Abstract
Macy's will report its quarterly results on September 10, 2026, Pre-MKt; investors are gauging whether improved operating execution and disciplined promotions can convert into a rebound in earnings quality and cash generation this quarter.
Market Forecast
Consensus currently anticipates Macy's revenue of 4.82 billion US dollars this quarter, up 1.19% year over year, with adjusted EPS around 0.37, up 100.55% year over year; EBIT is projected at 159.79 million US dollars, up 74.62% year over year. Forecast detail for gross profit margin and net profit margin has not been disclosed in the returned datasets, so the focus is on operating leverage and mix to drive the large EPS inflection implied by the estimates.
The main business remains merchandise net sales, which reached 4.68 billion US dollars last quarter and rose 1.81% year over year; the near-term outlook emphasizes tighter inventory, more targeted promotions, and better full-price sell-through.
Among disclosed lines, Other revenue was 210.00 million US dollars last quarter; while separate year-over-year growth was not disclosed, management actions around cost discipline and revenue mix suggest it could provide incremental stability alongside net sales.
Last Quarter Review
Macy's last reported quarter delivered revenue of 4.68 billion US dollars (up 1.81% year over year), a gross profit margin of 41.54%, GAAP net profit attributable to the parent company of 63.00 million US dollars with a net profit margin of 1.29%, and adjusted EPS of 0.13 (down 18.75% year over year). Quarter on quarter, GAAP net profit contracted by 87.57%, illustrating how seasonal leverage and promotional cadence pressured earnings between reporting periods.
A notable execution highlight was the outperformance versus market expectations: revenue exceeded consensus by 69.44 million US dollars, and EPS surpassed estimates by 0.10, pointing to stronger-than-modeled early progress on merchandising, traffic conversion, and expense control.
In the business composition, net sales contributed 4.68 billion US dollars (approximately 95.71% of total), growing 1.81% year over year, while Other revenue was 210.00 million US dollars (about 4.29%), underscoring that merchandise performance remains the primary driver of group outcomes.
Current Quarter Outlook
Main business: merchandising execution, inventory discipline, and promotional efficacy
This quarter’s setup for merchandise net sales hinges on three interlocking levers: traffic, conversion, and average unit retail. The prior quarter’s 1.81% year-over-year revenue increase came alongside a 41.54% gross margin, a level that suggests controlled discounting and improved mix in key categories are starting to support margin quality. With inventory positioned more tightly and promotions increasingly targeted, Macy's can nudge full-price sell-through higher, cushioning gross margin even if unit volumes remain steady.
Conversion in stores tends to benefit from clearer adjacencies and localized assortments, areas Macy's has been prioritizing through planogram simplifications and curated brand introductions. These changes, together with enhanced omnichannel services such as buy-online-pickup-in-store, typically compress friction in the path to purchase, lifting realized sales without diluting gross margin. On the digital side, sharper targeting and retargeting can improve traffic yield even in periods of uneven demand.
Pricing actions are likely to remain surgical rather than broad-based. The revenue mix within apparel, accessories, beauty, and home is crucial for maintaining the gross margin foundation. If full-price rates hold and clearance remains contained, the earnings profile should exhibit more operating leverage than last year, which is consistent with the consensus EPS jump of 100.55%. However, the cadence of back-to-school and early seasonal receipts will matter; softer sell-through could require heavier markdowns late in the quarter, which would compress the implied leverage that consensus currently embeds.
Most promising business: contribution from Other revenue and margin-accretive streams
Other revenue, at 210.00 million US dollars last quarter, is comparatively small but offers important incremental contribution to cash generation because it is generally less inventory-intensive and can be margin-accretive. Fee-based or partnership-related line items often carry structurally higher margins than merchandise, helping to buffer operating income when merchandise cycles are in transition. In periods when the company moderates discounting to protect gross margin, these ancillary lines can help stabilize EBIT, reinforcing deleveraging risks from SG&A.
While separate year-over-year growth for Other revenue was not disclosed, the strategic emphasis on elevating the customer experience and refining the revenue mix indicates this line could remain a steady ballast. Investors should watch whether the company can expand attachment around services and loyalty-linked monetization, because even modest growth here can have an outsized effect on operating margin. If Other revenue trends upward while merchandise margins remain intact, it would validate the multitier strategy that consensus seems to be baking into the forecasted 74.62% year-over-year increase in EBIT.
The tactical implication is that Macy's has room to balance revenue growth with margin preservation. The more it can lean on mix benefits and less inventory-intensive income lines during promotional peaks, the more likely the company can translate a low-single-digit sales gain into a larger earnings increment, aligning with the step-change consensus estimates for EPS.
Key stock-price swing factors this quarter
Gross margin trajectory will be the principal swing factor given its leverage to EPS. With last quarter’s 41.54% gross margin as the baseline, investors will scrutinize clearance rates, markdown depth, and mix across categories to judge whether the company can deliver the earnings inflection implied by the 100.55% year-over-year EPS estimate. Any sign of margin erosion to sustain traffic would likely reduce confidence in the implied EBIT and EPS step-up.
Inventory composition and turns represent the second critical lever. If inventory receipts closely match demand across sizes and colorways, the company can preserve pricing and reduce the need for margin-dilutive promotions. Conversely, an imbalance could compress the gross margin and curtail the magnitude of operating leverage.
External cost inputs, including freight and import-related costs, remain a watch item. Earlier commentary this year suggested profit headwinds from tariffs; the market will look for evidence that these pressures are moderating or being offset through pricing and mix. Finally, management’s tone on the balance of promotional intensity versus full-price sell-through, and any update to full-year guidance, will likely set the near-term stock reaction, given the consensus positioning for a large year-over-year profit rebound.
Analyst Opinions
Bullish views dominate the collected opinions from January 1 through September 3, 2026, with no identified bearish calls in the reviewed period; the ratio of bullish to bearish is 100% to 0%. Several well-followed institutions have expressed positive stances, citing better-than-expected execution and more confident guidance earlier in the year. After the last report, some large banks raised target prices, reflecting improved fundamentals and optimism that operating initiatives can produce a more durable earnings base. The announced quarterly dividend of 0.19 per share for payment on October 1, 2026, further signals consistent capital return, a factor bulls see as reinforcing total-return potential while the operational turn proceeds.
What underpins the bullish case for this quarter is the magnitude of the estimated earnings re-acceleration. Consensus points to adjusted EPS around 0.37, up 100.55% year over year, and EBIT of 159.79 million US dollars, up 74.62% year over year, on revenue growth of 1.19%. This indicates the buy side expects material margin recapture and operating leverage from a relatively modest top-line base. Analysts leaning positive argue that the company’s tighter inventory posture and sharper promotions can drive better full-price realization and reduce clearance, while category mix improvements help hold gross margin near last quarter’s level or better. These same analysts emphasize the significance of disciplined expense control in curbing SG&A deleverage, which amplifies the pass-through of each sales dollar to operating profit.
Institutional commentary has also highlighted improving store traffic patterns and stabilizing conversion. Bulls believe that the company’s recent assortment refreshes and enhanced in-store service have begun to lift the quality of sales. Together with targeted digital marketing and omnichannel fulfillment, this can compress friction in the shopping journey and lift revenue per visit without leaning into deep discounts. If the company delivers on these operational milestones, the step-up implied in consensus EPS becomes plausible despite only a low-single-digit revenue increase.
The bullish camp is watching a handful of proof points at the print: whether gross margin holds versus last quarter’s 41.54% despite seasonal clearance, whether inventory is aligned to demand in key sizes and colorways, and whether SG&A shows signs of disciplined cost control relative to sales. Confirmation here would support the current top-down view that revenue need not accelerate dramatically for EPS to expand, given a more favorable margin structure. Bulls also point to the ongoing cash return, with the quarterly dividend intact, as a sign that the balance sheet and liquidity position can accommodate both reinvestment in the operating model and shareholder distributions.
In sum, prevailing institutional sentiment assumes that margin stabilization and a cleaner inventory position can translate into a disproportionate earnings recovery this quarter, even if top-line growth remains modest. The consensus set-up leaves limited room for a significant shortfall in gross margin or a resurgence in markdown activity, but if the company executes on mix, inventory turns, and promotions as expected, the bullish majority sees a credible path to meeting or modestly exceeding the current revenue and EPS estimates for the period ending with the September 10, 2026, announcement, Pre-MKt.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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