Macy’s Q3 sales reached a more than three-year high due to strong holiday demand, and the company raised its full-year earnings guidance again.

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Macy's third-quarter results exceeded expectations across the board, with net sales of $4.71 billion reaching the highest level in 13 quarters, prompting the company to raise its full-year profit and sales guidance again, demonstrating that U.S. consumers are still willing to spend despite economic concerns.

On December 3, the latest financial report released by Macy's, the largest department store chain in the United States, showed that third-quarter total revenue was $4.91 billion, beating market expectations of $4.75 billion. Adjusted earnings per share were $0.09, significantly outperforming the market expectation of a loss of $0.14 per share. The strong performance was mainly due to robust holiday shopping demand and the success of the company's transformation strategies.

Macy's raised its full-year adjusted EPS guidance to $2.00-$2.20, higher than the previous estimate of $1.70-$2.05 and the market forecast of $1.99. The full-year net sales forecast was also raised to $21.48-$21.63 billion. Despite strong results, Macy's stock plunged over 6% in pre-market trading. Macy's share price has risen 34% so far this year, with particularly notable gains in the past week.

Macy's CEO Tony Spring stated: "Our third-quarter sales were the strongest in 13 quarters. Entering the holiday season, we are in a favorable position." This is the second time Macy's has raised its full-year targets this year, reflecting that its transformation initiatives are beginning to pay off.

Results Far Exceed Expectations, Profitability Significantly Improves

Macy's third-quarter financial performance comprehensively surpassed Wall Street expectations. Net sales reached $4.71 billion, beating analysts' forecast of $4.56 billion. More notably, profitability improved drastically, with adjusted earnings per share at $0.09 compared to the previously expected loss of $0.14 per share.

Strong sales performance led to better profit margins, while tariff relief measures and cost reductions also contributed to improved profitability.

Reports indicate that Macy's luxury brand Bloomingdale's saw a significant year-over-year increase in third-quarter net sales, and high-end beauty chain Bluemercury also achieved sales growth.

This performance has increased Wall Street's support for Spring’s transformation strategy. Since becoming CEO in 2024, Spring has focused on investing in Macy's stores with the greatest sales potential by increasing staffing, strengthening marketing, and updating store displays to boost performance.

Reportedly, Macy's is advancing its transformation through measures such as closing underperforming stores, testing small-format stores, and expanding its online product assortment. These initiatives are beginning to pay off in a challenging retail environment.

Analysts said: "Our research shows that Macy's women's apparel products and merchandise displays, both in stores—especially remodeled locations—and online, have improved." The company plans to close about 150 underperforming stores by 2026.

Strong Holiday Demand, Consumer Spending Resilience Evident

Macy's guidance for the rest of the year shows that management expects consumers to maintain some of the spending momentum seen during Black Friday and Cyber Monday. The company raised its full-year net sales forecast to the $21.5-$21.63 billion range.

Reportedly, like other retailers, Macy's is heavily relying on promotions this holiday season, holding promotions throughout November for Black Friday and Cyber Monday. The company noted that the optimistic guidance assumes consumers will be more selective during the crucial holiday shopping period in the second half of the year.

Previously, several retailers including Kohl’s Corp., Best Buy Co., and Dick’s Sporting Goods Inc. also raised their full-year guidance at the end of November, providing more evidence that U.S. consumers are still willing to spend at retailers offering needed goods at the right price.

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