Macy’s Lifts Outlook as Turnaround Takes Hold

Core Insights - Macy's has raised its full-year sales guidance and reported its highest comparable sales growth in 13 quarters, indicating positive results from its turnaround plan [1][7] Group 1: Financial Performance - The company increased its sales guidance for the full year to a range of $21.48 billion to $21.63 billion, up from a previous range of $21.15 billion to $21.45 billion [7] - Adjusted per-share earnings are expected to be between $2.00 and $2.20, an increase from the prior estimate of $1.70 to $2.05 [7] - Macy's reported a 31% increase in stock price this year, despite a recent decline of 0.79% to $22.53 [4] Group 2: Strategic Initiatives - The company has implemented a plan to close underperforming locations, enhance the shopping experience, simplify operations, and capture a larger share of the luxury market [2] - Macy's has introduced newer and more fashionable products from brands like Rodd & Gun, Reiss, and Prada Beauty, aiming to leverage new trends [4] - Investments in employee education have led to a record high in the third-quarter net promoter score, reflecting improved customer feedback [4] Group 3: Consumer Behavior - The company anticipates a "more choiceful" consumer during the fourth quarter, which includes the holiday season [3] - Despite expectations of choosiness among consumers, Macy's has observed continued spending from its predominantly middle to upper-income customer base [5] Group 4: Cost Management - To mitigate extra costs from tariffs, Macy's has been raising prices, collaborating with suppliers to share costs, and relocating production to countries with lower duties [6] - The impact of tariffs in the third quarter was less than expected, reducing the gross margin rate by 50 basis points [6]