Macy's, Inc. 10-Q Filing Summary
Business Context and Reporting Period
This filing covers the quarterly period ended August 1, 2026 (Second Quarter of Fiscal 2026) and the 26-week period ended August 1, 2026. Macy's, Inc. operates as an omni-channel retailer under the Macy's, Bloomingdale's, and Bluemercury nameplates. The company reported strong performance across all nameplates, driven by its "Bold New Chapter" strategy, including the "Reimagine 200" store initiative and digital expansion.
Key Financial Metrics
| Metric (in millions) | Q2 2026 (13 Weeks) | Q2 2025 (13 Weeks) | YTD 2026 (26 Weeks) | YTD 2025 (26 Weeks) |
|---|---|---|---|---|
| Total Revenue | $5,059 | $4,999 | $9,951 | $9,791 |
| Net Sales | $4,866 | $4,812 | $9,548 | $9,411 |
| Gross Margin | $2,018 (41.5%) | $1,912 (39.7%) | $3,840 (40.2%) | $3,716 (39.5%) |
| Operating Income | $244 | $149 | $356 | $242 |
| Net Income | $169 | $87 | $232 | $124 |
| Diluted EPS | $0.62 | $0.31 | $0.85 | $0.44 |
| Operating Cash Flow (YTD) | $586 (vs. $255 YTD 2025) | |||
| Cash & Equivalents | $1,294 (as of Aug 1, 2026) | |||
| Long-Term Debt | $2,433 (as of Aug 1, 2026) |
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased 1.1% in Q2 and 1.5% YTD compared to the prior year. Comparable sales grew 2.7% in Q2 and 2.8% YTD.
- Margin Expansion: Gross margin rate improved by 180 basis points in Q2 and 70 basis points YTD. This was primarily driven by approximately $95 million in gross tariff refunds received in Q2.
- Profitability: Operating income surged 64% in Q2 ($244M vs. $149M) and 47% YTD ($356M vs. $242M). Net income doubled in Q2 ($169M vs. $87M) and nearly doubled YTD ($232M vs. $124M).
- Cash Flow: Operating cash flow for the first half of 2026 was $586 million, a significant increase from $255 million in the prior year, largely due to $328 million received from credit card interchange fee litigation settlements.
- Debt Reduction: The company had no outstanding borrowings under its Amended & Extended ABL Credit Facility ($2.1 billion capacity) as of August 1, 2026.
Guidance, Outlook, and Management Commentary
- Strategic Pillars: Management highlighted progress in "Reimagining" 200 Macy's locations (representing ~75% of go-forward sales), which saw positive comparable sales for the fifth consecutive quarter. Bloomingdale's achieved record Q2 sales, and Bluemercury continued growth in beauty categories.
- Tariff Refunds: The company received $98 million in tariff refunds in Q2, with an additional $18 million received post-quarter, totaling $116 million. These funds are being deployed in a balanced manner.
- Capital Allocation: The company repurchased approximately 2.2 million shares in Q2 and 4.9 million shares YTD. As of August 1, 2026, $1.024 billion remained available under the share repurchase program. A quarterly dividend of $0.1915 per share was declared.
- Technology & AI: Continued investment in AI-powered shopping assistants ("Ask Macy's") and supply chain automation, which improved order processing speed by 7.0% and reduced shipment lead times by 6.7%.
- Risks: Key risks include consumer spending levels, competitive pressures, supply chain disruptions, and the successful execution of the "Bold New Chapter" strategy.
Investor Verification Checklist
- Tariff Refund Sustainability: Verify the one-time nature of the $95 million gross margin benefit from tariff refunds and its impact on future margin guidance.
- Comparable Sales Quality: Assess the durability of the 2.7% Q2 comparable sales growth, particularly in the "Reimagine 200" locations versus the broader fleet.
- Capital Expenditures: Review the $324 million YTD capital expenditures, specifically the allocation toward digital and technology investments versus store maintenance.
- Debt Structure: Confirm the status of the $2.433 billion long-term debt and the terms of the $2.1 billion ABL facility, noting the reduction from the previous $3.0 billion facility.
- Non-GAAP Reconciliations: Review the reconciliation of Adjusted EBITDA ($457M Q2) to GAAP Net Income to understand the impact of excluded items like real estate gains and restructuring costs.