Macy's posts surprise profit with overhaul under new CEO resonating with
shoppers
[December 04, 2025] By
ANNE D'INNOCENZIO
NEW YORK (AP) — Macy’s posted a surprise third-quarter profit and its
strongest comparable sales in more than three years as an extensive
overhaul of the 167-year-old New York department store begins to
resonate with shoppers.
Macy’s raised its financial guidance for the year, but its outlook for
the crucial fourth quarter was more reserved, reflecting the mood of
many customers who have grown more selective in what they buy during the
holiday season.
Trading was volatile Wednesday as investors weighed what appeared to be
growing momentum for Macy's under new CEO Tony Spring, and anxiety over
the U.S. economy that threatens to curb holiday spending.
Comparable sales, a good barometer of a retailer’s health, have been an
ominous sign at Macy’s for several years now, serving each quarter as a
reminder that the storied department store chain had a long way to go.
On Wednesday, however, Macy’s posted a solid 3.2% increase for the
quarter ended Nov. 1, following a 1.9% increase during the second
quarter. Those sales includes licensed businesses like cosmetics.
For Macy’s, which also owns higher end stores like Bloomingdales and
Bluemercury, the strong performance is notable because all retailers are
navigating a challenging environment with consumers pulling back as
prices rise in a U.S.-initiated trade war.
Yet consumer spending is uneven with higher income households continuing
to spend more freely, while lower income families pull back in what is
often referred to a “K-shaped economy."
“The K economy is is real,” Spring told The Associated Press during a
phone interview on Wednesday. “We’re fortunate. Bloomingdales and
Bluemercury are solidly in the upper part of the K and about half of the
Macy’s customers are in the upper part of the K. But we do also appeal
to an aspirational customer and one that is choiceful. And so our job is
to make sure that we get our fair share of the business. "
Spring said Macy's had to be “realistic” and “sensible” with fourth
quarter guidance.
The company has leaned into promotions to lure shoppers who are tight
with their budgets, he said.
Under Spring, who took over the top job in early 2024, Macy’s has closed
unprofitable stores while investing heavily in modernizing locations.
The company has beefed up customer service in the fitting areas as well
as the shoe department. It’s also been trying to differentiate its
luxury business from its rivals with exclusive merchandise.
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Black Friday Shoppers wait in line to enter Macy's flagship store on
Friday, Nov. 28, 2025. (Photo by Angelina Katsanis/AFP)
 Roughly 50% of customers at the
Macy’s have a household income of over $100,000 and at
Bloomingdale’s and Bluemercury, there’s a larger percentage with
household incomes over $150,000.
As Macy's navigates what has become a volatile global trading
environment due to U.S. tariffs, it's trying to take a more surgical
approach when it comes to price increases. The company is working
with its suppliers to absorb some of the higher costs.
The impact of tariffs has been less than what Macy's had
anticipated, Spring said, but they remain a factor.
Macy’s reported net income of $11 million, or 4 cents per share, for
the quarter. Adjusted earnings per share was 9 cents, catching
industry analysts who had expected a loss of 13 cents off guard.
The company last year earned $28 million or 10 cents per share.
Net sales fell slightly to $4.71 billion, from $4.73 billion,
reflecting the closure of poorly performing stores. But that still
outperformed projections of $4.55 billion from analysts.
The stores it’s overhauled, 125 of them, booked comparable sales
growth of 2.7% growth, outperforming the pace when all stores are
included.
“While it would be an exaggeration to say that Macy’s is a retailer
at the very top of its game, there is no doubt that it is now
becoming a more proficient player on the retail field,” said Neil
Saunders, managing director of GlobalData. “The sloppy and slapdash
execution that once plagued the chain has largely disappeared.”
Macy’s now expects annual earnings per share of between $2 and
$2.20, well above its previous guidance of $1.70 to $2.05 per share.
It also projected annual 2025 sales in the range of $21.47 billion
to $21.62 billion, up from its previous guidance of $21.15 billion
to $21.45 billion.
Wall Street had been projecting earnings of $2 per share on sales of
$21.3 billion, according to FactSet.
Shares rose 2% Wednesday.
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