Macy’s (M) forecast declining sales for 2026 despite beating fourth-quarter expectations, as the retailer’s store transformation shows early progress but faces economic headwinds. The cautious outlook reflects uncertainty around tariffs, gas prices and Middle East tensions that could dampen consumer spending.
Key Takeaways
- Fourth quarter beat expectations with positive comparable sales growth
- 2026 sales forecast of $21.4-21.65 billion below prior year
- Store revamp strategy showing early signs of success
Mixed Results Signal Cautious Recovery
Macy’s delivered its fourth consecutive quarter of beating sales expectations, with comparable sales rising 1.8% in the fourth quarter 1. This marked the first time in three years that the Macy’s nameplate returned to positive comparable growth, signaling stabilization after years of decline.
However, the company expects net sales to fall to $21.4-21.65 billion in 2026, down from $21.8 billion last year 2. The sales outlook roughly matched analyst expectations of $21.42 billion, but adjusted earnings guidance of $1.90-2.10 per share came in below Wall Street’s $2.17 expectation.
Store Strategy Shows Promise
Macy’s “Bold New Chapter” strategy appears to be gaining traction, with 125 upgraded “reimagined” stores delivering stronger results than the broader fleet 3. The company plans to expand this initiative to 200 locations, indicating confidence in the turnaround playbook.
Bloomingdale’s delivered standout performance with 9.9% comparable sales growth, its best quarter on record 4. The luxury division’s success demonstrates the benefits of focusing on retail execution rather than financial engineering.
Economic Uncertainty Clouds Outlook
CEO Tony Spring cited multiple macroeconomic risks weighing on the forecast, including potential tariffs, rising energy costs and ongoing geopolitical tensions 5. “Sitting here today, there’s more unknown than there is known,” Spring said in an interview with The Associated Press.
The company specifically noted that tariffs are expected to weigh more heavily in the first half of 2026 6. Management pointed to the same variables affecting retailers across the sector: gas prices, tariffs, geopolitical risk and questions about discretionary spending durability.
Transformation Strategy Continues
Despite the cautious near-term outlook, Macy’s reported meaningful improvements in customer satisfaction, with the Macy’s brand recording its best Net Promoter Score 7. The company continues closing underperforming locations while investing in stronger markets.
The results suggest Macy’s turnaround efforts are beginning to show results, even as external factors create uncertainty about the pace of recovery. Investors will be watching whether the store revamp strategy can offset macroeconomic headwinds in the coming quarters.
Not investment advice. For informational purposes only.
References
1Emma W. Thorne (March 18, 2026). “Macy’s says gas prices, tariffs and war could hit sales”. LinkedIn. Retrieved March 18, 2026.
2Melissa Repko (March 18, 2026). “Macy’s store revamp shows progress, but company expects sales to fall this year”. MSN. Retrieved March 18, 2026.
3Dan Sheehan (March 18, 2026). “Macy’s Beats, But Guides Lower as Macro Uncertainty Builds”. LinkedIn. Retrieved March 18, 2026.
4Katherine Hamilton (March 18, 2026). “Macy’s same-store sales boosted by Bloomingdale’s while guidance mixed”. MSN. Retrieved March 18, 2026.
5Anne D’Innocenzio (March 18, 2026). “Macy’s posts strong 4Q results but a reserved outlook reflects uncertainty around tariffs, Iran war”. Associated Press via LinkedIn. Retrieved March 18, 2026.
6CNBC (March 18, 2026). “Macy’s store revamp shows progress, but company expects sales to fall this year”. LinkedIn. Retrieved March 18, 2026.
7Macy’s Inc. (March 18, 2026). “2025 has been a transformative year for our company”. LinkedIn. Retrieved March 18, 2026.