Macy’s Inc. (NYSE:M) shares are trading higher after the company reported better-than-expected fourth quarter financial results and issued guidance.

Bloomingdale’s Exceptional Performance

The department store reported fourth-quarter adjusted earnings of $1.67, beating the consensus of $1.53.

Sales decreased 1.7%2 to $7.6 billion, beating the consensus of $7.615 billion.

Comparable sales up 1.8%, reflecting positive comparable sales at each of the company’s nameplates, exceeding the company’s guidance.

Margins Impacted By Tariffs, In Line With Expectations

Gross margin of 35.2% decreased 50 basis points. The decline was primarily attributable to an approximately 60 basis point tariff impact, which was in line with the company’s expectations.

The company said Bloomingdale’s achieved its best holiday performance on record in the fourth quarter, as comparable sales rose 9.9%.

“Bloomingdale’s exceptional performance underscores its ability to elevate the customer experience and capture demand across premium contemporary to luxury businesses,” said Tony Spring, chairman and CEO of Macy’s.

Cautious Outlook Amid Macro And Geopolitical Uncertainty

The company flagged macroeconomic and geopolitical risks that could weigh on discretionary spending and is maintaining a cautious, flexible outlook.

Guidance assumes tariffs will have a heavier impact in the first half of the year—peaking in the first quarter—before easing in the second half.

It also incorporates planned investments in Reimagine 200 locations and luxury brands to drive long-term revenue growth, along with a lower level of store closures in fiscal 2025 versus 2024.

“Looking to 2026 and beyond, we are ready to build on our progress,” Spring commented.

Macy’s expects fiscal 2026 adjusted earnings of $1.90-$2.10 per share, compared to the consensus of $2.17.

The store operator forecasts 2026 annual sales of $21.4 billion-$21.65 billion compared to the consensus of $21.42 billion.

Macy’s estimates first quarter earnings to range between a loss of 1 cent and earnings of 1 cent per share, compared to the consensus of 18 cents.

It expects sales of $4.575 billion-$4.625 billion compared to the consensus of $4.59 billion.

M Stock Price Activity: Macy’s shares were up 5.02% at $17.77 at the time of publication on Wednesday, according to Benzinga Pro data.

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