Macy's, Inc. (M) Business Profile

What it does

Macy’s, Inc. is a retailer that sells clothing, accessories, beauty products, home furnishings and other consumer goods through stores, websites and mobile apps. It operates under three names: Macy’s, Bloomingdale’s and Bluemercury. The company traces its founding to 1929 and is headquartered in Cincinnati. Tony Spring is chief executive officer and chairman.

The Macy’s nameplate is a department store serving a broad customer base, with merchandise for women, men and children as well as cosmetics and home goods. It operates full-line and smaller stores, alongside Macy’s Backstage, an off-price concept. Off-price retail offers merchandise at reduced prices rather than relying only on a traditional department-store assortment.

Bloomingdale’s serves customers shopping from premium contemporary brands through luxury goods. It also operates smaller Bloomies stores and Bloomingdale’s The Outlet. Bluemercury specializes in luxury beauty products and spa services, with an emphasis on skincare, treatments and fragrance.

As of January 31, 2026, the company operated 665 stores and served nearly 40 million active consumers annually. Its stores and digital channels are connected through services and loyalty programs intended to encourage customers to shop across both. Macy’s was organized as a Delaware corporation in 1985.

How it makes money

Macy’s earns most of its sales by selling merchandise in its stores and online. Its assortment covers women’s accessories, shoes, cosmetics and fragrances; women’s apparel; men’s and children’s merchandise; and home and other goods. Assortments vary with store size and local customer preferences. The company also sells products under private labels whose trademarks it owns, including apparel, beauty and home brands.

For FY2026, women’s accessories, shoes, cosmetics and fragrances generated $9.1 billion of revenue, or 41.9% of the total. Macy’s offers products across a range of prices, from off-price merchandise to luxury goods. Its private labels are intended to differentiate the assortment and support both margins and value for customers.

The company also earns revenue beyond merchandise sales. Its credit card program includes a profit-sharing arrangement, while Macy’s Media Network lets brand partners advertise across its platforms. Loyalty programs award points based on customer spending: Macy’s Star Rewards accepts several forms of payment, and Bloomingdale’s Loyallist and Bluemercury BlueRewards award points regardless of payment method. These programs are designed to encourage repeat visits and spending, although merchandise purchases are not subscription contracts.

Fiscal 2025 net sales declined 2.4% from 2024; in the second quarter of fiscal 2026, net sales rose 1.1% to $4.9 billion. Macy’s attributed the annual decline mainly to store closures at the end of fiscal 2024. Second-quarter 2026 other revenue was $193 million, including $156 million from credit cards and $37 million from the media network.

Sales and earnings are seasonal. A significant portion typically falls in the fourth quarter, which includes the holiday selling period.

Customers and how it sells

Macy’s serves shoppers across a range of incomes and price preferences. Its namesake department stores seek a broad middle-to-higher-income customer base, while Bloomingdale’s and Bluemercury target more affluent customers. The company also reaches value-conscious shoppers through its off-price formats.

Most stores are in urban or suburban locations, principally in densely populated areas across the United States. Bloomingdale’s also has licensed partnerships in Dubai, United Arab Emirates, and Al Zahra, Kuwait. Customers can shop through physical stores, websites and mobile applications; the company uses loyalty programs to connect activity across channels.

Macy’s said its credit card and loyalty program gave it visibility into over 70% of its customers. Its Macy’s Star Rewards program allows customers to earn points using Macy’s cards as well as other payment methods. The Bloomingdale’s and Bluemercury programs are also points-based and do not require a particular form of payment.

The company said its customer base skews toward middle- and higher-income shoppers, where performance had been more consistent, while lower-income shoppers were more selective. No individual customer concentration is disclosed in the available company information.

Suppliers and costs

Macy’s sources merchandise through a globally diversified supplier network. No individual supplier accounted for more than 4% of purchases in fiscal 2025, and the company says it has no material long-term purchase commitments with suppliers. It uses that flexibility to adjust inventory purchases as consumer preferences change. Its private-label portfolio includes products managed through its sourcing team.

Inventory requirements rise seasonally: working capital needs increase in mid-summer for fall merchandise and rise substantially before November and December. The company also incurs costs for stores, employees, fulfillment, technology and marketing. As of January 31, 2026, it had approximately 90,134 full-time and part-time U.S. employees, with staffing peaking during the holiday season.

Gross margin declined by 40 basis points in fiscal 2025, driven by tariffs after mitigation efforts. In the second quarter of fiscal 2026, ongoing tariff and fuel costs affected gross margin by approximately 10 basis points. Macy’s has opened a fulfillment and store-replenishment center at China Grove, using automation, robotics and artificial intelligence; it expects the facility to provide opportunities to improve delivery accuracy and timing and reduce costs.

Competitive position

Macy’s competes across department stores, off-price retail, specialty stores, mass merchants, marketplaces and direct-to-consumer brands. Competition involves pricing, brand relevance, convenience, customer service, fulfillment speed and the quality of the digital experience. No individual competitors are identified.

The company uses its three nameplates to serve different shopping occasions and price levels. Its private labels and owned trademarks help distinguish its merchandise assortment, while loyalty programs encourage customers to return and shop across channels. The company also uses events and experiences to engage customers. Its media network gives brand partners access to advertising across its platforms.

Our reading: Macy’s brands, private labels and customer relationships provide some differentiation, but their protection is limited by competition across many retail formats and by shoppers’ ability to compare price and convenience.

The company has stores, websites and apps, and it has invested in linking the shopping experience across them. Macy’s said its reimagined locations outperformed the rest of its Macy’s fleet in fiscal 2025, and it has continued expanding the program.

Our reading: The store network and digital channels give Macy’s multiple ways to reach customers, but they also require continued investment in staffing, merchandise and fulfillment to remain competitive.

Growth opportunities

Macy’s growth strategy, called Bold New Chapter, has three pillars: improve the Macy’s nameplate, expand and differentiate its luxury businesses, and simplify and modernize operations. The company is closing underproductive Macy’s stores and directing resources toward locations it plans to retain, while investing in customer service, merchandise and digital capabilities.

The company expanded its reimagined-store program from 125 locations in fiscal 2025 to 200 locations in fiscal 2026. Those stores received changes involving staffing, events, local-market strengths and assortments. In the second quarter of fiscal 2026, the reimagined locations delivered 1.9% comparable sales growth. The company plans to use part of its tariff refunds for pilots supporting further expansion in 2027.

Bloomingdale’s and Bluemercury are the company’s luxury growth platforms. Macy’s is investing in product selection, customer service and selected physical and digital expansion. In the second quarter of fiscal 2026, comparable sales increased 11.3% at Bloomingdale’s and 6.2% at Bluemercury.

Digital initiatives include shopping assistants at Macy’s and Bloomingdale’s and an expanded artificial-intelligence forecast overlay for inventory replenishment. Macy’s expects supply-chain efficiencies in the second half of fiscal 2026 to benefit gross margin. It also raised its full-year outlook and expects net sales of $21.675 billion to $21.825 billion, while maintaining its prior second-half sales assumptions.

Structural risks

• Consumer spending and competition: Macy’s depends on discretionary consumer spending and faces economic and political conditions that can affect demand. Retailers and platforms compete on price, service, convenience and product relevance.

• Strategy execution: The company’s strategic plans may not succeed. Store closures, investments in retained locations and changes to assortments and operations are part of its strategy, and unsuccessful initiatives could affect profitability and growth.

• Supply chain and tariffs: Macy’s depends on vendors and other sources of merchandise, goods and services outside the United States. Tariffs reduced its fiscal 2025 gross margin, even after mitigation efforts, and tariff and fuel costs continued to affect margin in the second quarter of fiscal 2026.

• Technology and fulfillment: Disruptions at distribution and fulfillment centers could affect operations. A technology breach could damage customer and business-partner relationships and lead to remediation, legal and other costs.

• Debt and asset impairments: Macy’s has incurred losses from impairments of long-lived assets. As of January 31, 2026, its total outstanding indebtedness was $2,432 million; debt obligations could limit flexibility and require cash that would otherwise be available for business needs.

Bottom line

Our reading

Macy’s is a seasonal, multi-brand retailer whose business rests on merchandise sales, customer relationships and a network of stores and digital channels, supplemented by credit card and advertising revenue. Its strategy is shifting resources toward retained stores and luxury businesses, with comparable sales growth alongside the decline in annual net sales. Execution, discretionary spending, tariffs and the cost of maintaining stores and fulfillment remain important exposures.