What are the key drivers for Bloomingdale's continued growth, and how will the expanded Reimagined program impact Macy's comps?

Bloomingdale's growth is broad-based across categories and channels, supported by vendor partnerships and customer loyalty. Macy's Reimagined program, now at 200 stores (60% of go-forward fleet, 75% of sales), is moving from test to scale and is expected to continue driving comp growth. The digital business is also healthy and growing. “I'm pleased that we are to 200 stores now in the reimagined program. That's 60% of our go-forward Macy's fleet and 75% of the Macy's store go-forward sales. You've moved from test to iterate to now we're at the scale point.”

What actions is Macy's taking to appeal to price-sensitive consumers, and what are the core operational drivers of gross margin improvement beyond tariffs?

Macy's balances promotional events, private brands, and its Backstage offering to appeal to value-seeking customers, while also offering premium brands. Gross margin improvement, excluding tariffs, is driven by fundamental 'Bold New Chapter' initiatives: improved assortment, better brands, and enhanced omnichannel experiences, supporting AUR and margin expansion. “The items that are driving our gross margin performance, which is exactly what we saw in Q3 and Q4 are really the fundamental Bold New Chapter initiatives of improving and creating a more relevant assortment, bringing in better brands, having greater -- better experiences across our omnichannel platform, both in stores and in digital, and that is supporting AUR and gross margin as we move forward.”

What is the CapEx and SG&A investment for the Reimagined program, expected sales/EBIT risk, and what are the CapEx plans for FY26?

The Reimagined program is capital-light, with minor to no CapEx in the initial tranche of stores. OpEx is designed per location based on volume and incremental sales opportunity, with a focus on ROI. For FY26, CapEx is guided to approximately $800 million, with the main increase allocated to Bloomingdale's for growth opportunities, technology, and supply chain. “On a CapEx basis, our CapEx was lower this year as we completed some major projects, most notably the China Grove new distribution facility. As we look to next year, our guidance is approximately $800 million. And the main part of that increase will be in Bloomingdale's.”

Macy's (M) Q4 FY26 earnings call: guidance and Q&A

Earnings call· Jan 2026 (Q4 FY26)· Consumer Discretionary· Mar 18, 2026

Source: earnings call transcript

Executive summary

Macy's Q4 FY26 — Strong Performance and Strategic Traction

Macy's concluded FY26 with strong Q4 results, exceeding top and bottom-line guidance, driven by the successful execution of its 'Bold New Chapter' strategy. The company reported positive comparable sales across all nameplates, led by Bloomingdale's, and is expanding its 'Reimagined' store program. While maintaining a prudent approach to FY26 guidance due to external uncertainties, management expressed confidence in its strategic initiatives and financial flexibility to drive sustainable growth.

Highlights

Macy's, Inc. comparable sales rose 1.8% in Q4 FY26, materially above guidance for down 2.5% to flat.
Adjusted diluted EPS of $1.67 in Q4 FY26 was well above guidance range of $1.35 to $1.55.
Bloomingdale's comparable sales rose 9.9% in Q4 FY26, benefiting from its best holiday result on record.
Reimagined 125 locations at Macy's achieved 0.9% comparable sales growth in Q4 FY26, demonstrating continued success.
Free cash flow for FY25 was $797 million, representing a yield of over 15%.

Concerns

Tariff impact on Q4 FY26 adjusted diluted EPS was approximately $0.13.
Lower-than-expected asset sale gains of $3 million in Q4 FY26 compared to an expectation of $15 million to $20 million.
Full-year FY26 adjusted diluted EPS guidance of $1.90 to $2.10 includes a tariff impact of roughly $0.10 to $0.20.
Macroeconomic and geopolitical factors could influence discretionary spend in FY26.
Q1 FY26 adjusted EPS guidance of negative $0.01 to positive $0.01 is impacted by tariffs of roughly $0.05 to $0.10.

Guidance & targets

Category	Target	Timeline	Confidence
Net Sales	$21.4 billion to $21.65 billion high materiality	FY26	Medium
Macy's, Inc. Comparable Sales	down approximately 0.5% to up 0.5% high materiality	FY26	Medium
Other Revenue	about $920 million medium materiality	FY26	Medium
Gross Margin as a percent of net sales	38.3% to 38.6% high materiality	FY26	Medium
Gross Margin Tariff Impact	roughly 20 to 30 basis points high materiality	FY26	Medium
SG&A Expense	up 1% to 2% on a dollar basis medium materiality	FY26	Medium
Adjusted EBITDA as a percent of total revenue	7.7% to 7.9% high materiality	FY26	Medium
Interest Expense	roughly $110 million low materiality	FY26	Medium
Adjusted Diluted EPS	$1.90 to $2.10 high materiality	FY26	Medium
Net Sales	approximately $4.575 billion to $4.625 billion high materiality	Q1 · FY26	Medium
Macy's, Inc. Comparable Sales	up approximately 0.5% to 1.5% high materiality	Q1 · FY26	Medium
Adjusted EBITDA as a percent of total revenue	4.9% to 5.1% high materiality	Q1 · FY26	Medium
Adjusted EPS	negative $0.01 to positive $0.01 high materiality	Q1 · FY26	Medium
EPS Tariff Impact	roughly $0.05 to $0.10 high materiality	Q1 · FY26	Medium
Gross Margin Rate Tariff Impact	roughly 40 to 60 basis points high materiality	Q1 · FY26	Medium
Store Closures	approximately 65 locations medium materiality	through 2028	High
Cash Expectations from Store Closures	$650 million to $700 million medium materiality	Long-term	High
Capital Expenditures	approximately $800 million medium materiality	FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Macy's, Inc. (Total) Macy's, Inc. net sales were above guidance range of $7.35 billion to $7.5 billion. Comparable sales rose 1.8%, materially above guidance. Adjusted diluted EPS exceeded the high end of guidance. Net Sales: $7.6 billionComparable Sales: 1.8%Adjusted EBITDA: $840 millionAdjusted EBITDA % of Total Revenue: 10.6%Adjusted Diluted EPS: $1.67	$7.6 billion	—	—	$840 million Adjusted EBITDA
Macy's (Nameplate) Macy's go-forward comparable sales rose 0.6%, with Reimagined 125 locations showing 0.9% growth. The digital channel is benefiting from modernization and contributes significantly to overall sales. Go-forward Comparable Sales: 0.6%Reimagined 125 Comparable Sales: 0.9%Digital Channel Sales: Approximately 1/3 of annual sales	—	0.6% go-forward comparable sales	—	—
Bloomingdale's Bloomingdale's comparable sales increased 9.9%, benefiting from its best holiday result on record. Strength was broad-based across stores and digital with growth in almost all product categories. Comparable Sales: 9.9%	—	9.9% comparable sales	—	—
Bluemercury Bluemercury achieved 1.3% comparable sales growth, driven by dermatological skincare and fragrances. New stores are also posting growth. Comparable Sales: 1.3%	—	1.3% comparable sales	—	—

M operating KPIs by quarter

M operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Apr 2026 Q1 FY27	Jul 2026 Q2 FY27	Change vs prior quarter
Stores Macy's go-forward	~350 comp sales include the approximately 350 Macy's go-forward locations in digital and Bloomingdale's and Bluemercury nameplates inclusive of stores and Digital. Source: earnings call transcript	~350 comp sales include the approximately 350 go-forward store locations and digital for Macy's, which represents the Macy's go-forward nameplate, and all stores and digital for Bloomingdale's and Bluemercury, which represent their respective nameplates. Source: earnings call transcript	—
Reimagine stores	200 During the first quarter, we expanded learnings to an additional 75 locations, bringing the Reimagine base to 200. Source: earnings call transcript	200 Earlier this year, we expanded the program to 200 locations, which delivered comp growth of 1.9% in the second quarter. Source: earnings call transcript	0%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline
Prom starts here	launch	last Saturday
California Love campaign & Surf Shop Carousel	launch	last week
New Brands (Macy's)	launch	2025
New Brands (Bloomingdale's)	launch	past year

Risks & headwinds

Tariff Impact on Gross Margin Q4 FY26, FY26, Q1 FY26

approximately 60 basis points in Q4 FY26; roughly 20 to 30 basis points for FY26; roughly 40 to 60 basis points for Q1 FY26

Mitigation:Management expects to lap higher tariffs in Q2 FY26 and assumes similar tariffs remain in place for the rest of the year. Underlying gross margin trend is positive.

Tariff Impact on EPS Q4 FY26, FY26, Q1 FY26

approximately $0.13 in Q4 FY26; roughly $0.10 to $0.20 for FY26; roughly $0.05 to $0.10 for Q1 FY26

Mitigation:Incorporated into guidance; management is focused on operational improvements to offset impacts.

Lower-than-expected Asset Sale Gains Q4 FY26

$3 million in Q4 FY26 vs. $15 million to $20 million expected

Mitigation:Reflects a shift in timing of certain transactions; commitment to optimizing fleet and maximizing value of remaining assets through 2028.

Macroeconomic and Geopolitical Factors FY26

Influencing discretionary spend

Mitigation:Taking a prudent approach to guidance, preserving flexibility to respond to changes in competitive landscape and consumer demand. Focus on factors within company control.

Lower-tier Consumer Choicefulness Ongoing

Lower tiers remain more choiceful

Mitigation:Macy's customer base skews towards middle and upper-income tiers, which remain more resilient. Strategy includes offering value through promotions and private brands.

What to watch in Q1 FY27

Reimagined 200 Store Performance

next quarter

Current Reimagined 125 grew 0.9% in Q4 FY26

Target Continued comp growth and outperformance vs. non-Reimagined stores

Why it matters

The expansion of the Reimagined program to 200 stores is a key driver for Macy's brand growth and overall company performance.

At Macy's, we're confident in the Reimagined location's ability to deliver profitable growth. Earlier this year, we introduced initiatives to an additional 75 locations, creating the Reimagine 200.

Find out whether M delivers this. Inve re-checks your case every morning.

Q&A highlights

How is Macy's positioned for resilience against macro/consumer volatility, and what gives confidence in continued momentum?

Management feels confident about the strategy, team, and execution, citing broad-based growth across all nameplates and healthy financials. The business model, being multi-brand and multi-channel, allows for adaptability to consumer needs. Guidance reflects a prudent approach due to external uncertainties.

“I feel terrific about how we closed 2025, growth across Macy's, Bloomingdale's and Bluemercury, Reimagined stores continuing to outperform 7, 8 quarters of growth, Bloomingdale's running on all cylinders, growth in digital, growth in physical, growth in full price and growth in off-price.”

asked by Blake Anderson · answered by Antony Spring

3 min read 6 chapters

Detailed narrative

Bold New Chapter Strategy Drives Performance

Macy's successfully executed its 'Bold New Chapter' strategy throughout 2025, achieving several major milestones. The company returned to positive comparable sales for total Macy's Inc. and the Macy's nameplate, marking an important inflection point. It consistently delivered better-than-expected top and bottom-line results in every quarter, with adjusted diluted EPS of $2.32 well above the most recent guidance of $2.00 to $2.20, despite tariff impacts and lower asset sale gains.

This performance underscores the effectiveness of the strategy and the commitment of its teams.

Reimagined Stores and Digital Modernization

The 'Reimagined 125' locations at Macy's achieved 1% comparable sales growth in 2025, with stores that received initiatives delivering positive comps in 7 of the past 8 quarters. These initiatives, including improved assortment relevancy, staffing investments, and localized events, are creating a halo effect on Macy's omnichannel business.

The digital channel, representing approximately one-third of annual sales, is benefiting from a modernized macys.com with an editorialized approach. In 2026, the program expands to 'Reimagined 200' locations, covering nearly 60% of the go-forward Macy's store base and roughly 75% of its sales, aiming for meaningful scale and continued profitable growth.

Luxury Segment Accelerates Growth

Bloomingdale's achieved 7.4% comparable sales growth in 2025, a 490 basis point improvement year-over-year, with strength across stores and digital and almost all product categories. The strategy focuses on curation, deepened brand partnerships, and enhanced experiences, leading to market share gains and a highly loyal customer base.

Bluemercury also saw 1.6% annual comparable sales growth, driven by dermatological skincare and fragrances. Both luxury nameplates are well-positioned for sustained performance, with Bloomingdale's evaluating expansion opportunities for small-format stores and outlets.

Operational Efficiency and AI Integration

Macy's is simplifying and modernizing end-to-end operations to improve customer service and drive efficiencies. Initiatives have materially improved delivery times and streamlined processes through multi-year network modernization efforts, including the new China Grove distribution facility. The company is actively building capabilities with AI, exploring over 35 different use cases across supply chain, merchandising, marketing, call centers, and customer-facing omnichannel areas, aiming to support customer shopping, colleague service, and overall operational excellence.

Macy's Ecosystem and Customer Engagement

The Macy's ecosystem is highlighted as a fundamental strength, connecting with nearly 40 million customers annually and providing visibility to over 70% of transactions. This ecosystem, enabled by stores, digital channels, loyalty and credit card programs, Macy's Media Network, marketing, and events, provides significant customer knowledge.

The company leverages this deep understanding to offer relevant assortments, experiences, and targeted marketing, contributing to its best Net Promoter Score on record and strong customer engagement.

Strategic Store Portfolio Optimization

Macy's is committed to running an optimized fleet, targeting approximately 350 go-forward locations. The company plans to exit approximately 65 additional underproductive stores, completing the previously announced 150 closures, but will extend the timing through 2028 to maximize value from real estate transactions.

This flexible approach, supported by a strong balance sheet and cash flow, is expected to increase cash expectations from this initiative from $500-$650 million to $650-$700 million, reinforcing financial flexibility while investing in growth.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.