Department store chain Macy’s (NYSE: M) reported Q1 CY2026 results beating Wall Street’s revenue expectations, with sales up 2.1% year on year to $4.89 billion. The company expects the full year’s revenue to be around $21.63 billion, close to analysts’ estimates. Its non-GAAP profit of $0.13 per share was significantly above analysts’ consensus estimates.
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Macy's (M) Q1 CY2026 Highlights:
- Revenue: $4.89 billion vs analyst estimates of $4.82 billion (2.1% year-on-year growth, 1.5% beat)
- Adjusted EPS: $0.13 vs analyst estimates of $0.03 (significant beat)
- The company slightly lifted its revenue guidance for the full year to $21.63 billion at the midpoint from $21.53 billion
- Management raised its full-year Adjusted EPS guidance to $2.10 at the midpoint, a 5% increase
- Operating Margin: 2.3%, in line with the same quarter last year
- Free Cash Flow was $115 million, up from -$241 million in the same quarter last year
- Same-Store Sales rose 3% year on year (-1.2% in the same quarter last year)
- Market Capitalization: $5.72 billion
Company Overview
With a storied history that began with its 1858 founding, Macy’s (NYSE: M) is a department store chain that sells clothing, cosmetics, accessories, and home goods.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $22.72 billion in revenue over the past 12 months, Macy's is one of the larger companies in the consumer retail industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because it’s harder to find incremental growth when you’ve penetrated most of the market. To accelerate sales, Macy's likely needs to optimize its pricing or lean into international expansion.
As you can see below, Macy’s demand was weak over the last three years. Its sales fell by 3.2% annually as it closed stores.
This quarter, Macy's reported modest year-on-year revenue growth of 2.1% but beat Wall Street’s estimates by 1.5%.
Looking ahead, sell-side analysts expect revenue to decline by 1.5% over the next 12 months. it’s hard to get excited about a company that is struggling with demand.
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Store Performance
Number of Stores
A retailer’s store count often determines how much revenue it can generate.
Over the last two years, Macy's has generally closed its stores, averaging 3.3% annual declines.
When a retailer shutters stores, it usually means that brick-and-mortar demand is less than supply, and it is responding by closing underperforming locations to improve profitability.
Note that Macy's reports its store count intermittently, so some data points are missing in the chart below.
Same-Store Sales
A company’s store base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year.
Macy’s demand within its existing locations has barely increased over the last two years as its same-store sales were flat. This performance isn’t ideal, and Macy's is attempting to boost same-store sales by closing stores (fewer locations sometimes lead to higher same-store sales).
In the latest quarter, Macy’s same-store sales rose 3% year on year. This growth was an acceleration from its historical levels, which is always an encouraging sign.
Key Takeaways from Macy’s Q1 Results
This was a beat and raise quarter. It was good to see Macy's beat analysts’ revenue and EPS expectations this quarter. We were also excited its full-year guidance for the same two metrics was lifted. Overall, we think this was still a solid quarter with some key areas of upside. The stock remained flat at $21.84 immediately following the results.
Macy's may have had a good quarter, but does that mean you should invest right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).
