Turnaround gains momentum as luxury sales and pricing power rise
- Q2 2026 go-forward comparable sales rose 2.8%, showing continued traction for the turnaround plan.
- Bloomingdale's led growth with comparable sales up 11.3%, reaching its highest second quarter volume ever.
- Higher average prices drove sales growth but introduced slight pressure on shopper conversion rates.
- Management raised full-year guidance and now expects tariffs to act as a tailwind in the second half of the year.
A real turn backed by strong luxury demand
Macy's has moved from a weak department store story to a highly credible turnaround. Q2 2026 gave investors clear proof, with go-forward comparable sales rising 2.8 percent. All nameplates remained positive, and Bloomingdale's posted an impressive 11.3 percent comparable sales gain.
The bull case centers on the Bold New Chapter plan showing structural results. The core Macy's banner posted its fifth straight quarter of positive comparable sales. Higher average unit retail prices, up nearly 9 percent in Q2, are driving healthy top-line growth. Previous tariff risks have shifted into an expected tailwind for the second half of the year as refunds provide capital to reinvest in store pilots.
The bear case rests on the risk that aggressive premium pricing could pressure customer conversion rates, especially if holiday shoppers weaken. Lower conversion rates mean less room for error on overall basket size. Even with raised guidance, investors want to see if this momentum can outlast a potential consumer slowdown.
Stores, websites, cards, and ads
Macy's makes most of its money by selling goods directly to shoppers in stores and online. Its three main nameplates are Macy's, Bloomingdale's, and Bluemercury. It also earns other revenue from credit cards, net of losses, and from Macy's Media Network, its retail advertising business.
The company is trying to shrink and improve at the same time. It plans to close about 150 weaker Macy's stores and reinvest in about 350 go-forward locations. The closure schedule now runs through 2028 so Macy's can try to get more value from the real estate.
This model breaks if store traffic weakens, if fashion misses force markdowns, or if higher prices drive away price-sensitive shoppers. It also depends on execution. The Reimagine stores need to keep beating the rest of the fleet.
Three banners with different jobs
Macy's stores and digital
This is the largest nameplate and the main turnaround project. The core banner posted its fifth straight quarter of positive comparable sales in Q2 2026.
Bloomingdale's
Bloomingdale's is the luxury department store business. It grew comparable sales 11.3 percent in Q2 2026 and reached its highest second quarter sales in its history.
Bluemercury
Bluemercury sells luxury beauty, skincare, fragrance, and spa services. Comparable sales rose 6.2 percent in Q2 2026.
Private brands
Macy's is refreshing its own brands, including Charter Club and Style & Co. These can help product control and margins if shoppers respond.
Small-format stores
Macy's is adding smaller Macy's, Bloomie's, and Bloomingdale's the Outlet locations. These stores could help reach customers outside the traditional mall format.
Credit card and media revenue
Other revenue includes credit card revenue, net of losses, and Macy's Media Network. This stream is smaller than merchandise sales but can matter for profit.
Revenue is still mostly retail sales
Macy's reports net sales and other revenue. The vast majority of its revenue consistently comes from direct merchandise sales across its three brands, with credit card and media income providing a smaller margin boost.
What could break the turn
Higher prices hurt conversion
High impact · Medium oddsAverage unit retail prices rose about 9 percent in Q2, which drove sales but slightly lowered conversion rates. If prices push too high, shoppers might walk away empty-handed during the holiday season.
Bloomingdale's cools off
High impact · Medium oddsBloomingdale's drove much of the upside, with Q2 comparable sales up 11.3 percent. Luxury shoppers can cut spending quickly if markets, jobs, or confidence weaken.
Store closures miss the real estate goal
Medium impact · Medium oddsMacy's plans to close about 150 weaker stores and focus on about 350 go-forward locations. The timeline now runs through 2028 to seek better real estate value. If sales fall before assets are sold well, the plan loses some funding power.
Tariff policy reversals
Medium impact · Medium oddsManagement expects tariffs to be a tailwind in the second half of 2026 due to refunds. However, trade policy is highly volatile, and any new tariffs could quickly pressure gross margins again.
In one breath
Is Macy's a turnaround stock?
Yes, the current thesis is mainly a turnaround thesis. The key proof points are positive comparable sales across all banners and exceptional strength at Bloomingdale's.
What is Macy's Bold New Chapter plan?
It is Macy's multi-year plan to improve the customer experience, refresh products, close weaker stores, invest in go-forward stores, grow luxury, and modernize operations.
Why does Bloomingdale's matter so much to Macy's?
Bloomingdale's is Macy's luxury department store nameplate, and it is growing much faster than the core Macy's banner. In Q2 2026, Bloomingdale's comparable sales rose 11.3 percent.
What should investors watch next?
Watch whether higher prices continue to hurt shopper conversion, especially during the holiday season. Also watch Bloomingdale's momentum and the performance of the Reimagine 200 stores.
Sources and research notes
This page combines Finn's company research with public filings and other cited materials. The thesis is reviewed when material company information changes; Finn Scores use the latest available scoring data.
- Thesis reviewed
- September 20, 2026
- Score data
- September 27, 2026
- Reviewed by
- Shivam Bharuka
Comparable Department Stores companies
Companies near Macy's, Inc. in Finn's Department Stores industry ranking.
