Macy’s raises 2026 outlook after tariff-aided EPS beat, stronger margins

The quarter beat a low published bar. Analysts expected roughly $4.81 billion of revenue and $0.37 of adjusted EPS; Macy’s delivered $4.866 billion of net sales and $0.63 of adjusted diluted EPS. The result was helped by a $0.23-per-share net tariff-refund benefit, but adjusted EPS still reached $0.40 excluding that benefit — a narrower, underlying beat. (Financial Highlights)

The quality of the quarter was better than the headline suggests. Gross margin expanded 180 basis points, although the entire reported improvement came from tariff refunds; excluding that benefit and ongoing tariff and fuel costs, margin improved only 10 basis points. Sales rose modestly, while SG&A grew just $16 million and declined as a percentage of revenue. (Financial Highlights) 〔0〕

Management raised every major full-year target. The FY2026 sales midpoint increased to $21.75 billion from $21.625 billion, comparable-sales midpoint to 1.25% from 0.85%, adjusted EBITDA margin midpoint to 7.9% from 7.8%, and adjusted EPS midpoint to $2.25 from $2.10. (Guidance table) The company raised its annual fiscal year 2026 guidance, including net sales, comparable sales, adjusted EBITDA and adjusted diluted EPS guidance. 〔1〕

The net read is a genuine beat, but not a clean structural earnings reset. Tariff refunds supplied much of the quarter’s earnings lift, with only about $20 million of the $116 million total refund expected to flow into full-year EPS; most of the remainder is being reinvested. Still, the underlying EPS result cleared consensus and the guidance increase points to better-than-expected execution across sales, margins and cash generation. (Tariff refund disclosure)