Dear Macy’s Stock Fans, Mark Your Calendars for September 10

The retail sector is heading into an important stretch, with consumers facing a mix of higher costs, shifting economic support and growing geopolitical uncertainty. Higher-than-usual tax refunds gave shoppers an extra boost during many retailers’ fiscal first quarters, helping companies deliver stronger growth. 

But as that temporary tailwind fades, investors are getting a clearer look at how resilient consumer spending really is. The war in the Middle East has added another wrinkle, with higher gas prices potentially leaving shoppers with less money for discretionary purchases.

Against that backdrop, Macy's (M) is becoming an especially interesting retail story. The department store chain not only benefited from steady consumer behavior in its first quarter but has also raised its sales and profit guidance for the remainder of the year. 

CEO Tony Spring said tax refunds “definitely” helped, but they were not the only reason Macy’s grew. In his view, the underlying consumer remained steady enough for the company to raise its outlook “despite the macroeconomic and geopolitical uncertainty.” Now, investors have a fresh opportunity to see whether that confidence was justified. 

Macy’s is set to report its Q2 FY2026 results before the market opens on Thursday, Sept. 10. After two years into Spring’s three-year turnaround, the earnings report could offer an important reality check on the company’s momentum and potentially determine where the stock heads next.

About Macy's Stock

Formerly known as Federated Department Stores, New York-based Macy's has evolved into a leading omnichannel retailer, serving shoppers through a broad portfolio of merchandise. Its offerings cover apparel and accessories for men, women, and children, as well as cosmetics, home furnishings, and other consumer goods.

Macy’s, with a market cap close to $6 billion, runs under three well-known retail brands: Macy’s, Bloomingdale’s, and Bluemercury. Collectively, these brands have established a significant presence in various consumer markets.

On the price performance front, the stock has performed strongly, rising 33.7% over the past year and roughly 20% in the last six months. The rally signals growing investor confidence in Macy’s prospects, healthy consumer demand, ongoing operational improvements, and optimism about its ability to maintain earnings and shareholder value.

The stock’s strong performance, however, has not made it overvalued. In fact, valuation metrics show Macy’s is still trading at a discount compared to industry averages. It is currently valued at 10.23 times forward adjusted earnings and 0.28 times sales, both below the industry averages.

Macy’s also maintains its tradition of rewarding shareholders with dividends. The company has raised its dividend for four straight years and now offers $0.77 per share annually, which yields 3.32%. The latest dividend of $0.19 per share is set to be paid on Oct. 1 to shareholders recorded by Sept. 15.

Macy's Surpasses Q1 Earnings

On June 3, the retailer announced its Q1 FY2026 earnings, surpassing Wall Street forecasts for the fifth straight quarter and bolstering its “Bold New Chapter” strategy. The progress was evident at the top line, where net sales increased 1.8% year-over-year (YOY) to $4.7 billion, surpassing analysts’ $4.61 billion estimate. 

Comparable sales increased by 3% YOY, marking Macy’s strongest first-quarter performance in four years. The boost largely came from its major growth banners. Bloomingdale’s achieved a record first quarter with a 10.2% rise in comparable sales, and Bluemercury’s comps grew by 6.4%. 

At Macy’s main brand, comps increased by 1.6%. The reimagined stores — representing roughly 60% of its store network — outperformed, with a 2.4% rise in comps. Gross margin was 38.9%, down 30 basis points YOY, mainly due to tariff pressure. Excluding tariffs, margins remained relatively stable. 

Adjusted EPS increased by 18.2% from the previous year to $0.13, significantly surpassing the analyst forecast of $0.03, while adjusted EBITDA decreased to $290 million from $304 million in the previous year’s period.

Looking ahead, Macy’s anticipates Q2 net sales to be around $4.75 billion to $4.80 billion, with comparable sales expected to be flat or slightly up to 1%. Adjusted diluted EPS is forecasted between $0.29 and $0.34. 

The outlook looks more promising considering the company’s revised full-year outlook. Macy’s now projects FY2026 net sales between $21.5 billion and $21.75 billion. It anticipates comparable sales to grow by 0.5% to 1.2%, and expects adjusted diluted EPS of $2 to $2.20.

Analysts are somewhat more cautious about short-term earnings. Q2 FY2026 EPS is expected to drop 9.8% YOY to $0.37, and full-year FY2026 EPS might fall 4.3% from last year to $2.22. Looking further ahead, the outlook improves, with forecasts showing FY2027 EPS increasing by 6.3% YOY to $2.36.

What Do Analysts Expect for Macy's Stock?

Macy’s improving sales momentum stands out as a positive for investors, although the road ahead is not without obstacles. Tariffs, weakness in discretionary spending, and continued margin pressure remain the key risks to watch. 

Despite the improving operating picture, Wall Street’s stance remains cautious. Macy’s currently carries an overall rating of “Hold.” Among the 13 analysts covering the stock, three assign a “Strong Buy” rating, one recommends a “Moderate Buy,” eight rate it a “Hold,” and one has issued a “Strong Sell.”

That caution is also reflected in analysts’ price expectations. The average price target of $23.18 implies marginal upside, while the Street-high target of $30 points to a gain of 30.2% from current levels.

On the date of publication, Aanchal Sugandh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.