Macy's(M) - 2026 Q4 - Annual Results

Sales Performance - Macy's, Inc. reported fourth quarter net sales of $7.6 billion, a decrease of 1.7% compared to the fourth quarter of 2024, with comparable sales up 1.8%[3] - Bloomingdale's achieved a remarkable 9.9% increase in comparable sales during the fourth quarter[4] - For fiscal year 2025, Macy's, Inc. net sales decreased 2.4% to $21.8 billion, while comparable sales grew 1.5%[8] - Net sales for the 13 weeks ended January 31, 2026, were $7,639 million, a decrease from $7,768 million for the same period in 2025[30] - Total revenue for the 52 weeks ended January 31, 2026, was $22,621 million, compared to $23,006 million for the previous year, reflecting a decline of 1.7%[33] - For the 13 weeks ended January 31, 2026, net sales were $7,639 million, a decrease of 1.7% compared to $7,768 million for the same period in 2025[41] Financial Performance - The company generated operating cash flow of $1.4 billion and free cash flow of $0.8 billion, ending the year with $1.2 billion in cash and cash equivalents[4] - Macy's, Inc. achieved GAAP diluted EPS of $1.84 and adjusted diluted EPS of $1.67, both exceeding guidance[4] - Operating income for the 13 weeks ended January 31, 2026, increased to $745 million, representing 9.4% of total revenue, up from $500 million or 6.2% in the prior year[30] - Net income for the 52 weeks ended January 31, 2026, was $642 million, compared to $582 million for the previous year, marking a year-over-year increase of 10.3%[33] - Basic earnings per share for the 13 weeks ended January 31, 2026, rose to $1.91, up from $1.23 in the same period last year[30] - Adjusted EBITDA for the 13 weeks ended January 31, 2026, was $840 million, compared to $903 million for the same period in 2025, reflecting a decrease of 7%[49] - The company reported net income of $507 million for the 13 weeks ended January 31, 2026, compared to $342 million for the same period in 2025, an increase of 48.3%[49] - Free cash flow for the 52 weeks ended January 31, 2026, was $797 million, an increase from $679 million for the 52 weeks ended February 1, 2025[51] Revenue Sources - Other revenue increased by 20.2% to $857 million, driven by strong performance in credit card revenues and Macy's Media Network[8] - Other revenue sources, including Macy's Media Network, contributed $72 million for the 13 weeks ended January 31, 2026, up from $64 million in the prior year[41] - Credit card revenues for the 13 weeks ended January 31, 2026, increased to $205 million, representing 2.7% of net sales, up from $175 million or 2.3% in the prior year[41] Cost and Expenses - SG&A expenses for fiscal year 2025 decreased by $90 million to $8.2 billion, but as a percentage of total revenue, it increased to 36.4%[9] - Gross margin for the 52 weeks ended January 31, 2026, was $8,267 million, representing 38.0% of net sales, compared to $8,553 million or 38.4% in the previous year[33] - Gross margin for the 52 weeks ended January 31, 2026, was impacted by various costs, with total EBITDA reported at $1,873 million, up from $1,760 million in the previous year[49] Future Outlook - The company plans to expand its strategic initiatives to 75 additional stores under the "Reimagine 200" program for 2026[1] - For fiscal year 2026, Macy's, Inc. expects net sales between $21.4 billion and $21.65 billion, with comparable sales change projected between -0.5% and 0.5%[20] Assets and Liabilities - Total assets as of January 31, 2026, were $16,238 million, a slight decrease from $16,402 million as of February 1, 2025[35] - Current liabilities decreased to $4,493 million as of January 31, 2026, compared to $4,524 million in the previous year[35] - Long-term debt decreased to $2,432 million as of January 31, 2026, down from $2,773 million as of February 1, 2025[35] Taxation - The effective income tax rate for the 13 weeks ended January 31, 2026, was 23.4%, compared to 21.6% for the same period in 2025, primarily due to state and local taxes[41] Losses - The company experienced a net loss from interchange fee settlements of $328 million for the 13 weeks ended January 31, 2026, compared to no such losses in the previous year[49]