Macy’s (M) Raises Guidance After Strong Q2 Results, But Investors Remain Cautious

Macy's, Inc. (NYSE:M) continued to make progress with its turnaround strategy in the second quarter of 2026, which allowed the company to also raise its guidance. On September 10, the company reported its Q2 results, with comparable sales and adjusted earnings both coming in ahead of Wall Street expectations.

In Q2 2026, Macy's, Inc.'s (NYSE:M) comparable sales increased 2.7%, marking the fifth consecutive quarter of growth. This increase was much higher than Wall Street's expectation of 0.8% growth, as per S&P Global Market Intelligence data.

The company also exceeded estimates on both the top and bottom lines. Adjusted earnings came in at $0.63 per share, compared with the Street's estimate of $0.37 per share. However, the earnings beat was partly driven by a $0.23 per share benefit from tariff refunds, net of reinvestment. Net sales reached $4.9 billion, ahead of analysts' expectations of $4.8 billion.

Macy's, Inc. (NYSE:M) is now in the third year of its "Bold New Chapter" transformation strategy, which focuses on closing 150 underperforming stores and reinvesting in the remaining 350 locations. The company is also working to reduce redundant merchandise and bring in more fashionable brands, including Theory and Free People, in an effort to better appeal to middle- and upper-income consumers.

The strategy appears to be working as the company raised its full-year 2026 net sales guidance to between $21.67 billion and $21.82 billion, up from its previous forecast of $21.5 billion to $21.75 billion.

The improved outlook comes as consumers remain cautious. High gas prices and broader economic uncertainty continue to weigh on sentiment. Retailers have increasingly pointed to an environment in which consumers are becoming more selective about where they spend.

Despite the impressive results, investors appear to have focused on the quality of Macy's, Inc.'s (NYSE:M) earnings growth. A meaningful part of the adjusted EPS beat came from the $0.23 per share benefit from tariff refunds, rather than the company's core retail operations.

The modest increase in full-year guidance has also failed to help the stock gain momentum.