Believe: Macy’s Posts Best Growth In Three Years as ‘Reimagine’ Strategy Pays Off

Some might call it a pre-Christmas miracle on 34th Street, but Macy’s executives would argue it’s simply the payoff of a solid strategy.

In its third-quarter earnings call on Wednesday, the once-mighty retail giant reported its strongest growth in more than three years and its third straight quarterly sales beat. For now, at least, it looks like the company’s turnaround effort is taking hold as well as paying off.

Macy’s Makeover

After shrugging off buyout firms multiple times in the past couple of years, Macy’s has marched toward a simple, and seemingly effective, turnaround strategy: Get smaller, but better. In early 2024, the company said it would close around 150 low-performing locations by 2027; so far this year, it has closed nearly 70. The remaining locations, in turn, will receive a makeover worthy of a Roy Orbison-soundtracked montage. 

Macy’s originally dubbed the re-investment effort the “First 50,” as it spruced up 50 strategic locations. Now? The company says a full 125 stores have regained their sparkle in its ‘Reimagine’ campaign, good for roughly one-third of the 350 locations it says it wants to remain open worldwide.

So far, customers seem to appreciate the refreshed shopping experience, though the retailer’s bottom line is still rebalancing from the wave of store closures:

• In the third quarter, companywide comparable sales growth jumped 3.2%, or 3.4% when excluding locations that aren’t a part of long-term plans. Its Bloomingdale’s unit continued its trend of outperforming the namesake stores, posting 9% year-over-year sales growth.
• The better-than-expected quarter allowed Macy’s to raise its guidance for the year, with the company now projecting net sales of $21.48 billion to $21.63 billion, up from a range of $21.15 billion to $21.45 billion. Still, that comes in slightly below last year’s figures; the company is projecting a $700 million net sales decline compared with 2024 due to store closures.

Rain On Your Macy’s Thanksgiving Day Parade: Despite the outlook upgrade, Macy’s cautioned it expects “a more choiceful consumer” in the fourth quarter amid tariff-induced price hikes and rising economic anxiety. Still, the company highlighted how its “predominantly middle to upper income” consumer base has remained resilient thus far this year. Translation: It’s not quite a forecast of rain on the company’s annual New York City holiday parade, but perhaps a light drizzle.