team in place to navigate the current environment while we continue to invest in our customer on the path to returning Macy’s, Inc. to sustainable profitable growth.”

First Quarter Results (comparisons are to the first quarter of 2024)

Macy’s, Inc. net sales decreased 5.1%¹ inclusive of store closures to $4.6 billion, with comparable sales down 2.0% on an owned basis and down 1.2% on an owned-plus-licensed-plus-marketplace basis. Comparable owned-plus-licensed-plus-marketplace sales reflect sales growth at Bloomingdale’s and Bluemercury offset by a decline at Macy’s.

Macy’s, Inc. go-forward business² comparable sales were down 1.8% on an owned basis and down 0.9% on an owned-plus-licensed-plus-marketplace basis. By nameplate:

- Macy’s net sales were down 6.5%¹ inclusive of store closures, with comparable sales down 2.9% on an owned basis and down 2.1% on an owned-plus-licensed-plus-marketplace basis. Macy’s go-forward business² comparable sales were down 2.7% on an owned basis and down 1.9% on an owned-plus-licensed-plus-marketplace basis.

  - Reimagine 125 locations comparable sales were down 1.3% on an owned basis and down 0.8% on an owned-plus-licensed basis.

- Bloomingdale’s net sales were up 2.6%, with comparable sales up 3.0% on an owned basis and up 3.8% on an owned-plus-licensed-plus-marketplace basis.

- Bluemercury net sales were up 0.8% and comparable sales were up 1.5% on an owned basis.

Other revenue of $194 million increased $40 million, or 26.0%. Within Other revenue:                 

- Credit card net revenues increased $37 million, or 31.6%, to $154 million.

           - Macy’s Media Network net revenue rose $3 million, or 8.1%, to $40 million.

Gross margin rate of 39.2% was flat, reflecting improved merchandise margin offset by higher delivery expense as a percent of net sales.

Selling, general and administrative (“SG&A”) expense of $1.9 billion increased $2 million. The company reinvested savings from closed locations and the company’s end-to-end operations efforts into customer facing initiatives within its go-forward business, including in the Reimagine 125 locations, Bloomingdale’s and Bluemercury. As a percent of total revenue, SG&A expense increased 170 basis points to 39.9% driven by lower net sales.

Asset sale gains of $16 million increased $15 million.

GAAP net income was $38 million, or 0.8% of total revenue, and Adjusted net income was $46 million, or 1.0% of total revenue. In the first quarter of 2024, GAAP net income was $62 million, or 1.2% of total revenue, and Adjusted net income was $77 million, or 1.5% of total revenue.

GAAP and Adjusted diluted earnings per share (“EPS”) were $0.13 and $0.16, respectively. In the first quarter of 2024, GAAP and Adjusted diluted EPS were $0.22 and $0.27, respectively.

Adjusted earnings before interest, taxes, and depreciation and amortization (“EBITDA”) was $324 million, or 6.8% of total revenue, and Core Adjusted EBITDA³ was $308 million, or 6.4% of total revenue. In the first quarter of 2024, Adjusted EBITDA was $364 million, or 7.3% of total revenue, and Core Adjusted EBITDA³ was $363 million, or 7.3% of total revenue.

Shareholder Returns

Through its quarterly dividend, the company returned $51 million in cash to shareholders in the first quarter of 2025. Additionally, on May 16, 2025, Macy’s, Inc.’s board of directors declared a regular quarterly dividend of 18.24 cents per share on Macy’s, Inc’s common stock, payable on July 1, 2025, to shareholders of record at the close of business on June 13, 2025.

2025 Guidance

The company has revised its annual outlook based on current information to account for several factors including initial and current tariffs; some moderation in consumer discretionary spending; and a heightened competitive promotional landscape. Despite these challenges, the company is confident that its strong financial position, diverse brand and category offerings, and range from off-price to luxury provide flexibility to adapt to these changes.

Conference Call and Webcasts

A webcast of Macy's, Inc.’s call with analysts and investors to report its first quarter of 2025 sales and earnings will be held on May 28. Macy’s, Inc.’s webcast, along with the associated presentation, is accessible to the media and general public via the company's website at www.macysinc.com. A replay of the conference call will be available on the company’s website or by calling 1-877-660-6853, using passcode 13753217, about two hours after the conclusion of the call.

Overview & Operations

End-to-End Operations (-0.5% Inventory vs. 1Q2024 — +340bps Spread of delivery vs 1Q2024)

- Efforts to drive meaningful change to customers, and the company’s operational and financial performance, remain on track.

- Challenging the complexity of the company’s business model and containing the cost to serve the value chain.

- Streamlining asset portfolio to deliver profitable sales growth.

- Reinvesting the benefits captured to self-fund improvement in customer experience.

Evolving Global Trade Conditions & Tariffs

BUSINESS MODEL ADVANTAGES
- Multi category and multi-branded model provides flexibility

- Nameplates from off-price to luxury cater to ~40M active customers.

- Strong balance sheet and limited near-term debt maturities

SOURCING and ANTICIPATED TARIFF IMPACT
- FY24 ~20% of total Macy's, Inc. product originated in China.

 - National brands sourced ~18%

- Private brands source ~27% from China, down from ~32% in FY24 and over 50% pre-pandemic

- FY25 gross margin anticipated impact to be ~20 bps to ~40 bps

MITIGATION ACTIONS

- Diversifying countries of origin

- Renegotiating orders with suppliers; and,

- Cancelling or delaying orders