Macy’s beat-and-raise failed to lift stock

Macy’s reported second-quarter earnings of $0.40 per share on $4.87 billion in revenue and raised its full-year outlook. Management reported results were materially helped by a $116 million one-time tariff refund and warned that comparable-store sales would slow.

The quarter beat analyst estimates of $0.37 per share and $4.83 billion in revenue. For the full year the company now expects at least $21.68 billion in net sales and $2.15 in earnings per share.

On the earnings call management confirmed the $116 million tariff refund significantly lifted second-quarter results. Executives noted the refund will be directed to customer growth initiatives rather than returned to shareholders or treated as recurring operating cash flow.

Macy’s said it now expects comparable-store sales to increase between 1% and 1.5% for the year, a slower pace than in earlier quarters.

Shares fell after the report, trading more than 20% below recent highs and moving through the stock’s 200-day moving average.

Rising Treasury yields and higher oil prices related to geopolitical tensions in the Middle East have increased borrowing costs and energy bills. Several apparel and department store peers have reported weak or cautious guidance in recent weeks.

Before the results Wall Street had a consensus Hold rating on the stock with a mean price target just above $23. Macy’s updated guidance narrowly exceeded those forecasts.

The company remains focused on its ‘A Bold New Chapter’ turnaround plan to streamline operations and re-energize the brand and will use the tariff refund to accelerate customer-facing initiatives.