Macy's Store Revamp Shows Progress Amid 2026 Sales Concerns
Here's the thing about turnarounds… they're messy. Unpredictable. And honestly? Kind of fascinating.
Macy's just posted stronger-than-expected profits in the crucial fourth-quarter with comparable sales rising again. Their shares jumped 9% before the market even opened. Sounds like a win, right?
Well… sort of.
Because here's where it gets interesting (and a little complicated, like most real-world business stories): the company expects comparable sales to range from a 0.5% decline to a 0.5% increase for 2026. Translation? They're basically saying "we might grow a tiny bit, stay flat, or shrink a little."
Not exactly the victory lap you'd expect after that profit announcement.
But before we write this off as another struggling department store story , and trust me, there are plenty of those , let's dig into what's actually happening here. Because the details? They tell a way more nuanced story than the headlines suggest.
The Numbers That Actually Matter (And What They're Really Saying)
Let's start with what worked.
The company posted net income of $507 million, or $1.84 per share, for the three-month period ended Jan. 31, compared with $342 million, or $1.21 per share, in the year-ago period. That's… actually impressive. Nearly 50% profit growth year-over-year.
And here's where it gets really interesting:
The Revamp Results
Macy's overall comparable sales increased 0.4% for the quarter, but comparable sales for the 125 locations that have been revamped rose 0.9%.
See that difference? The stores they've been pouring money and effort into are performing more than twice as well as the overall chain. That's not just statistical noise , that's a signal.
The Luxury Play
While Macy's namesake brand is… let's call it "finding its footing," their upscale siblings are absolutely crushing it:
- Bloomingdale's comparable sales rose 9.9% in the latest quarter
- Bluemercury's comparable sales rose 1.3%
CEO Tony Spring said Bloomingdale's booked its highest holiday sales performance on record. In a challenging retail environment, that's basically like running a marathon uphill… and setting a personal record.
What CEO Tony Spring Is Betting On (And Why It Might Actually Work)
Tony Spring stepped into the company's top role about two years ago, and he's basically been handed one of retail's toughest assignments: revive a 164-year-old department store icon in the age of Amazon and fast fashion.
No pressure, right?
His strategy , which they're calling the "Bold New Chapter" (hey, at least it's optimistic) , has three main components:
1. The Store Rationalization Play
Macy's said it would close about 150, or more than a quarter, of its namesake stores by early 2027.
Spring said Macy's has closed a little over 80 of its namesake stores so far.
This isn't just cutting for cutting's sake. It's… well, think of it like pruning a plant. Sometimes you have to remove the weak branches so the healthy ones can thrive. The stores they're keeping? Those are getting serious investment.
2. The Modernization Gamble
The department store said an overhaul of its merchandise and improved customer service led to more spending by shoppers.
What does that actually look like on the ground? Better fitting room service. More localized merchandise (because what sells in Manhattan probably isn't what sells in Memphis). Fresher brands. Trendier items.
The kind of stuff that… honestly, should've been happening all along. But better late than never.
3. The Luxury Expansion
Spring isn't just talking about opening new Bloomingdale's and Bluemercury stores , he said he sees a lot of opportunity to reach new markets, though he's playing his cards close to the vest about exactly where and how many.
This makes sense when you think about it. If your luxury brands are your strongest performers, why not lean into that?
The Headwinds Nobody Wants to Talk About (But We Need To)
Okay, real talk time.
Even if Macy's executes perfectly , and that's a big "if" , they're sailing straight into some serious economic storms:
The Tariff Situation
The U.S. has upended global trade with tariffs that have driven prices higher, and many Americans have reprioritized where their paychecks go.
The company's full-year guidance takes into account macroeconomic and geopolitical factors, with the first quarter having the most meaningful impact from tariffs.
Translation? Their costs are going up, and they're trying to figure out how much they can pass on to customers who are already being careful with money.
The Consumer Spending Shift
People are still spending… they're just being way more selective about where. Value retailers like Walmart and Target are seeing strong traffic. Luxury brands are holding their own (hello, Bloomingdale's).
But the middle? The sweet spot where traditional department stores live? That's the squeeze zone.
The Geopolitical Wild Card
The Iran war that began late last month has added to pressures, driving sharp increases in the price of gasoline and diesel used predominantly in shipping.
This is the kind of thing that doesn't show up in quarterly guidance but can absolutely wallop retail margins.
What This Actually Means for Retail's Future
Here's what I find fascinating about the Macy's story (and why it matters beyond just one company):
The Department Store Model Isn't Dead… But It's Evolving
The 125 revamped stores outperforming the rest isn't an accident. It's proof that the format can work , but only if you're willing to invest in it properly. Better service, curated merchandise, localized selection… these aren't revolutionary ideas, but they require commitment and capital.
Luxury Is Resilient (For Now)
While Macy's struggles, Bloomingdale's thrives. This tells us something important about consumer segmentation in 2026. High-income shoppers are still spending. They want experiences, quality, and brands that feel special.
The Middle Market Challenge
Macy's and other retailers have new unknowns that make the year ahead harder to predict, causing the company to take a prudent approach with its outlook.
That "prudent approach"? It's code for "we honestly don't know what's going to happen, so we're planning for multiple scenarios."
The Questions Nobody's Asking (But Should Be)
Question 1: Can they move fast enough?
Retail transformation is like turning a cruise ship , it takes time. Macy's has shown progress, but will consumers wait around while they finish the turnaround? Or will they permanently shift to Amazon, Walmart, and specialized retailers?
Question 2: Is 125 stores enough?
Those revamped locations are performing well. But Macy's returned to positive growth with comparable sales increasing 1.5% for the full year , for the first time in three years.
The question: Should they be revamping more stores faster? Or is this the right pace to maintain quality?
Question 3: What happens when the tariff situation changes?
Spring said the company has continued to include the pre-Supreme Court ruling level of tariffs in its full-year forecast, and if the company gets a refund or if tariffs wind up at a lower level, that will be a benefit.
There's a lot of "ifs" in that sentence. And "ifs" don't make for great financial planning.
What Shoppers Should Actually Know
If you're a Macy's shopper (or used to be), here's what this means for you:
The Good News:
- The stores that are staying open are getting better , more staff, better selection, improved layouts
- Bloomingdale's is expanding, which means more luxury options
- Macy's shoppers have shown continued resiliency as they spend on fresh clothing and gravitate to newer brands and trendier items
The Reality Check:
- Expect prices to potentially increase due to tariffs and cost pressures
- If your local Macy's is one of the 150 slated for closure, start looking at alternatives
- The shopping experience might vary wildly between revamped stores and those that aren't being invested in
The Investor Perspective: Show Me, Don't Tell Me
This marked the fourth consecutive quarter of Macy's beating Wall Street's sales guidance.
That's… not nothing. Four quarters in a row means this isn't just luck or accounting tricks. There's something real happening.
But (and there's always a "but" in these stories):
The company expects net sales between $21.4 billion and $21.65 billion and adjusted earnings per share of $1.90 to $2.10.
Analysts are cautiously optimistic, but "cautiously" is doing a lot of work in that sentence. This is still very much a "show me" story , promising early results, but the real test is whether they can sustain and accelerate this momentum.
What Other Retailers Can Learn From This
The Macy's transformation playbook has some lessons that apply beyond department stores:
Lesson 1: Half-measures don't work
The revamped stores outperform because they got real investment , not just a fresh coat of paint, but meaningful operational changes. If you're going to transform, commit to it.
Lesson 2: Know who you're serving
Macy's is essentially running three different strategies: mainstream Macy's, upscale Bloomingdale's, and specialty Bluemercury. Each serves different customers. That focus is paying off.
Lesson 3: Transparency builds credibility
Spring said Macy's results show that its strategy is working, with all three brands growing in the fiscal year and holiday quarter.
He's not sugarcoating the challenges, but he's also pointing to concrete wins. That honesty matters.
The Bottom Line (Because You're Probably Skimming at This Point)
So… is Macy's turnaround working?
The answer is: It's complicated (I know, I know, not the decisive answer you wanted).
Here's what we know for sure:
- The strategy is showing real results in the stores where it's been implemented
- Luxury brands are thriving while the core Macy's brand is stabilizing
- The company beat expectations but faces significant headwinds
- This is a multi-year transformation, not a quick fix
The optimistic take: For the first time in three years, Macy's returned to positive growth. The ship is turning.
The realistic take: Turning the ship doesn't guarantee you'll avoid the iceberg. There are a lot of external factors beyond their control , tariffs, consumer spending, geopolitical instability.
The pragmatic take: Watch the next two quarters. If the revamped stores continue to outperform and Bloomingdale's maintains its momentum, this could be the beginning of a genuine comeback story. If not… well, retail history is littered with well-intentioned turnaround plans that didn't quite make it.
What to Watch For in 2026
Keep your eyes on these indicators:
- Q1 2026 results , This is when tariff impacts hit hardest according to management
- Same-store sales at revamped locations , Can they maintain the 0.9% growth rate?
- Store closure announcements , Are they sticking to the 150 number or adjusting?
- Bloomingdale's expansion news , Will they actually open new locations?
- Consumer sentiment data , Are Americans still prioritizing experiences and fashion, or pulling back further?
The Long Game
You know what's wild about the retail industry? It rewards patience and punishes short-term thinking… but it also moves so fast that patience can kill you.
Macy's is trying to thread that needle , playing the long game with their transformation while delivering quarterly results that keep Wall Street happy. That's… honestly exhausting to even think about.
CEO Spring said Macy's and other retailers have new unknowns that make the year ahead harder to predict, and I think that's the most honest thing any retail executive has said in a while.
We're in uncharted territory. Department stores transforming while tariffs loom. Luxury thriving while middle-market struggles. Consumer spending resilient but selective.
Will Macy's emerge from this transformation as a stronger, more focused retailer? Or will they become another cautionary tale about legacy brands that couldn't adapt fast enough?
The answer is probably… both. Some version of Macy's will survive , likely smaller, more focused, with a strong luxury component. But it won't look like the Macy's we grew up with.
And maybe that's okay. Maybe that's exactly what needs to happen.