Macy's, Inc. (NYSE:M) raised its full-year profit outlook after quarterly sales topped analyst estimates, helped by a boost from tariff refunds, even as shares of the department store operator fell 3% on weaker-than-expected guidance.
The company reported second-quarter revenue of $4.9 billion, above the $4.83 billion analysts had expected and up 1.1% from a year earlier.
Adjusted earnings came in at $0.63 per share, including $0.23 from tariff refunds. Excluding the refunds, adjusted earnings per share were $0.40, ahead of the $0.37 estimate and up 14% from a year earlier. GAAP earnings per share doubled to $0.62, also boosted by the refunds.
Adjusted EBITDA, which included the tariff refund benefit, totaled $457 million.
Macy's received $98 million in tariff refunds tied to the International Emergency Economic Powers Act during the quarter, along with $18 million after quarter end, for a total of $116 million.
The net benefit came to $84 million pre-tax, adding $0.23 per share after tax and 180 basis points to gross margin. Gross margin for the quarter was 41.5%, including the refund impact; excluding it, gross margin rose 10 basis points.
Comparable sales rose 2.7% for the quarter. Sales at the company's go-forward business increased 2.8%, while Macy's namesake banner posted a 1.1% comparable sales gain. Bloomingdale's comparable sales jumped 11.3%, and Bluemercury climbed 6.2%.
For fiscal 2026, Macy's now expects revenue of $21.7 billion to $21.8 billion, up from its prior range of $21.5 billion to $21.75 billion but below the $21.91 billion analysts had forecast. The company raised its adjusted EPS guidance to a range of $2.15 to $2.35, from $2 to $2.20, versus a $2.25 estimate. Adjusted EBITDA margin guidance was lifted to 7.8% to 8% from 7.7% to 7.9%, though that range sits below the 8.1% analysts had projected.
Macy's also raised its comparable sales guidance for the year to a range of 1% to 1.5%, up from 0.5% to 1.2%.
Despite the higher guidance, several of the updated targets, including revenue and adjusted EBITDA margin, still fell short of Wall Street's estimates for the year.
The company said its updated guidance reflects plans to reinvest the majority of the tariff refunds, with about $0.05 per share expected to flow through to adjusted earnings per share for the year.
