Macy's, Inc., an omni-channel retail organization, operates stores, websites, and mobile applications in the United States. The company sells a range of merchandise, such as apparel and accessories for men, women, and kids; cosmetics; home furnishings; and other consumer goods under the Macy's, Bloomingdale's, and bluemercury brands. It also operates in Dubai, the United Arab Emirates, and Al Zahra, Kuwait under the license agreements. The company was formerly known as Federated Department Stores, Inc. and changed its name to Macy's, Inc. in June 2007. The company was founded in 1830 and is based in New York, New York.

Macy’s appears cheap on valuation multiples, but the fundamentals do not yet justify an aggressive upward revision. A P/E of 8.34, P/S of 0.27, P/B of 1.21, and P/FCF of 4.71 are noticeably below the industry median, indicating low market expectations and potential undervaluation. At the same time, the trend in the multiples does not look clearly improving: P/E and P/B have fluctuated, and P/FCF, after improving, remains volatile. Profitability is mixed: ROE of 14.44% and ROIC/ROI of 9.46% look decent, but ROE and ROA are still below industry benchmarks, while net margin of 3.29% and operating margin of 5.02% remain weak relative to the sector. Gross margin of around 40.7% has been stable over the years, which suggests that core pricing discipline has been maintained and there has been no sharp pressure on cost of goods sold. Liquidity is mixed: a current ratio of 1.59 looks comfortable, but a quick ratio of 0.44 is low, meaning the buffer excluding inventory is limited. Leverage is moderate: a debt/equity ratio of 0.50 and long-term debt of $2.43 billion look manageable, while the increase in shareholders’ equity to $4.93 billion supports the balance sheet. Cash generation and profitability remain a weak point: EBITDA of $323 million and net income of $63 million look modest relative to revenue of $4.89 billion. Revenue has generally held at comparable levels year over year, but without clear sustainable growth, while EBITDA and operating profit have fluctuated noticeably, increasing valuation risk. Dividend yield has fallen to zero, so the dividend factor no longer supports the investment case. Overall, this is more of a story about a cheap company with an acceptable balance sheet, but limited earnings quality and an unconvincing trend in operating efficiency. For an investor, this means fair value may be somewhat below the current operating benchmark until more sustained improvement in margins and earnings emerges.

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Macy's Inc

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Слабый индекс, значительно упал. Рынок не поддерживает быков.

Weak index, significantly down. The market does not support the bulls.

Средний индекс, без изменений. Отток средств из лонгов на высоком уровне.

Medium index, flat. Outflow of funds from longs at a high level.

Macy’s looks inexpensive on multiples, but weak margins, low liquidity excluding inventory, and volatile earnings limit re-rating potential.

Key Points
Most of Berkshire Hathaway’s stock picks are selected for obvious reasons.
Sometimes, the conglomerate's stock pickers see something most investors don't.
The recent addition of a brick-and-mortar retailer to Berkshire's portfolio makes more sense given that its business isn't struggling nearly as much as most investors seem to fear.
Investors are largely in agreement that most of Berkshire Hathaway's (NYSE: BRKA) (NYSE: BRKB) stock holdings are solid picks. Every now and then, though, one of its selections raises a few eyebrows.
That's what happened when Berkshire bought 3 million shares of department store chain Macy's (NYSE: M) in the first quarter of this year. Most people appreciate that the struggling company owns a real estate portfolio that may well be worth more than the organization's current market cap of just under $6 billion. To unlock that value, however, the company would need to take on the expensive -- and business-destructive -- headache of winding down at least some of its existing retailing operations, perhaps undermining the value of that real estate in the process.
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But maybe Berkshire Hathaway isn't looking at what's since grown to a 7.4 million share/$162 million stake in Macy's as a real estate bet after all. It could be a legitimate turnaround play.
Stabilizing
This premise could be difficult to digest given the so-called retail apocalypse that's been underway since the advent of e-commerce. And, anyone who's been keeping close tabs on the brick-and-mortar retailing industry's struggle probably knows that department store chains' revenue peaked in the early 2000s, and has been dwindling ever since.
Now take a closer look at some numbers from the U.S. Census Bureau. While not exactly growing, U.S. department stores' collective sales clearly aren't losing ground any longer either. The worst of this sliver of the retailing industry's degradation may be in the rearview mirror.
This makes some sense. Consumers eventually tire of what's common, and instead look for novelty. The in-store shopping that's been increasingly out of favor for many years has finally become a fresh, entertaining, and somewhat social experience again to a whole new tranche of shoppers. It would also be wrong to not point out that newly reinvented department stores are thriving on affordable luxury that appeals to a more affluent crowd.
Macy's is participating in the industry's revitalization, too. Last quarter's same-store sales growth was a reasonably healthy 2.7%, marking the fifth straight quarter that comparable sales improved on a year-over-year basis. The iconic retailer raised its full-year revenue and earnings guidance as well. Moreover, although analysts expect the department store chain's revenue to continue to decline slightly at least through 2028, the analyst crowd also expects greater efficiency and smarter merchandising to grow Macy's bottom line during this period.
Not the value trap that the low P/E suggests it is
There's still work to be done to be sure, and there's no guarantee that the company's business will continue firming up.
There's a respectable glimmer of hope that it can, though... certainly more than there's been in a while. Given that its retailing operation can at least tread water (and as such is no longer a liability), it's also no longer a drag on the value of Macy's real estate.
And from this perspective, the stock's trailing-12-month price-to-earnings ratio of just above 8 makes Macy's a compelling -- even if somewhat speculative -- bargain for Berkshire.
Should you buy stock in Macy's right now?
Before you buy stock in Macy's, consider this:
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James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.
Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

This Questionable Berkshire Hathaway Holding Actually Makes Sense

Key Points
Most Fortune 100 companies use Gemini Enterprise, and enterprise AI sales helped boost Google Cloud revenue by 82% in the second quarter.
Alphabet can continue to upsell and cross-sell enterprise users on more AI services for years to come.
With Space Exploration Technologies shares already available, an Anthropic IPO just around the corner, and OpenAI's IPO likely coming next year, investors will soon have plenty of leading artificial intelligence stocks to choose from.
But a subtler AI play is already available through Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG). Google Gemini is a leading AI model and is a popular choice among enterprise users. Indeed, Alphabet CEO Sundar Pichai recently said that almost 90% of Fortune 100 companies use Gemini Enterprise.
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Here's why that's great news for Alphabet stock and its investors.
Gemini Enterprise has already accelerated Alphabet's AI sales
A lot of attention is being paid to consumer AI markets right now, partly because individuals were among the earliest adopters of AI, long before companies began experimenting with AI chatbots and agents.
But an important shift occurred a couple of years ago as AI companies realized that building new features for enterprise users might be a more lucrative strategy. That's why you saw Anthropic pivot toward Claude Cowork, which has helped the company become a massive success. Anthropic's sales have skyrocketed nearly sevenfold over the past year, reaching an annualized revenue run rate of $65 billion.
Alphabet knows the enterprise strategy is key to AI's success, too. Pichai said on Alphabet's Q2 2026 earnings call: "It's great to see the wide adoption of Gemini Enterprise, with nearly 90% of the Fortune 100 using it."
Pichai said that millions of businesses, including Intel, PepsiCo, and Macy's, are using Gemini Enterprise to build AI agents, automate workflows, and improve cybersecurity. Their collective usage has resulted in more than 1 trillion paid tokens used in the past year.
That's great news for Alphabet and its investors because the more those Gemini Enterprise users spend their tokens -- on AI requests, image generation, analytics, etc. -- the more money Alphabet makes.
And it's already paying off for Alphabet. While it doesn't break out AI revenue on its own, management said Google Cloud revenue rose 82% in the second quarter to nearly $25 billion, driven by enterprise demand and AI products.
Why all of this matters for Alphabet investors
Enterprise users have more resources and are less likely to bounce around to different software tools and services than individual customers. This makes them very lucrative for tech companies, which is why both Anthropic and Alphabet (and more recently, OpenAI) have courted enterprise users so heavily.
With nearly 90% of Fortune 100 companies already having paid Gemini Enterprise accounts, Alphabet is off to a great start in locking in these customers for years to come. And because the company offers a wide variety of tech tools -- including web hosting, advertising, AI agents, email, etc. -- Alphabet has many opportunities to both upsell enterprise customers on additional tools and lock them into an ever-expanding AI ecosystem.
I know it's easy to assume that Anthropic and OpenAI will dominate the AI market in the coming years -- and both companies should certainly be on your investment radar -- but Alphabet is already proving its worth in the AI enterprise space. Investors would be wise not to ignore the company's impressive progress.
Should you buy stock in Alphabet right now?
Before you buy stock in Alphabet, consider this:
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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Intel. The Motley Fool has a disclosure policy.

Nearly 90% of the Fortune 100 Now Use Sundar Pichai's Gemini Enterprise Tool. Here's Why That Adoption Rate Matters for Alphabet Investors.

Macy's, Inc. M entered the second half with better momentum after second-quarter comparable sales rose 2.7% and adjusted earnings, excluding the tariff-refund benefit, increased 14% year over year. Management also raised its full-year 2026 sales, margin and earnings ranges.
Still, the third quarter is set to absorb heavier investment while lapping a 3.2% comparable-sales gain from a year earlier. The annual raise improves the cushion, but it does not remove the near-term earnings risk.
Raised 2026 Guidance Strengthens the Full-Year Setup
Macy’s now expects 2026 net sales of $21.675-$21.825 billion compared with $21.5-$21.75 billion previously. Comparable sales are projected to rise 1-1.5%, up from 0.5-1.2%, while the adjusted EBITDA margin outlook increased to 7.8-8%.
Adjusted earnings are now projected at $2.15-$2.35 per share compared with $2-$2.20 earlier. The upgrade follows a second-quarter beat in which net sales increased 1.1% to $4.866 billion and adjusted EBITDA rose to $457 million from $373 million.
Third-Quarter Earnings Risk Remains Clear
The near-term picture is softer. Macy’s expects third-quarter net sales of $4.65-$4.70 billion, comparable sales between a 0.5% decline and 0.5% growth and an adjusted EBITDA margin of 3.7-4%. Adjusted earnings are guided to a loss of 19-23 cents per share.
Management held its underlying second-half sales expectations after the second-quarter beat. Fiscal 2025 store closures also create roughly a $30 million third-quarter sales comparison headwind, while big-ticket categories remained below the prior-year level in the second quarter.
Macy's, Inc. Price, Consensus and EPS Surprise
Margin Offsets Help, But Q3 Carries More Investment
Cost pressures have eased. Macy’s now expects tariffs and fuel to reduce full-year gross margin by only five-15 basis points, versus 20-30 basis points previously. Supply-chain efficiencies are also expected to support gross margin in the second half.
Those offsets are partly delayed by reinvestment. Macy’s plans to reinvest $96 million of its $116 million tariff refunds, including $82 million in the third quarter. Full-year SG&A dollars are expected to rise 1.5-2.25%, with investments more concentrated in the third quarter.
Retail Peers Show a Mixed Demand Backdrop
Kohl's Corporation KSS raised its 2026 outlook after second-quarter comparable sales declined 0.9%. That combination underscores a mixed backdrop for department-store demand and margins.
Target Corporation TGT reported 3.8% comparable-sales growth and 8.7% digital comparable-sales growth in its second quarter while increasing its full-year sales view. That performance raises the competitive bar as Macy’s works to sustain traffic and digital engagement through fall and holiday.
What Should Investors do With Macy's Stock?
The raised outlook gives Macy’s more room to absorb a soft third quarter, but it does not eliminate execution risk. Better second-quarter trends, luxury momentum and lower tariff pressure are offsets. Negative third-quarter earnings guidance, heavier investment and unchanged second-half sales assumptions keep the near-term setup balanced.
The stock currently carries a Zacks Rank #3 (Hold), with a VGM Score of A, Value Score of A, Growth Score of B and Momentum Score of A. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The favorable Style Scores support its value and momentum characteristics, but they are designed to complement the Zacks Rank. For now, the #3 Rank favors a measured stance while investors watch third-quarter execution.
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Macy's, Inc. (M) : Free Stock Analysis Report

Can Macy's Raised 2026 Outlook Offset Third-Quarter Earnings Risk?

Macy's, Inc. M looks inexpensive on a relative basis after shares fell 8.5% in the past three months. At $22.08 on Sept. 11, the stock traded at a forward 12-month price-to-earnings ratio of 9.39, below 13.33 for the Zacks sub-industry, 21.60 for the Zacks sector and 19.84 for the S&P 500.
That discount is backed by better second-quarter execution and raised fiscal 2026 guidance. The caution is the second half, where third-quarter comparable sales are expected to range from a 0.5% decline to a 0.5% increase and adjusted earnings are projected to be negative.
Macy's Valuation is Cheap, But Not Versus Its Own History
The relative valuation discount is clear. Macy's forward 12-month price-to-earnings ratio sits well below its sub-industry and broad-market benchmarks, giving value-oriented investors a reason to keep the stock on the radar.
Its own history is less compelling. Over the past five years, the ratio has ranged from 3.56 to 11.76, with a median of 6.19. The current valuation is above the five-year median, while the shares have already gained 30.3% in the past year.
Q2 Momentum Gives the Discount Support
Second-quarter net sales increased 1.1% to $4.866 billion and comparable sales rose 2.7%. Excluding the 23-cent net tariff refund benefit, adjusted earnings were 40 cents per share compared with 35 cents a year earlier. Underlying gross margin improved about 10 basis points after excluding tariff refund and tariff-and-fuel effects.
Growth also broadened across the portfolio. Bloomingdale's comparable sales rose 11.3%, Bluemercury increased 6.2% and Reimagine 200 locations gained 1.9%. Macy's ended the quarter with $1.29 billion in cash, while first-half operating cash flow increased to $586 million from $255 million.
Macy's, Inc. Price, Consensus and EPS Surprise
Second-Half Growth is the Main Constraint
Third-quarter net sales are projected at $4.65-$4.70 billion, with adjusted earnings expected at a loss of 19-23 cents per share. Macy's raised full-year comparable-sales guidance to growth of 1-1.5% and adjusted earnings guidance to $2.15-$2.35 per share, but management kept its underlying second-half sales assumptions unchanged.
Investment spending also limits near-term operating leverage. Macy's expects selling, general and administrative expenses to rise 1.5-2.25% for fiscal 2026 and plans to reinvest $96 million of tariff refunds in brand building, value initiatives and Reimagine pilots. Fiscal 2025 store closures also create about a $145 million annual sales comparison headwind.
Retail Competition Keeps Execution Risk Elevated
Kohl's Corporation KSS reported a 0.9% second-quarter comparable-sales decline while raising its fiscal 2026 outlook, highlighting the mixed demand backdrop in department-store retail.
Target Corporation TGT reported 3.8% comparable-sales growth and an 8.7% increase in digital comparable sales in its second quarter. That performance raises the bar for retailers competing on assortment, value and convenience as Macy's works to sustain traffic through fall and holiday.
What Should Investors Do With Macy's Stock?
Macy's looks inexpensive relative to its industry and the broader market, but the stock is not unusually cheap compared with its own five-year history. Better execution, luxury-banner momentum and liquidity support the case, while soft third-quarter guidance and a heavy investment agenda argue against treating valuation alone as a buy signal.
The stock currently carries a Zacks Rank #3 (Hold), with a VGM Score of A, Value Score of A, Growth Score of B and Momentum Score of A. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The favorable Style Scores support the value and momentum profile, but they are designed to complement the Zacks Rank. For now, the #3 Rank supports a measured stance until second-half growth and operating leverage become more consistent.
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Macy's, Inc. (M) : Free Stock Analysis Report

Is Macy's Stock Cheap Enough to Buy Despite Uneven Second-Half Growth?

Key Points
Warren Buffett's successor as CEO of Berkshire Hathaway initiated a position this year.
The stock has a higher dividend yield than the S&P 500.
Trading at a steep value compared to the market, shareholders should also have upside potential.
Berkshire Hathaway doesn't pay a dividend. However, former CEO and legendary investor Warren Buffett purchased shares in companies that make payouts.
His successor, Greg Abel, has also purchased a dividend-paying stock this year that investors should examine closely. For those seeking dividends with upside potential, Macy's (NYSE: M) fits the bill.
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It's a new equity position for Berkshire this year. As of June 30, Berkshire owned 7.3 million shares valued at $173 million.
Berkshire has certainly shown it likes Macy's stock, but here's why the retailer deserves your consideration.
Supporting dividends
Macy's raised its quarterly dividend by 5% this year. That increased the payout from $0.1824 to $0.1915 per share. The board of directors has raised dividends annually since 2022. Macy's resumed payments in 2021 after taking the understandable step of suspending them in 2020 following the onset of the COVID-19 pandemic.
The sharp increase this year sends a positive signal about the company's confidence in its ability to maintain the higher rate. Still, it's important to check that it can sustain dividends.
A good measure you can use is the payout ratio, or the dividends as a percentage of earnings. Macy's has a comfortable 29% payout ratio, which should reassure investors.
The stock has an above-average dividend yield, too. Macy's shares yield 3.4% compared to 1.1% for the S&P 500. (SNPINDEX: ^GSPC)
Upside potential
Macy's share price gained 29.6% over the last year, through Sept. 8. That beat the S&P 500's 18.4% by 11.2 percentage points.
However, with Macy's in the midst of turning around its business, I think there's more upside potential. Management's "Bold New Chapter" strategy, launched a couple of years ago, included plans to improve the shopping experience, close unprofitable stores, expand its luxury Bloomingdale's and Bluemercury luxury brands, and improve the Macy's brand offerings.
You can see the improvement in the company's sales results. Same-store sales (comps) have been growing, including by 2.8% in the recently reported fiscal second quarter. All brands had positive comps, with Macy's, Bloomingdale's, and Bluemercury posting 1.1%, 11.3%, and 6.2%, respectively.
Importantly, the company's gross margin, excluding tariff refunds, expanded from 41.4% to 41.5%.
Despite these positive results, Macy's shares remain an attractive value opportunity. The stock has a price-to-earnings (P/E) ratio of about 9, a fraction of the S&P 500's P/E of 26.
Should you buy stock in Macy's right now?
Before you buy stock in Macy's, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Macy's wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $409,917!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,341,724!*
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*Stock Advisor returns as of September 12, 2026.
Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.
Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

1 Top Warren Buffett Stock for Dividend Investors

Macy’s, Inc. M reported second-quarter fiscal 2026 results, with earnings and revenues surpassed the Zacks Consensus Estimate. Both metrics increased from the year-ago quarter.
The company’s Bold New Chapter strategy continued to gain traction, with positive comparable-sales growth across Macy’s, Bloomingdale’s and Bluemercury. Bloomingdale’s posted a second consecutive quarter of double-digit comparable-sales growth, while the Reimagine 200 Macy’s locations maintained their outperformance.
However, Macy’s shares fell 4.7% yesterday despite the quarterly earnings and revenue beat and the higher full-year outlook. The market reaction indicates that investors may have focused on the projected third-quarter loss, the expected sequential moderation in comparable sales and the company’s decision to reinvest most of the tariff-refund benefit to support longer-term growth.
Macy's, Inc. Price, Consensus and EPS Surprise
More on Macy’s Q2 Results
Adjusted earnings, excluding the net tariff-refund benefit, were 40 cents per share, topping the Zacks Consensus Estimate of 37 cents and increasing from 35 cents in the year-ago quarter. Macy’s reported GAAP earnings of 62 cents per share and adjusted earnings of 63 cents per share, with both figures including a 23-cent net benefit from tariff refunds after reinvestment.
Net sales of $4,866 million surpassed the Zacks Consensus Estimate of $4,820 million and increased 1.1% year over year. Excluding the impact of fiscal 2025 store closures, net sales grew 1.9%. Total revenues advanced 1.2% to $5,059 million from $4,999 million in the prior-year quarter.
Comparable sales rose 2.7% on an owned-plus-licensed-plus-marketplace basis, marking the company’s fifth consecutive quarter of comparable-sales growth. Go-forward business comps, including go-forward locations and digital across the three nameplates, increased 2.8%.
Other revenues increased 3.2% to $193 million. Credit card net revenues grew 2% to $156 million, aided by a healthy credit portfolio and stable net credit card losses. Macy’s Media Network revenues advanced 8.8% to $37 million, reflecting higher partner engagement on the advertising platform.
Update on M’s Brand Performance
Comparable sales at the Macy’s nameplate increased 1.1% year over year, representing the fifth consecutive quarterly gain. Reimagine 200 locations posted comparable-sales growth of 1.9%, with increases in nine of the past 10 quarters. These stores account for nearly 60% of the go-forward Macy’s fleet and about 75% of go-forward store sales.
At Macy’s, strength in watches, dresses, petites, career sportswear, kids, handbags, fragrances and men’s and women’s shoes was partly offset by softness in plus sizes, intimates and women’s sleepwear. Big-ticket trends improved sequentially but remained below the prior-year level. Digital comps were also positive, supported by improved assortments and marketplace growth.
Bloomingdale’s comparable sales jumped 11.3%, marking the brand’s second consecutive quarter of double-digit growth and its highest second-quarter sales volume in 154 years. Growth was broad-based across channels, markets and categories, with notable strength in ready-to-wear, men’s apparel, fine jewelry, fragrances and tabletop.
Bluemercury comps increased 6.2%, driven by its Summer Party marketing campaign and demand for dermatological skincare, makeup and fragrances. New and remodeled stores continued to perform well during the quarter.
Insight Into Macy’s Margins & Expenses
The gross margin rate expanded 180 basis points to 41.5%, which beat our estimate of 39.8%. The quarter included a 180-basis-point benefit from net tariff refunds, partly offset by a 10-basis-point headwind from ongoing tariff and fuel costs. Excluding both effects, the underlying gross margin rate improved about 10 basis points, reflecting favorable brand mix and benefits from the Reimagine expansion, partly offset by channel mix.
Selling, general and administrative (SG&A) expenses increased 0.8% to $1.96 billion. The rise reflected higher variable costs tied to sales growth and continued investments in Bold New Chapter initiatives, partly offset by cost-management efforts. As a percentage of total revenues, the SG&A rate improved 20 basis points to 38.7%. We estimated SG&A expenses to increase 1% year over year in the second quarter of fiscal 2026.
Adjusted EBITDA increased 22.5% to $457 million from $373 million in the prior-year period. The adjusted EBITDA margin expanded 150 basis points to 9% of total revenues.
M’s Financial Snapshot: Cash, Inventory & Equity Overview
Macy’s ended the quarter with cash and cash equivalents of $1.29 billion, up from $829 million a year ago, with total debt of $2.43 billion. The company had $2 billion of available borrowing capacity under its asset-based credit facility and no material long-term debt maturities until 2030.
Merchandise inventories increased 2.5% year over year, broadly in line with comparable-sales growth. Management said inventory was well-positioned for the fall season, with a balanced mix of newness and evergreen merchandise.
For the first half of fiscal 2026, operating cash flow was an inflow of $586 million compared with $255 million in the year-ago period. Free cash flow was $262 million versus an outflow of $88 million a year earlier. Capital expenditures totaled $324 million.
During the second quarter, Macy’s returned $101 million to shareholders through $51 million in dividends and $50 million in share repurchases. The company bought back 2.2 million shares during the quarter and had about $1 billion remaining under its $2-billion authorization.
Macy’s Q3’26 Outlook
For the third quarter of fiscal 2026, this Zacks Rank #2 (Buy) company expects net sales of $4.65-$4.70 billion. Fiscal 2025 store closures contributed approximately $30 million to sales in the comparable prior-year period. Comparable sales are projected to range from a 0.5% decline to a 0.5% growth on an owned-plus-licensed-plus-marketplace basis.
The adjusted EBITDA margin is expected to be between 3.7% and 4%. The adjusted loss per share is forecast between 19 cents and 23 cents. The outlook incorporates a portion of the planned second-half reinvestment of tariff refunds and a tougher comparable-sales comparison against 3.2% growth in the prior-year quarter.
Sneak-Peek Into Macy’s FY’26 Guidance
Following the second-quarter beat, Macy’s raised its fiscal 2026 outlook. The company expects net sales of $21.675-$21.825 billion, up from the previously stated $21.5-$21.75 billion. The guidance continues to reflect the impact of fiscal 2025 store closures, which contributed approximately $145 million to prior-year sales.
Comparable sales are projected to increase 1-1.5%, above the earlier forecast of 0.5-1.2% growth. Other revenues are still expected to be $920 million. The gross margin rate is anticipated to be between 38.5% and 38.7%, while SG&A expenses are expected to increase 1.5-2.25% on a dollar basis.
The adjusted EBITDA margin is forecast at 7.8-8%, up from 7.7-7.9%. Adjusted earnings are projected at $2.15-$2.35 per share compared with the prior range of $2-$2.20. The outlook does not incorporate the effect of potential future share repurchases.
Macy’s expects full-year capital expenditures of $800-$825 million. The company anticipates a combined tariff and fuel gross-margin headwind of 5-15 basis points, narrower than the previously expected 20-30 basis points. Of the $116 million in tariff refunds received, management expects roughly $20 million or about 5 cents per share, to flow to full-year earnings, with the balance supporting brand building, selective value investments and additional Reimagine pilots.
Macy's Stock Past Three-Month Performance
Shares of this company have lost 19.2% over the past three months compared with the industry’s 4.7% decline.
Other Stocks to Consider
We have highlighted three other top-ranked stocks in the retail space, namely Kohl’s Corporation KSS, Target Corporation TGT and Ross Stores Inc. ROST.
Kohl’s is a United States based department store retailer. The company offers moderately priced apparel, footwear and accessories for women, men and children, along with beauty and home products. It flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Kohl’s current fiscal-year earnings and sales indicates growth of 17.3% and decline of 0.8%, respectively, from the year-ago actuals. KSS delivered a trailing four-quarter average earnings surprise of 84.8%.
Target offers guests fashionable, differentiated merchandise and everyday essentials at discounted prices. It currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for Target's current fiscal-year earnings and sales suggests growth of 37.8% and 4.7%, respectively, from the year-ago actuals. TGT delivered a trailing four-quarter average earnings surprise of 10.5%.
Ross Stores operates as an off-price retailer of apparel and home accessories, primarily in the United States. The company also holds a Zacks Rank #2 at present.
The Zacks Consensus Estimate for Ross Stores’ current fiscal-year earnings and sales indicates growth of 32.7% and 12.4%, respectively, from the year-ago actuals. ROST delivered a trailing four-quarter average earnings surprise of 11.2%.
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Macy's, Inc. (M) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).

Macy's Stock Down 5% Despite Q2 Earnings Beat, FY'26 View Raised

For Immediate Release
Chicago, IL – September 11, 2026 – Today, Zacks Investment Ideas feature highlights Macy’s M.
Should Income Investors Buy the Dip in Macy's Stock After Earnings?
Macy’s shares have slipped as much as 8% after the department-store giant reported Q2 results on Thursday morning, despite beating expectations and raising its full-year outlook.
The post-earnings pullback may be worth a closer look for income investors, particularly as Macy’s turnaround gains traction and its roughly 3.5% dividend yield appears increasingly well supported by improving cash generation and a healthier balance sheet.
Macy’s Q2 Results Strengthen the Turnaround Narrative
Macy’s delivered one of its better quarters in recent years, with net sales rising 1% year over year to $4.87 billion and edging estimates of $4.82 billion. Reported adjusted EPS reached $0.63, up from $0.35 a year ago, but management disclosed that the quarter included a $0.23-per-share net benefit from tariff refunds.
Excluding that benefit, Q2 adjusted EPS was $0.40, representing a much more modest 14% year-over-year increase and still topping expectations of $0.37 per share by 8%. Notably, Macy’s has now surpassed earnings expectations for seven consecutive quarters and has exceeded sales estimates for six straight quarters.
Furthermore, companywide comparable sales increased 2.7%, marking the fifth consecutive quarter of positive comps. Adjusted EBITDA also climbed to $457 million from $373 million, with the adjusted EBITDA margin improving to 9% from 7.5%.
Importantly, the results suggest Macy’s “Bold New Chapter” turnaround strategy is gaining traction rather than relying solely on cost cuts. Comparable sales at its Reimagine 200 Macy’s locations rose 1.9%, while Bloomingdale’s surged 11.3% to its highest second-quarter sales volume ever, and Bluemercury comps increased 6.2%.
Management subsequently raised its fiscal 2026 outlook, now calling for net sales of $21.68-$21.83 billion and adjusted EPS of $2.15-$2.35, compared with its previous EPS forecast of $2.00-$2.20.
Macy’s Dividend Looks Increasingly Sustainable
For income investors, Macy’s improving cash position may be just as important as its earnings recovery. The company generated $586 million of operating cash flow during the first half of the year, more than double the $255 million generated during the comparable period last year.
After $324 million of combined property, equipment, and capitalized software spending and $35 million of asset-sale proceeds, Macy’s produced roughly $297 million of cash flow after capital expenditures, comfortably covering the $101 million it paid in dividends.
Macy’s recently declared another quarterly dividend of $0.1915 per share, equating to about $0.77 annually. Furthermore, the annual payout represents only about 34% of the midpoint of Macy’s updated $2.15-$2.35 adjusted EPS guidance, leaving a reasonable cushion if retail conditions soften.
The balance sheet provides additional support. Macy’s finished Q2 with $1.3 billion in cash, up sharply from $829 million a year ago, against $2.4 billion of total debt. Perhaps more importantly, the company has no material long-term debt maturities until 2030, limiting near-term refinancing pressure.
Macy’s Appealing Valuation
Despite the turnaround progress, Macy’s valuation remains modest. At recent levels, Macy’s stock trades at around 9X forward earnings and less than 1X forward sales, with its price-to-free-cash-flow multiple also remaining low.
That valuation already leaves considerable skepticism baked into the shares and could provide an attractive entry point if Macy’s sustains positive comparable-sales growth and improved profitability.
Of course, Macy’s remains exposed to discretionary consumer spending, tariffs, and the structural challenges facing traditional department stores, meaning its dividend is not without risk. Still, improving sales trends, stronger cash generation, and ample liquidity make the payout look considerably better supported.
Bottom Line
The post-earnings dip in Macy’s stock may offer an appealing opportunity for income-oriented investors willing to tolerate the volatility of the retail sector. Reassuringly, Macy’s turnaround is producing tangible improvements across its brands, cash flow is comfortably covering the dividend, and its balance sheet provides additional financial flexibility.
At the moment, Macy’s stock currently sports a Zacks Rank #2 (Buy) and an overall “A” VGM Zacks Style Scores grade for the combination of Value, Growth, and Momentum.
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Macy's, Inc. (M) : Free Stock Analysis Report
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Zacks Investment Ideas feature highlights: Macy's

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Macy's (M) Q2 2026 Earnings Call Transcript

Macy’s M) shares have slipped as much as 8% after the department-store giant reported Q2 results on Thursday morning, despite beating expectations and raising its full-year outlook.
The post-earnings pullback may be worth a closer look for income investors, particularly as Macy’s turnaround gains traction and its roughly 3.5% dividend yield appears increasingly well supported by improving cash generation and a healthier balance sheet.
Macy’s Q2 Results Strengthen the Turnaround Narrative
Macy’s delivered one of its better quarters in recent years, with net sales rising 1% year over year to $4.87 billion and edging estimates of $4.82 billion. Reported adjusted EPS reached $0.63, up from $0.35 a year ago, but management disclosed that the quarter included a $0.23-per-share net benefit from tariff refunds.
Excluding that benefit, Q2 adjusted EPS was $0.40, representing a much more modest 14% year-over-year increase and still topping expectations of $0.37 per share by 8%. Notably, Macy’s has now surpassed earnings expectations for seven consecutive quarters and has exceeded sales estimates for six straight quarters.
Furthermore, companywide comparable sales increased 2.7%, marking the fifth consecutive quarter of positive comps. Adjusted EBITDA also climbed to $457 million from $373 million, with the adjusted EBITDA margin improving to 9% from 7.5%.
Importantly, the results suggest Macy’s “Bold New Chapter” turnaround strategy is gaining traction rather than relying solely on cost cuts. Comparable sales at its Reimagine 200 Macy’s locations rose 1.9%, while Bloomingdale’s surged 11.3% to its highest second-quarter sales volume ever, and Bluemercury comps increased 6.2%.
Management subsequently raised its fiscal 2026 outlook, now calling for net sales of $21.68-$21.83 billion and adjusted EPS of $2.15-$2.35, compared with its previous EPS forecast of $2.00-$2.20.
Macy’s Dividend Looks Increasingly Sustainable
For income investors, Macy’s improving cash position may be just as important as its earnings recovery. The company generated $586 million of operating cash flow during the first half of the year, more than double the $255 million generated during the comparable period last year.
After $324 million of combined property, equipment, and capitalized software spending and $35 million of asset-sale proceeds, Macy’s produced roughly $297 million of cash flow after capital expenditures, comfortably covering the $101 million it paid in dividends.
Macy’s recently declared another quarterly dividend of $0.1915 per share, equating to about $0.77 annually. Furthermore, the annual payout represents only about 34% of the midpoint of Macy’s updated $2.15-$2.35 adjusted EPS guidance, leaving a reasonable cushion if retail conditions soften.
The balance sheet provides additional support. Macy’s finished Q2 with $1.3 billion in cash, up sharply from $829 million a year ago, against $2.4 billion of total debt. Perhaps more importantly, the company has no material long-term debt maturities until 2030, limiting near-term refinancing pressure.
Image Source: Zacks Investment Research
Macy’s Appealing Valuation
Despite the turnaround progress, Macy’s valuation remains modest. At recent levels, Macy’s stock trades at around 9X forward earnings and less than 1X forward sales, with its price-to-free-cash-flow multiple also remaining low.
That valuation already leaves considerable skepticism baked into the shares and could provide an attractive entry point if Macy’s sustains positive comparable-sales growth and improved profitability.
Of course, Macy’s remains exposed to discretionary consumer spending, tariffs, and the structural challenges facing traditional department stores, meaning its dividend is not without risk. Still, improving sales trends, stronger cash generation, and ample liquidity make the payout look considerably better supported.
Image Source: Zacks Investment Research
Bottom Line
The post-earnings dip in Macy’s stock may offer an appealing opportunity for income-oriented investors willing to tolerate the volatility of the retail sector. Reassuringly, Macy’s turnaround is producing tangible improvements across its brands, cash flow is comfortably covering the dividend, and its balance sheet provides additional financial flexibility.
At the moment, Macy’s stock currently sports a Zacks Rank #2 (Buy) and an overall “A” VGM Zacks Style Scores grade for the combination of Value, Growth, and Momentum.
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Macy's, Inc. (M) : Free Stock Analysis Report

Should Income Investors Buy the Dip in Macy's (M) Stock After Q2 Earnings?

The following companies are expected to report earnings prior to market open on 09/10/2026. Visit our Earnings Calendar for a full list of expected earnings releases.
Macy's Inc (M)is reporting for the quarter ending July 31, 2026. The retail company's consensus earnings per share forecast from the 4 analysts that follow the stock is $0.37. This value represents a 9.76% decrease compared to the same quarter last year. In the past year M has beat the expectations every quarter. The highest one was in the 2nd calendar quarter where they beat the consensus by 550%. Zacks Investment Research reports that the 2027 Price to Earnings ratio for M is 10.11 vs. an industry ratio of 21.00.
MasterCraft Boat Holdings, Inc. (MCFT)is reporting for the quarter ending June 30, 2026. The leisure (recreational) company's consensus earnings per share forecast from the 2 analysts that follow the stock is $0.56. This value represents a 55.56% increase compared to the same quarter last year. In the past year MCFT has beat the expectations every quarter. The highest one was in the 1st calendar quarter where they beat the consensus by 25%. Zacks Investment Research reports that the 2026 Price to Earnings ratio for MCFT is 15.69 vs. an industry ratio of 31.90.
Shoe Station Group, Inc. (SHOE)is reporting for the quarter ending July 31, 2026. The shoes & retail apparel company's consensus earnings per share forecast from the 1 analyst that follows the stock is $0.32. This value represents a 54.29% decrease compared to the same quarter last year. In the past year SHOE has met analyst expectations twice and beat the expectations the other two quarters. The "days to cover" for this stock exceeds 13 days. Zacks Investment Research reports that the 2027 Price to Earnings ratio for SHOE is 8.92 vs. an industry ratio of 9.50.
The Lovesac Company (LOVE)is reporting for the quarter ending July 31, 2026. The home furnishings company's consensus earnings per share forecast from the 2 analysts that follow the stock is $-0.39. This value represents a 13.33% increase compared to the same quarter last year. LOVE missed the consensus earnings per share in the 4th calendar quarter of 2025 by -2.86%. The "days to cover" for this stock exceeds 12 days. Zacks Investment Research reports that the 2027 Price to Earnings ratio for LOVE is 32.14 vs. an industry ratio of 17.20, implying that they will have a higher earnings growth than their competitors in the same industry.
Designer Brands Inc. (DBI)is reporting for the quarter ending July 31, 2026. The retail (shoe) company's consensus earnings per share forecast from the 1 analyst that follows the stock is $0.25. This value represents a 26.47% decrease compared to the same quarter last year. In the past year DBI has beat the expectations every quarter. The highest one was in the 2nd calendar quarter where they beat the consensus by 250%. Zacks Investment Research reports that the 2027 Price to Earnings ratio for DBI is 13.68 vs. an industry ratio of 10.10, implying that they will have a higher earnings growth than their competitors in the same industry.
1-800-FLOWERS.COM, Inc. (FLWS)is reporting for the quarter ending June 30, 2026. The mail order retail company's consensus earnings per share forecast from the 2 analysts that follow the stock is $-0.79. This value represents a 14.49% decrease compared to the same quarter last year. The "days to cover" for this stock exceeds 48 days. Zacks Investment Research reports that the 2026 Price to Earnings ratio for FLWS is -3.07 vs. an industry ratio of 5.30.
Vince Holding Corp. (VNCE)is reporting for the quarter ending July 31, 2026. The textile company's consensus earnings per share forecast from the 2 analysts that follow the stock is $0.27. This value represents a 28.95% decrease compared to the same quarter last year. VNCE missed the consensus earnings per share in the 2nd calendar quarter of 2026 by -23.08%. Zacks Investment Research reports that the 2027 Price to Earnings ratio for VNCE is 11.03 vs. an industry ratio of 18.70.