Sept 10 (Reuters) - Macy's raised its annual sales and profit forecasts on Thursday after stronger performance at its upmarket Bloomingdale's and Bluemercury chains as higher-income shoppers keep spending despite broader economic uncertainty.
Under CEO Tony Spring, the department-store operator has been pursuing its "Bold New Chapter" turnaround strategy focused on its higher-end businesses. It is prioritizing higher-margin products and full-price sales, closing underperforming stores and redirecting
resources toward stronger markets to improve profitability.
In contrast, growth at its namesake stores, which make up the majority of its sales, has been lagging as they depend more heavily on value-conscious middle-income shoppers.
Macy's now expects fiscal 2026 net sales between $21.68 billion and $21.83 billion, compared with its prior forecast of $21.50 billion to $21.75 billion. It also sees annual adjusted earnings per share of $2.15 to $2.35, compared with its previous outlook of $2.00 to $2.20 per share.
The company said its forecast still followed a "prudent approach", given a competitive landscape, along with macroeconomic and geopolitical factors that could influence discretionary spending. It also accounted for reinvestment in store development.
Macy's, which has received about $116 million in tariff refunds so far, including $18 million in the current quarter, said it aims to invest most of the proceeds in its turnaround efforts and to mitigate fuel price uncertainty.
Shares of the company fell about 2% in premarket trading.
Investors could be looking past the one-time tariff refund benefit and focusing on the company still trying to find a footing at its namesake banner, while competition for discretionary dollars is intense, eMarketer analyst Suzy Davidkhanian said.
Second-quarter sales rose 1.1% to $4.87 billion, topping analysts' estimate of $4.83 billion, according to data compiled by LSEG.
Comparable sales at Bloomingdale's, which sells luxury apparel, footwear and accessories, rose 11.3%. Those at Bluemercury, which sells beauty and skincare products, grew 6.2%, compared with a 1.1% increase at Macy's namesake stores.
Macy's posted adjusted quarterly profit of 40 cents per share, excluding tariff refunds of 23 cents per share. Analysts had expected a profit of 37 cents per share.
(Reporting by Neil J Kanatt in Bengaluru and Danielle Kaye in New York; Editing by Pooja Desai)
