Macy's Posts Surprise Q3 Profit and Boosts Yearly Forecast Amid Turnaround Efforts

Macy's Inc. reported a surprising profit for the third quarter of 2025, surpassing analyst expectations and raising its annual financial targets. The department store chain achieved an adjusted earnings per share (EPS) of $0.09, defying forecasts of a $0.13 loss. Comparable sales increased by 3.2%, marking the strongest growth in over three years. Despite these positive results, Macy's expressed caution regarding the upcoming holiday season, citing consumer selectivity influenced by inflation.

The company's net sales for the quarter were $4.71 billion, slightly down from $4.74 billion in the same period last year, a decline attributed to store closures. Macy's raised its full-year net sales forecast to between $21.475 billion and $21.625 billion, with annual adjusted EPS now expected to range between $2.00 and $2.20, up from prior estimates of $1.70 to $2.05. However, the retailer anticipates fourth-quarter adjusted EPS between $1.35 and $1.55, slightly below market estimates.

CEO Tony Spring highlighted that customers are becoming more discerning with their spending, particularly after Black Friday and Cyber Monday. "Consumers are more discerning about how and where they spend their dollars," Spring noted. This trend reflects broader consumer behavior, where shoppers are prioritizing essential purchases and seeking value amid economic uncertainties.

Under Spring's leadership, Macy's has been executing a comprehensive turnaround strategy, termed "A Bold New Chapter," announced in February 2024. Key components include plans to close approximately 150 underperforming stores through 2026, with about 50 closures by the end of 2024. The company is investing in the remaining 350 stores to enhance the shopping environment and customer experience. Additionally, Macy's is accelerating growth in luxury segments by opening new Bloomingdale's and Bluemercury locations and focusing on digital excellence to provide a seamless omnichannel experience.

These initiatives aim to revitalize the brand, improve operational efficiency, and better align with evolving consumer preferences. The company's strategic shifts may set a precedent for other retailers facing similar challenges, prompting industry-wide adaptations.

Following the earnings announcement, Macy's stock experienced a modest increase, reflecting investor confidence in the company's strategic direction and financial health. As of December 4, 2025, Macy's stock (NYSE: M) is trading at $22.31, with a slight decrease of $0.15 (-0.67%) from the previous close.

Macy's unexpected profit signals positive momentum from its turnaround efforts. However, the retailer remains cautious about the holiday season, emphasizing the need to adapt to evolving consumer behaviors and economic conditions.