Abstract

Macy’s, Inc. will report fiscal first-quarter results on June 3, 2026 Pre-Market; investors are looking for modest year-over-year revenue growth alongside near break-even adjusted EPS as management executes its turnaround plan.

Market Forecast

Consensus for the current quarter points to revenue of 4.61 billion US dollars, up 2.41% year over year, adjusted EPS near 0.03, and EBIT of 39.10 million US dollars, implying a 52.60% year-over-year decline; management’s prior update indicated net sales of 4.58–4.63 billion US dollars and adjusted EPS between -0.01 and 0.01. The company did not provide explicit gross or net margin targets for the quarter. The main business continues to be driven by net sales and omnichannel execution, with last quarter’s profitability supported by a 37.51% gross margin and a 6.40% net profit margin, and current-quarter net sales projected to rise modestly year over year given the 4.58–4.63 billion US dollars guidance range. The most promising near-term driver sits within the guided net sales envelope, where the targeted 4.61 billion US dollars midpoint implies approximately 2.41% year-over-year growth and reflects assortment refresh, store optimization, and ongoing digital improvements.

Last Quarter Review

Macy’s, Inc. posted last quarter revenue of 7.64 billion US dollars (down 1.66% year over year), a gross profit margin of 37.51%, GAAP net income attributable to shareholders of 507.00 million US dollars, a net profit margin of 6.40%, and adjusted EPS of 1.67 (down 7.22% year over year). A notable highlight was profitability outperformance versus external projections: EBIT reached 680.00 million US dollars, beating the prior consensus by 19.95% on stronger-than-anticipated holiday execution. Main business composition remained concentrated in net sales of 7.64 billion US dollars (down 1.66% year over year on a company-level basis), while Other revenue contributed 277.00 million US dollars.

Current Quarter Outlook

Core Net Sales and Omnichannel Execution

The core engine this quarter is the guided net sales range of 4.58–4.63 billion US dollars, which points to modest year-over-year growth at the midpoint and aligns closely with the 4.61 billion US dollars consensus. The company signaled a near break-even adjusted EPS profile (-0.01 to 0.01), making operating discipline and promotion management key to translating revenue into earnings. Against this backdrop, assortment and merchandising cadence will matter as much as underlying traffic, because the quarter’s profitability math is highly sensitive to mix and markdowns given the narrow EPS corridor.

Inventory positioning coming out of the holiday quarter provides an important setup. Last quarter’s margins benefited from targeted promotions, and sustaining a balanced approach to discounts can help protect gross margin even if discretionary demand remains selective early in the fiscal year. The company’s prior quarter net profit margin of 6.40% and gross margin of 37.51% underscore that the profitability base is intact; the task for this quarter is to defend margin rate while driving a low single-digit improvement in net sales within the guided range.

Omnichannel execution remains central. The site-to-store and store-to-home capabilities, coupled with loyalty engagement, are designed to lift conversion and average order value without relying on broad-based discounting. With a top-line guide that pencils to roughly 2.41% year-over-year growth at the midpoint, even small gains in conversion and fulfillment cost per order can help EBIT approach or exceed the roughly 39.10 million US dollars implied by consensus. This quarter’s performance will be evaluated on how effectively the company channels traffic into full-price or strategically promoted sales, translating to net sales resilience without compromising rate.

High-Potential Initiatives: Store Optimization and Beauty Specialty

Execution under the “Bold New Chapter” plan continues to reposition the store fleet by prioritizing higher-performing locations and rightsizing underperformers over a multi-year timeline. In the short term, this can compress reported net sales where closures overlap with the quarter’s base, but it is designed to enhance productivity and mix in the remaining fleet, which should be margin accretive when paired with improved merchandising. The combination of curated assortments and localized inventory aims to sustain sell-through velocity and reduce markdown risk, which is critical in a quarter where adjusted EPS guidance centers on breakeven.

The company’s specialty beauty footprint and premium-oriented banners are strategically important because they can deliver higher basket sizes and more resilient repeat purchasing behavior. While segment-level revenue is not disclosed for the quarter, the beauty and premium categories are positioned to contribute disproportionately to margin rate if they continue to outpace discretionary softlines within the guided net sales range of 4.58–4.63 billion US dollars. Last quarter’s overall gross margin of 37.51% provides a baseline; maintaining category mix toward higher-margin beauty and premium offerings can help stabilize rate this quarter, even as overall EBIT is expected to be 39.10 million US dollars and down year over year.

Digital experience improvements—ranging from site search and recommendations to fulfillment speed and returns efficiency—complement the store optimization initiative. These elements collectively support the mid-single-digit traffic and conversion targets needed to land the midpoint of the sales guide and keep markdown leakage limited. With adjusted EPS guided to a narrow band around zero, every 50–100 basis points of improvement in fulfillment cost per order, return rates, or attachments can be the difference between a small profit and a small loss in the quarter.

What Could Move the Stock This Quarter

The most immediate stock drivers are top-line delivery versus the 4.58–4.63 billion US dollars guide and the degree to which gross margin rate holds amid promotional noise. A print modestly above the midpoint on net sales—paired with stable markdowns—could lift confidence in full-year guardrails and offset the currently soft EBIT trajectory implied by the 39.10 million US dollars consensus. Conversely, if demand proves uneven and promotional intensity rises, the narrow EPS range could tilt to the lower end, even if revenue prints in line, given the high sensitivity of quarterly earnings to rate and SG&A timing.

Another potential catalyst is management’s qualitative commentary on early-season sell-through and category mix. Investors will parse whether categories like beauty and occasion-driven apparel are outperforming baseline assumptions, as this would support a more favorable margin mix in subsequent quarters. Any update on store optimization milestones, including closure pacing or productivity gains at retained locations, could also influence expectations for the back half, where more of the operating leverage is likely to materialize.

Finally, capital allocation and signals of external validation matter for sentiment. The recent disclosure of a new equity stake by a prominent long-term investor has already improved the discussion around execution risk and downside protection. If management pairs an in-line or better quarter with reaffirmed or tightened full-year parameters and evidence of operating discipline, the narrative could continue to shift toward durability of the turnaround. If, however, the company has to lean on promotions to defend traffic, the market may extrapolate a slower trajectory to margin recovery despite stable revenue.

Analyst Opinions

Bullish views outweigh cautious opinions during the January 1, 2026 to May 27, 2026 window, with roughly seven-in-ten commentaries skewing positive versus three-in-ten highlighting guide conservatism and EBIT pressure. The positive camp points to the company’s guided net sales range of 4.58–4.63 billion US dollars and the near break-even adjusted EPS corridor, arguing that the setup is appropriately conservative for an early-year quarter and leaves room for incremental margin gains from mix and cost control. A notable institutional signal reinforcing this stance is the disclosure of a roughly 3 million-share stake—about 1.1%—by Berkshire Hathaway, which investors interpret as a vote of confidence in the turnaround’s execution path.

Bullish previews emphasize three core arguments. First, the 2.41% year-over-year revenue growth implied by consensus at 4.61 billion US dollars aligns with management’s range and is achievable without requiring a step-change in demand. This reduces the risk of a negative surprise on the top line and shifts the focus to margin stewardship, where last quarter’s 37.51% gross margin provides a credible base. Second, the near-zero adjusted EPS guide means even modest improvements in markdown discipline, category mix, and omnichannel cost per order can produce a small earnings beat, especially if inventory is clean and sell-through is healthy in seasonal categories. Third, successful execution on store optimization and premium category emphasis can create a bridge to stronger second-half economics, a view supported by the institutional endorsement evidenced by the new strategic holder.

Supporters also highlight that last quarter’s EBIT of 680.00 million US dollars exceeded prior expectations by 19.95%, indicating management’s ability to deliver on controllables even when revenue is slightly lower year over year. In their view, the current-quarter EBIT consensus of 39.10 million US dollars properly reflects seasonality and conservatism, setting a bar that can be surpassed if gross margin rate is defended and SG&A is sequenced prudently. They further note that the net profit margin of 6.40% last quarter demonstrates underlying profitability, and that the pathway to full-year stability depends more on mix and cost discipline than on outsized revenue growth in the current quarter.

While acknowledging that adjusted EPS is guided to a narrow band around zero and EBIT is expected to decline 52.60% year over year this quarter, bullish observers contend that the key to the stock reaction will be how management frames trajectory rather than the absolute level of Q1 earnings. If the company shows evidence that initiatives in store optimization, category focus, and digital improvements are gaining traction, the market could look past early-year EBIT softness. In combination with the visible support from a long-term institutional holder, that message is seen as sufficient to keep sentiment constructive provided the 4.58–4.63 billion US dollars net sales guide is met or modestly exceeded.

In summary, the prevailing view among institutions and market commentators is constructive: the quarter is set up with attainable top-line targets, manageable earnings sensitivity, and multiple levers—category mix, markdown control, and cost discipline—that can tilt results toward the favorable end of guidance. With consensus calling for 4.61 billion US dollars of revenue (+2.41% year over year) and adjusted EPS around 0.03, the emphasis is on execution quality and forward commentary as the catalysts for the stock’s next move, rather than on a material change to near-term demand assumptions.