Turnaround Strategy Gains Momentum
Macy’s, Inc. reported its best comparable-store sales growth in 12 quarters, driven by strong performance at Bloomingdale’s and its newly remodeled Macy’s locations. The results mark early success for its “A Bold New Chapter” turnaround plan, even as the retailer continues to close underperforming stores. In 2025 alone, Macy’s has shuttered 66 namesake locations as part of its strategy to focus investment on 350 “go-forward” stores that are expected to carry the brand forward.
Tariffs and Consumer Spending Pressures
Despite the sales momentum, Macy’s executives signaled caution for the second half of the year. On its earnings call, leadership acknowledged that U.S. shoppers are becoming “more choiceful” with their spending, reflecting growing pressure on discretionary purchases. Tariffs are also weighing on operations. While the heaviest impact hit in the second quarter, Macy’s warned that the bulk of incremental tariff costs will show up in the fourth quarter, complicating its holiday sales outlook.
The latest PwC 2025 Holiday Outlook added to the concerns, forecasting that U.S. consumers plan to spend 5% less this holiday season than last year — the first decline since 2020. Rising costs and tariff uncertainty are cited as the key drivers behind the pullback, suggesting retailers face a tougher environment despite recent performance improvements.
Company Response and Pricing Strategy
Macy’s CEO Tony Spring said the company is taking a “surgical approach” to tariffs, applying targeted price increases and negotiating with suppliers to offset costs. “We’ve tried to be really thoughtful about what categories can bear the cost,” Spring noted, emphasizing that the company aims to protect customer loyalty while balancing profitability. The strategy reflects the broader retail challenge of managing inflationary and trade-related pressures without alienating value-conscious consumers.
Investor Reaction
The market responded positively to Macy’s update. Shares jumped nearly 13% in premarket trading following the announcement, as investors welcomed signs of sales recovery and confidence in the turnaround plan. However, analysts warn that ongoing tariff impacts and weaker holiday demand could test Macy’s ability to sustain momentum in the quarters ahead. With more store closures planned through 2026, the company’s success will hinge on whether its remodeled stores and luxury banners can offset broader headwinds in retail.