Macy’s third quarter results met Wall Street’s revenue expectations and outperformed on adjusted profit, reflecting the early momentum of the company’s Bold New Chapter strategy. Management credited better-than-expected same-store sales growth to improvements in curated assortments, store upgrades, and a more seamless omnichannel experience. CEO Tony Spring specifically highlighted strong customer response to the refreshed Reimagine 125 store locations and the continued growth of the luxury-focused Bloomingdale’s and Bluemercury banners.
Is now the time to buy M? Find out in our full research report (it’s free for active Edge members).
Macy's (M) Q3 CY2025 Highlights:
- Revenue: $4.91 billion vs analyst estimates of $4.75 billion (flat year on year, 3.4% beat)
- Adjusted EPS: $0.09 vs analyst estimates of -$0.13 (significant beat)
- Adjusted EBITDA: $281 million vs analyst estimates of $210.5 million (5.7% margin, 33.5% beat)
- The company lifted its revenue guidance for the full year to $21.55 billion at the midpoint from $21.3 billion, a 1.2% increase
- Management raised its full-year Adjusted EPS guidance to $2.10 at the midpoint, a 12% increase
- Operating Margin: 0.9%, in line with the same quarter last year
- Locations: 685 at quarter end, down from 735 in the same quarter last year
- Same-Store Sales rose 2.5% year on year (-2.4% in the same quarter last year)
- Market Capitalization: $5.98 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Macy's’s Q3 Earnings Call
- Matthew Boss (JPMorgan) asked about the traction of reimagined stores and November trends. CEO Tony Spring explained that both traffic and average basket size improved, with continued strength into early Q4.
- Brooke Roach (Goldman Sachs) inquired about sustaining momentum and EBITDA margin prospects. Spring cited product variety and omnichannel balance, while CFO Tom Edwards highlighted ongoing tariff mitigation and disciplined reinvestment.
- Blake Anderson (Jefferies) questioned the behavior of aspirational customers and SG&A savings from store closures. Spring said customer breadth is increasing in Q4, and Edwards noted SG&A leverage from closures but stressed reinvestment for growth.
- Charles Grom (Gordon Haskett) sought clarity on consumer confidence and traffic drivers. Spring responded that guidance reflects a prudent outlook given a more choiceful consumer, while Edwards confirmed positive traffic and average unit retail (AUR) trends.
- Alex Straton (Morgan Stanley) asked about the competitive landscape and gross margin outlook. Spring asserted Macy’s is better positioned than peers, and Edwards attributed Q4 margin pressure mainly to tariffs and promotional flexibility.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will watch for (1) sustained traffic gains and customer satisfaction in Reimagine 125 and other upgraded stores, (2) measurable improvements in digital sales and fulfillment speed from the China Grove distribution center, and (3) ongoing progress in luxury banners and credit card revenues. Execution on cost containment and inventory discipline will also be critical indicators of Macy’s ability to meet its updated guidance.
Macy's currently trades at $22.53, in line with $22.70 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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