Macy’s Beats Expectations Again, But Guidance Spooks Investors

Key Points

• Macy’s stock surged more than 140% from its April 2025 low to a December high above $24 as investors gained confidence in the company’s “Bold New Chapter” turnaround strategy, but shares have since pulled back sharply in 2026.
• The company delivered another strong fourth-quarter report, beating earnings and revenue expectations for the fourth consecutive quarter, a sign that the turnaround strategy is gaining traction.
• Despite the solid results, Macy’s conservative full-year guidance and uncertainty around discretionary spending prompted several analysts to lower price targets, leaving the stock with a Reduce consensus rating.

Macy’s Inc. NYSE: M stock was a must-have item for investors in 2025. Wall Street applauded the retailer’s progress on its turnaround strategy and a string of better-than-expected earnings reports. Recently, however, the stock seems to have gone out of style.

Shares pulled back sharply in 2026 as momentum slowed amid an uncertain macroeconomic and geopolitical backdrop, which has clouded the outlook for consumer spending. Although Macy’s recently delivered another better-than-expected quarter, analysts are taking a more cautious stance on the stock after the company issued conservative guidance.

Strong 2025 Rally Fades as Consumer Spending Concerns Weigh on Macy’s Stock

Macy’s shares fell below $10 in April 2025, marking a 52-week low, as the traditional department store model continued to face pressure. The stock began to gain traction later in 2025, however, as investors grew more confident that the company’s “Bold New Chapter” strategy, announced in 2024, was starting to deliver results.

The aim of the initiative is to reposition the company by closing underperforming locations, expanding its presence in the luxury segment, and improving operating efficiency.

Growing confidence that the strategy was paying off helped the stock surge 140% from the April low, with shares hitting a 52-week high above $24 in December. But momentum has since faded as concerns about consumer spending have taken center stage. 

By the end of 2025, the stock had fallen to around $22, and during the first two months of 2026, it traded between $20 and $22.

The stock began trending lower toward the end of February, and by the time Macy’s reported its fourth-quarter 2025 earnings on March 18, it had dropped below $17.

Following the earnings release, shares got a modest bump, rising more than 6% over the next two sessions. But the rebound wasn’t enough to reverse the downtrend. The stock, currently trading around $18, is down about 15% over the last month. The decline is in line with the broader retail industry, which is down more than 16% over the same period.

Earnings Beat Again, But Cautious Outlook Tempers Enthusiasm

Macy’s fourth-quarter report delivered another strong sign that the company’s turnaround strategy is paying off, as earnings and revenue both came in ahead of Wall Street expectations. Adjusted earnings per share of $1.67 topped consensus estimates of $1.55, while revenue of $7.92 billion also beat forecasts of $7.48 billion. The quarter marked Macy’s fourth consecutive earnings beat.

Strength at Bloomingdale’s and improving results at its “go-forward” locations, the specific stores slated for upgrades and modernization, were especially encouraging. And the company’s client base, which skews to mid- and upper-income shoppers, also helped support performance, as those customers have been less affected by the pressures weighing on lower-income consumers.

Though investors cheered the report, Macy’s conservative guidance spooked analysts. On the earnings call, Chief Executive Tony Spring reiterated confidence in the retailer’s long-term strategy but said the company is “taking a prudent approach to guidance,” given the macroeconomic and geopolitical factors that could influence discretionary spending.

Macy’s said it expects full-year net sales of $21.4 billion to $21.65 billion, with comps ranging from down 0.5% to up 0.5%. Earnings per share are expected to be between $1.90 and $2.10. The company said the guidance provides it with the flexibility to respond to changes in the competitive landscape and the macro environment.

Analysts Lower Price Targets As Most See Limited Upside

Following the earnings release, several analysts lowered their price targets on Macy’s stock, suggesting that even though the turnaround story remains intact, near-term upside may be limited.

The current consensus rating on the stock is Reduce, based on 14 analyst ratings. Of those, 10 rate the stock a Hold, three rate it a Sell, and only one analyst has a Buy rating.

That is slightly more bearish than the broader retail sector, which carries a consensus rating of Hold.

The average 12-month price target for Macy’s is just $18.90 per share, implying less than 5% upside from current levels, meaning the stock may remain largely range-bound unless there is a meaningful improvement in discretionary spending. 

For now, Macy’s appears to be walking the line between improving execution and navigating a challenging macro backdrop.

While the company continues to deliver better-than-expected results, the cautious guidance and a muted analyst outlook suggest investors may need a clearer catalyst before the stock comes back into fashion.