Macy's stock surged after the company projected strong sales, fueled by spending from higher-income shoppers. The retailer anticipates continued momentum, with Bloomingdale's seeing significant gains. However, the outlook reflects concerns about the impact of inflation, fuel prices, tariffs, and potential global turmoil on consumer spending.
The outlook suggests wealthier Americans continue to propel consumer spending as years of inflation and the recent jump in fuel prices pressure lower-income households.shares rose after the company forecast stronger-than-expected sales in the current quarter, a sign that its fiscal year is off to a solid start as middle- and higher-income households continue to spend.
The department-store operator expects net sales as high as $4.63 billion in the first quarter, above the average estimate of analysts compiled by Bloomberg. Comparable sales, which measures revenue from stores that have been open at least a year and from online, will increase as much as 1.5% in the period, also above estimates. “We see a resilient consumer that continues to shop for newness and for fashion, particularly in the middle to upper income,” Chief Executive Officer Tony Spring said in an interview. “The lower-income consumer remains pressured.”Shares of Macy’s rose as much as 8% in early Wednesday trading, the most intraday since Nov. 25. The stock had declined about 23% this year through Tuesday’s close, worse than the S&P 500 Index’s roughly 1.9% dip.The outlook suggests wealthier Americans continue to propel consumer spending as years of inflation and the recent jump in fuel prices pressure lower-income households.The forecast also shows the retailer expects its momentum to continue after a strong holiday season. Macy’s posted sales and profit that beat Wall Street’s estimates in the quarter that ended Jan. 31. At its high-end Bloomingdale’s stores, comparable sales spiked nearly 10% in the most recent quarter.Still, Macy’s struck a cautious note by issuing a full-year outlook that fell shy of expectations, reflecting the possibility that tariffs and turmoil from the war in Iran could dampen spending.And while Macy’s hasn’t experienced inventory delays due to shipping chaos unleashed by the war, it’s a risk, he added. “Our intent is to not have guidance be a ceiling but be an opportunity for us to continue to deliver,” Spring said in the interview. “We guided and beat every single quarter in 2025.”As the largest US department-store chain, Macy’s is closely watched to gauge consumers’ appetite to spend on apparel, accessories, housewares and other discretionary items. Higher tariffs will raise costs more in the first half of the year than in the second, the company added. For the full year, Macy’s expects adjusted diluted earnings per share to range between $1.90 and $2.10, below the average estimate of analysts compiled by Bloomberg. Macy’s also said it annual expects comparable sales to increase as much as 0.5%, narrowly below Bloomberg estimates. The guidance excludes gains from real estate sales, a change the company made last month, and it’s not clear that all analysts have updated their estimates to account for that. The company’s high-end department store has benefited from luxury shoppers seeking alternatives while rival Saks Global Enterprises, which owns Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman, winds its way through a bankruptcy.It’s an opportunity for Bloomingdale’s to “capitalize on whatever disruption in the marketplace occurs and make sure that we take our fair share of the business,” Spring said. “We’re very bullish on Bloomingdale’s.”Also, wealthier consumers have been spending more freely than the mass-market shoppers who frequent the Macy’s nameplate. At cosmetics chain Bluemercury, which Macy’s owns, comparable sales rose 1.3%. Since he took the helm two years ago, Spring has been working to turn Macy’s into a smaller and more profitable company. He’s closing 150 underperforming Macy’s stores and investing more in the displays, staff and merchandise at the ones that remain open. He’s also selling off real estate. And Spring is focused on expanding the number of luxury brands on offer at Bloomingdale’s, while also opening smaller-format stores. Macy’s earned $3 million from selling real estate assets in the fiscal fourth quarter, down from $41 million in the prior period.While most analysts and many investors have applauded Spring’s efforts as a common–sense approach to try to reverse years of falling or lackluster sales — a fate faced by many US department stores — they’re uncertain it will be enough. “Rightsizing the store base should improve long-term profitability,” Telsey Advisory Group analyst Dana Telsey wrote in a recent research report. Short term, sales and profitability growth “remains more limited in our view amid macro pressures, traffic and tariff headwinds, and a competitive and potentially promotional retail landscape.”1 in 5 eligible taxpayers miss a major refund. Here’s how to get your money
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