Bloomingdale's Momentum Strengthens Macy's Luxury-Led Growth Profile

Core Insights - Macy's Inc. has strengthened its luxury-led growth profile in Q3 of fiscal 2025, with Bloomingdale's showing significant performance under the Bold New Chapter strategy, achieving an 8.6% comparable sales increase, marking its fifth consecutive quarter of growth and the strongest performance in 13 quarters [1][9] Bloomingdale's Performance - Bloomingdale's growth was driven by strong demand in key categories such as ready-to-wear apparel, fine jewelry, shoes, and tabletop items, with the addition of high-profile designer brands enhancing its assortment and reputation [2] - Improved execution and elevated service levels contributed to a sequential increase in Net Promoter Scores, indicating stronger customer engagement [2] Earnings Stabilization - Bloomingdale's serves as a critical earnings stabilizer for Macy's, particularly as the core Macy's brand undergoes a longer-term turnaround, with its higher average unit retail and resilient affluent customer base helping to offset softness in mass categories [3][9] Bluemercury's Contribution - Bluemercury also posted positive comparable sales growth, driven by dermatological skincare and expanded brand partnerships, highlighting the importance of premium and luxury offerings in Macy's multi-brand strategy [4] Future Growth Plans - Macy's plans to build on Bloomingdale's momentum through targeted market expansion, continued digital investment, and selective rollout of small-format Bloomie's and outlet locations, aiming to leverage Bloomingdale's as a long-term growth engine [5] Valuation and Estimates - Macy's shares have surged 82.7% in the past six months, outperforming the industry's 62.1% growth [8] - The company is currently trading at a forward 12-month price-to-sales ratio of 0.29X, below the industry average of 0.52X [11] - The Zacks Consensus Estimate for Macy's fiscal 2025 earnings indicates an 18.2% year-over-year decline, while fiscal 2026 estimates suggest a 2.9% uptick, with recent upward revisions in earnings estimates for both fiscal years [12]