Department store chain Macy’s (NYSE: M) beat Wall Street’s revenue expectations in Q2 CY2026, with sales up 1.2% year on year to $5.06 billion. The company expects the full year’s revenue to be around $21.75 billion, close to analysts’ estimates. Its non-GAAP profit of $0.63 per share was 71.2% above analysts’ consensus estimates.
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Macy's (M) Q2 CY2026 Highlights:
- Revenue: $5.06 billion vs analyst estimates of $5.01 billion (1.2% year-on-year growth, 1% beat)
- Adjusted EPS: $0.63 vs analyst estimates of $0.37 (71.2% beat)
- Adjusted EBITDA: $457 million vs analyst estimates of $380.7 million (9% margin, 20% beat)
- The company slightly lifted its revenue guidance for the full year to $21.75 billion at the midpoint from $21.63 billion
- Management raised its full-year Adjusted EPS guidance to $2.25 at the midpoint, a 7.1% increase
- Operating Margin: 4.8%, up from 3% in the same quarter last year
- Free Cash Flow Margin: 2.9%, similar to the same quarter last year
- Same-Store Sales rose 2.7% year on year, in line with the same quarter last year
- Market Capitalization: $5.66 billion
Company Overview
With a storied history that began with its 1858 founding, Macy’s (NYSE: M) is a department store chain that sells clothing, cosmetics, accessories, and home goods.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years.
With $22.78 billion in revenue over the past 12 months, Macy's is one of the larger companies in the consumer retail industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because there is only so much real estate to build new stores, placing a ceiling on its growth. For Macy's to boost its sales, it likely needs to adjust its prices or lean into foreign markets.
As you can see below, Macy’s demand was weak over the last three years. Its sales fell by 2.4% annually as it closed stores.
This quarter, Macy's reported modest year-on-year revenue growth of 1.2% but beat Wall Street’s estimates by 1%.
Looking ahead, sell-side analysts expect revenue to decline by 1.3% over the next 12 months, similar to its three-year rate. it’s hard to get excited about a company that is struggling with demand.
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Store Performance
Number of Stores
A retailer’s store count influences how much it can sell and how quickly revenue can grow.
Over the last two years, Macy's has generally closed its stores, averaging 3.7% annual declines.
When a retailer shutters stores, it usually means that brick-and-mortar demand is less than supply, and it is responding by closing underperforming locations to improve profitability.
Note that Macy's reports its store count intermittently, so some data points are missing in the chart below.
Same-Store Sales
A company’s store base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales is an industry measure of whether revenue is growing at those existing stores and is driven by customer visits (often called traffic) and the average spending per customer (ticket).
Macy’s demand within its existing locations has been relatively stable over the last two years but was below most retailers. On average, the company’s same-store sales have grown by 1.2% per year. Given its declining store base over the same period, this performance stems from a mixture of higher e-commerce sales and increased foot traffic at existing locations (closing stores can sometimes boost same-store sales).
In the latest quarter, Macy’s same-store sales rose 2.7% year on year. This growth was an acceleration from its historical levels, which is always an encouraging sign.
Key Takeaways from Macy’s Q2 Results
It was good to see Macy's beat analysts’ EPS expectations this quarter. We were also excited its gross margin outperformed Wall Street’s estimates by a wide margin. Overall, we think this was a decent quarter with some key metrics above expectations. The market seemed to be hoping for more, and the stock traded down 4.1% to $20.82 immediately after reporting.
Big picture, is Macy's a buy here and now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
