Macy’s profit rises as Bloomingdale’s growth offsets tariff pressure

Macy’s (NYSE:M) reported an increase in first-quarter profitability and sales, lifted by strong luxury performance at Bloomingdale’s and positive momentum across its core turnaround properties.

The results suggest the retailer's strategic "go-forward" initiatives are finding traction even as global trade policies introduce mild margin pressures.

Net sales for the quarter increased 1.8% to $4.7 billion, a figure that includes the impact of planned store closures.

Total company comparable sales climbed 3%, with positive performances recorded across all of the company's operating banners.

The retailer's prioritized "go-forward" business operations performed slightly better, tracking a 3.1% comparable sales expansion.

Luxury and beauty categories led the top-line growth.

Bloomingdale’s posted a standout 10.2% jump in comparable sales, signaling highly resilient spending among higher-income demographics.

Upscale beauty boutique Bluemercury followed with a healthy 6.4% comparable sales increase.

The namesake Macy’s banner grew at a more modest 1.6% pace, though its specialized "Reimagine 200" store locations outperformed the baseline with a 2.4% gain, validating investments in physical store updates.

The corporate gross margin rate contracted slightly to 38.9%, dropping 30 basis points due entirely to an adverse tariff impact.

Excluding this regulatory drag, the gross margin rate matched the prior year's performance.

Selling, general, and administrative (SG&A) expenses rose by $39 million to $2 billion, reflecting ongoing outlays for digital infrastructure, luxury brand expansion, and the Reimagine store rollouts.

Continued cost-management protocols kept SG&A expenses flat as a percentage of total revenue at 39.9%.

The combination of higher revenue and disciplined overhead pushed GAAP net income to $63 million, or $0.23 per diluted share, up significantly from $38 million ($0.13 per share) in the first quarter of 2025.

Adjusted net income rose to $35 million, or $0.13 per share, compared to $31 million ($0.11 per share) in the prior-year period.

Adjusted EBITDA arrived at $290 million, representing 5.9% of total revenue, compared with $304 million a year ago.

Ancillary business lines offered further financial cushion.

Other revenue climbed 8.2% to $210 million, driven primarily by an 11.7% surge in proprietary credit card net revenues to $172 million.

Management attributed the credit increase to a fundamentally healthy consumer credit portfolio.

Macy’s concluded the quarter with a well-capitalized balance sheet.

Merchandise inventories increased 3.6% year-over-year, which the company believes leaves its channels cleanly positioned for summer seasonal demand.

The retailer ended the period with $1.3 billion in cash and cash equivalents alongside $2 billion in available credit facility capacity.

Total corporate debt stands at $2.4 billion, with Macy's facing no material long-term debt maturities until fiscal year 2030.