Macy's Q4 FY26 earnings call M

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 impact^🌐s and lower asset sale gains. This performance underscores the effectiveness of the strategy and the commitment of its teams.

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.

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.

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.

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.

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.