Retail · Deep dive

Macy's, Inc.

The 168-year-old department store trying to shrink its way to relevance — a $21.8B, three-banner retailer whose real estate may be worth more than its $6B market cap, now four activist campaigns deep, one year past a rejected $6.9B take-private bid and a $151M accounting scandal, and finally printing its best comps in four years under Bloomingdale's-lifer CEO Tony Spring.

at risk

Four quarters of positive comps and real Bloomingdale's momentum do not change the arithmetic of a retailer whose earnings lean on credit-card income and asset-sale gains, whose market cap sits below its own claimed real-estate value, and whose core format has lost 44% of its retail value since 2010.

Snapshot

Macy’s, Inc. is America’s largest surviving traditional department store company — $21.8B of net sales in fiscal 2025 (year ended January 31, 2026) across roughly 650 stores under three banners: the namesake Macy’s, luxury Bloomingdale’s, and beauty chain Bluemercury — and the market’s favorite case study in managed decline versus hidden value. It matters now for three colliding reasons. First, the turnaround is finally printing numbers: fiscal 2025 delivered the first positive annual comp since 2021 (+1.5%), and the quarter reported June 3, 2026 posted +3.0% comps, the best first quarter in four years. Second, the vultures keep circling: an activist campaign by Barington Capital and Thor Equities, running since December 2024, claims the real estate alone is worth $5-9B against a market cap of about $6.15B (July 2026) — the fourth activist attack in a decade and the second act after a rejected $6.9B take-private bid. Third, the format itself is dying underneath the company: US department store value has fallen roughly 44% since 2010, and store counts have nearly halved since 2015.

Founding story

Rowland Hussey Macy was a Nantucket Quaker who went whaling as a teenager, came home with a red star tattooed on his hand, and failed at four stores before the fifth one worked: a dry-goods shop opened on Sixth Avenue in Manhattan in 1858, whose first day reportedly took in $11.06. His methods — fixed prices, money-back guarantees, saturation advertising, that red star as the logo — scaled into the Herald Square flagship of 1902, “the world’s largest store.” The modern company is really a creature of consolidation: Federated Department Stores (founded 1929) bought R.H. Macy & Co. out of bankruptcy in 1994, swallowed May Department Stores for about $11B in 2005 — converting regional icons like Marshall Field’s and Filene’s into Macy’s nameplates — and renamed itself Macy’s, Inc. in 2007, near the format’s peak.

The leadership story mirrors the strategy shift. Jeff Gennette, a 40-year lifer who started as an executive trainee in 1983, ran the company from 2017 through the pandemic and the Polaris restructuring. His successor, Tony Spring, is the first Macy’s, Inc. CEO drawn from Bloomingdale’s rather than the namesake: a Cornell grad who joined Bloomingdale’s in 1987 as a merchandise trainee in White Plains, spent 36 years climbing through home furnishings and merchandising under mentor Mike Gould, and ran Bloomingdale’s as CEO from 2014 to 2023. Named successor in September 2023 and CEO in February 2024 (CNBC), Spring announced Bold New Chapter three weeks into the job. The plan is his biography as strategy: shrink the struggling middle-market banner, grow the luxury and beauty ones he knows.

How it works

Mechanically, Macy’s is a mall-anchor machine being converted, store by store, into a smaller and more curated one. The Bold New Chapter fleet math: close about 150 underperforming Macy’s stores through 2026 (66 closed by late 2025; only 14 slated for 2026, a sign the heavy cutting is done — Forbes, January 2026), concentrate on roughly 350 “go-forward” locations, and prove out a high-touch model in a pilot subset — the “First 50” stores, expanded to “Reimagine 125,” now about 200 locations carrying roughly 60% of the go-forward Macy’s store base. The Reimagine treatment is unglamorous and physical: more staffed fitting rooms and shoe runners, dedicated visual merchandising, better lighting and fixtures, faster online-order pickup. It works, modestly — Reimagine locations comped +2.4% in the quarter ended May 2026 versus +1.6% for the nameplate overall. Alongside, Macy’s operates small-format off-mall stores (Market by Macy’s and Bloomie’s, roughly 30,000-50,000 square feet against a 180,000-square-foot anchor), which carry lower operating costs and higher customer-satisfaction scores. Digital — roughly a third of revenue — runs through macys.com, a third-party marketplace, and the Macy’s Media Network, the in-house retail-media arm selling ads across Macy’s and Bloomingdale’s properties. Two non-merchandise engines matter disproportionately: the Citibank-issued proprietary credit card, which contributed $669M of income in 2025, and real-estate monetization — selling closed stores and excess land — which produced $107M of proceeds in fiscal 2025, down from $283M the prior year (TipRanks earnings coverage, March 2026).

Product and business overview

Three banners, three trajectories. Macy’s (about 430 stores including small formats) is the middle-market core — apparel, beauty, home, accessories — and the shrinking part; the nameplate comped +1.6% in the quarter reported June 2026, its fourth consecutive positive quarter, after years of decline. Bloomingdale’s (roughly 57 full-line stores plus outlets and Bloomie’s small formats) is the growth story: comps +9.9% in fiscal 2025 and +10.2% in the quarter reported June 2026 — the highest first-quarter volume in the brand’s history — riding the same accessible-luxury demand that Saks Global’s chaos has left underserved. Bluemercury (172 stores) is the small but steady beauty chain, comping positive for years running (+6.4% in Q1 FY2026), now under new leader Alexandre Choueiri. Around the banners sit the marketplace (third-party sellers expanding assortment without inventory risk), Macy’s Media Network ($188M of net revenue in the year ended January 31, 2026, up from $176M the year before), and the credit-card program with Citibank. Barington and Thor’s point is that this portfolio construction is precisely the problem: Bloomingdale’s and Bluemercury would fetch higher multiples separated, and the real estate — Herald Square above all — is worth $5-9B on its own (CNBC, December 2024).

Business model and pricing

Revenue is overwhelmingly owned merchandise sell-through at promotional mid-market prices, supplemented by licensed departments and marketplace commissions. The uncomfortable structure is in the profit mix: in fiscal 2025 the company produced GAAP diluted EPS of $2.32 on $21.8B of sales, but a material share of profitability has long come from non-retail streams — credit-card income ($669M in 2025; Citi analyst Paul Lejuez estimated credit at roughly 50% of operating profit in 2023, up from 35% in 2021) and gains on asset sales, which are lumpy and finite (Q4 FY2025 asset-sale gains were just $3M versus $41M a year earlier). When card delinquencies spiked in 2023, credit revenue fell 36-41% in successive quarters and took guidance down with it — a reminder that Macy’s is partly a subprime-adjacent lender wearing a retailer’s coat. Pricing is classic high-low promotion at Macy’s (perpetual coupon culture), full-price-plus-markdown at Bloomingdale’s, and prestige-brand pricing at Bluemercury. Tariffs are a live 2026 headwind: management guided to a 3-4 cent EPS hit and 20-40 basis points of gross-margin pressure in the second quarter alone (Zacks/Yahoo Finance, June 2026).

Traction over time

Sources: company releases 2020-2026; fiscal 2024 and 2025 results March 2025 and March 18, 2026; Q1 FY2026 June 3, 2026. The shape is deliberate shrinkage: roughly $3B of revenue surrendered since fiscal 2021, mostly closed stores, in exchange for a smaller base that finally comps positive. Bloomingdale’s (+10.2%) and Bluemercury (+6.4%) are pulling the average up; the FY2026 guide of $21.5-21.75B in net sales and +0.5% to +1.2% comps (raised in June 2026) still implies a company whose top line is, at best, flat.

Market analysis

The US department store industry generates roughly $70B in annual revenue across about 4,500-4,700 stores, down from 7,885 stores in 2015, and IBISWorld projects continued decline over the next five years (IBISWorld, 2026). The format’s retail value has fallen roughly 44% since 2010. The structural forces are unforgiving: off-price and Amazon captured the value and convenience ends of the market; brands went direct-to-consumer, hollowing out the department store’s role as gatekeeper; and the mall itself is contracting — about 1,200 US malls operating as of April 2025, with forecasts of roughly 900 by 2028. Macy’s is the largest player in a segment where being the largest is a diminishing prize. The genuine growth pockets are exactly where Spring is steering: accessible luxury (Bloomingdale’s, benefiting from Saks Global’s post-merger dysfunction), prestige beauty (Bluemercury, in a category that has grown through every downturn), retail media, and off-mall small formats. The bear point is proportion: those pockets together are a fraction of a company that remains roughly 85% mall-economy Macy’s.

Competitive intel

Dillard’s (~273 stores) is the sharpest rebuke: it stopped growing fifteen years ago, hoarded cash, bought back stock, and delivers margins Macy’s has never approached — the run-it-for-cash model Barington implicitly wants. Nordstrom took the exit Macy’s board refused, going private with the family and El Puerto de Liverpool for about $6.25B in May 2025 and restructuring away from quarterly scrutiny; it squeezes Bloomingdale’s from above and Macy’s via Rack from below. TJX and the off-price complex (Ross, Burlington) sell overlapping brands 20-60% cheaper, have taken share for fifteen straight years, and TJX alone carries a market cap around twenty times Macy’s. Amazon owns the replenishment basics that used to anchor trips. Kohl’s, JCPenney, and Belk fight for the same mid-market customer in a shrinking pool. In beauty, Sephora and Ulta dwarf Bluemercury; in luxury, Saks Global (Saks + Neiman Marcus) is Bloomingdale’s main full-line rival — currently a wounded one, which is Bloomingdale’s near-term gift. Macy’s advantages are real but narrow: unmatched national brand relationships at its price tier, Herald Square and the Thanksgiving parade as cultural assets, and the only three-banner spread from mid-market to luxury to prestige beauty in American retail.

History and evolution

• 1858 — R.H. Macy opens in Manhattan; first-day sales reportedly $11.06.
• 1902 — Herald Square flagship opens. 1924 — First Macy’s Thanksgiving Day Parade.
• 1929 — Federated Department Stores formed. 1992 — R.H. Macy & Co. files Chapter 11. 1994 — Federated acquires Macy’s.
• 2005 — Federated buys May Department Stores (~$11B); regional nameplates converted. 2007 — Renamed Macy’s, Inc.
• January 2016 — Starboard Value pushes a real-estate spin-off, claiming $21B of value; management refuses; Starboard exits by 2017.
• February 2020 — Polaris plan: 125 store closures announced; weeks later the pandemic closes everything and sales fall by a third.
• October 2021 — Jana Partners urges an e-commerce spin-off; the idea dies quietly and Jana exits.
• December 2023 — Arkhouse Management and Brigade Capital bid $21/share. January 22, 2024 — Board rejects $5.8B offer over financing doubts. February 27, 2024 — Spring announces Bold New Chapter: 150 closures through 2026, First 50 investment stores. July 15, 2024 — Board unanimously terminates talks at $24.80/share ($6.9B), citing financing uncertainty.
• November 25, 2024 — Macy’s delays Q3 results after discovering a single employee intentionally hid $151M of small-parcel delivery expenses from late 2021 through November 2024 — begun to mask an initial error, sustained by falsified documentation (CNBC, FreightWaves, December 2024).
• December 9, 2024 — Barington Capital and Thor Equities go public: real-estate subsidiary ($5-9B claimed), review of Bloomingdale’s/Bluemercury, capex cuts, $2-3B of buybacks, board seats.
• March 18, 2026 — Fiscal 2025 results: first positive annual comp (+1.5%) since 2021.
• June 3, 2026 — Q1 FY2026: comps +3.0%, best in four years; Bloomingdale’s +10.2%; guidance raised. Stock up ~77% over the year to a ~$6.15B market cap by late July 2026.

What people say

The case for. Post-Q1 2026 sell-side commentary credits Spring with the first evidence of genuine demand recovery: four straight positive quarters at the Macy’s nameplate, a 3% consolidated comp against guidance of 0.5-1.5%, Bloomingdale’s record volume, and raised full-year guidance (Motley Fool transcript, Zacks, June 2026). Bulls note the stock’s 77% one-year run still leaves the company valued near — or below — activists’ estimate of its real estate alone, a sum-of-the-parts case where the retail operations come almost free. Value investors point to consistent earnings beats, a repaired balance sheet, and management’s demonstrated willingness to close stores rather than defend them. Fortune’s November 2025 department-store coverage grouped Macy’s with Dillard’s and Nordstrom as chains “getting their groove back” via disciplined assortments.

The complaints. The bear file is structural. Analysts have repeatedly flagged that profits lean on credit-card income (~50% of operating profit at the 2023 peak of the imbalance, per Citi’s Lejuez) and on asset-sale gains that are shrinking and unrepeatable — Q4 FY2025 gains came in at $3M versus $15-20M expected, and monetization proceeds fell to $107M from $283M (TipRanks, March 2026). Skeptics call Bold New Chapter incremental rather than transformational — mitigation of decline, not reinvention (RetailWire, 2026). Customer complaints cluster on exactly what the Reimagine program concedes: understaffed floors, messy racks, and worn stores in the non-invested majority of the fleet. Employee sentiment agrees — Macy’s carries a 3.4 Glassdoor rating across 31,000+ reviews, with recurring themes of chronic understaffing (“the store is dirty and they are so short staffed that you cannot take care of the customer”), low pay, and being pulled across roles. Governance skeptics add the $151M accounting scandal — one employee falsifying delivery-expense entries for three years without detection — and a board that rejected $24.80 in cash for a stock that spent most of the next year below $15.

Outlook: well positioned or at risk?

At-risk. The turnaround is real and still insufficient. Give Spring full credit: he chose the honest strategy — shrink the dying part, feed the growing parts — and after two years it is measurably working, with the best comps since 2021 and Bloomingdale’s compounding at double digits. But zoom out and the company is winning share of a pool that is evaporating: department store value down 44% since 2010, store counts nearly halved since 2015, a quarter of remaining malls forecast to close by 2028. Macy’s own raised FY2026 guidance still implies a flat top line, meaning every point of Bloomingdale’s growth is consumed by the melting core. Meanwhile the earnings quality problem persists — credit-card income and dwindling asset-sale gains doing work merchandise margins cannot — and tariffs are actively taxing the recovery.

The well-positioned case rests on the sum of the parts: real estate worth $5-9B by activist math, Bloomingdale’s and Bluemercury worth more separated, a market cap that until recently priced the whole company below its property. But that argument is an indictment dressed as a compliment — it says the assets are worth more away from the operating business, which is why four activist campaigns in ten years (Starboard, Jana, Arkhouse/Brigade, Barington/Thor) have all converged on the same thesis and management has refused it every time, including at $24.80 a share. A company whose most credible bull case is its own dismemberment, defending a format in secular decline with a plan that trades revenue for comp quality, is not a compounding position. Macy’s will likely keep beating lowered bars, and the stock may keep working from a depressed base; the enterprise itself remains ripe for dislocation — by activists, by acquirers, or simply by the slow arithmetic of the mall.

Sources and further reading

• Macy’s, Inc. and Macy’s Return to Annual Comparable Sales Growth; Fourth Quarter and Fiscal Year 2025 Results Exceed Guidance — Macy’s, Inc., March 18, 2026. FY2025 net sales $21.8B, comps +1.5%, EPS $2.32, FY2026 guidance.
• Macy’s (M) Q1 2026 Earnings Call Transcript — The Motley Fool, June 4, 2026. Q1 comps +3.0%, Bloomingdale’s +10.2%, Bluemercury +6.4%, Reimagine 200 detail, raised guidance.
• Activist Barington takes aim at Macy’s, seeks spending, real estate fixes — CNBC, December 9, 2024. Barington/Thor demands: $5-9B real-estate subsidiary, Bloomingdale’s/Bluemercury review, $2-3B buybacks.
• Macy’s ends buyout talks with Arkhouse and Brigade after months of negotiations — CNBC, July 15, 2024. Termination of the $24.80/share (~$6.9B) take-private process.
• Macy’s employee who hid $151 million in delivery expenses was trying to mask initial mistake, sources say — CNBC, December 11, 2024. The delivery-expense accounting scandal and investigation findings.
• New Macy’s CEO Tony Spring looks to revive a 166-year-old retailer fighting for relevance — CNBC, February 4, 2024. Spring’s Bloomingdale’s background and the Gennette handoff.
• Macy’s Bold New Chapter Includes Closing 150 Stores — Forbes, February 27, 2024. Plan announcement: 150 closures, 350 go-forward stores, First 50.
• Macy’s To Close Only 14 Stores As Its ‘Bold New Chapter’ Plan Bears Fruit — Forbes, January 9, 2026. Closure progress (66 by late 2025) and Reimagine comp outperformance.
• Macy’s big warning on credit cards a big problem for some other retailers — Yahoo Finance, August 2023. Credit income collapse and Lejuez’s ~50%-of-operating-profit estimate.
• Macy’s Earnings Call: Growth Momentum Amid Margin Strain — TipRanks, March 2026. Asset-sale gains shortfall ($3M vs $15-20M expected; proceeds $107M vs $283M).
• Department stores’ new playbook: How Macy’s, Dillard’s, and Nordstrom are getting their groove back — Fortune, November 7, 2025. Sector comparison, Dillard’s discipline, Nordstrom’s take-private.
• Department Stores in the US Industry Analysis — IBISWorld, 2026. ~$70B industry revenue, declining store counts, five-year decline forecast.