Messi (M) earnings for the third quarter of 2025

Messi Sales on Wednesday beat Wall Street expectations for the third straight quarter and posted their strongest growth in more than three years as the company’s turnaround strategy showed signs of momentum.

The department store operator raised its full-year sales and profit forecasts after a better-than-expected fiscal third quarter. The retailer now expects adjusted earnings per share to be between $2 and $2.20, up from its previous forecast of $1.70 to $2.05, and net sales of $21.48 billion to $21.63 billion, compared to its previous forecast of $21.15 billion and $21.45 billion.

Macy’s said it expects flat sales growth of about 0.5% compared to the previous year. This compares to its previous forecast of a decline of between 0.5% and 1.5% on an annual basis. The industry measure takes one-time dynamics like store openings and closings, and Macy’s includes merchandise it owns, brand items it pays for space within its stores and its third-party online marketplace.

This marks the second straight quarter that Macy’s has raised its full-year sales and profit forecasts. The company cut its full-year profit forecast in May due to higher tariffs, more promotions and “some moderation” in discretionary spending.

However, projected annual sales would represent a decline from year-ago net sales of $22.29 billion. Macy’s said about $700 million of the annual net sales decline was due to 64 stores it closed at the end of the last fiscal year, which ended Feb. 1, and in the first part of this fiscal year.

Macy’s said in its press release that its outlook expects two difficult dynamics — selective spending by consumers and rising tariffs — to continue into the holiday quarter.

The company’s shares fell 7% in pre-market trading on Wednesday.

In an interview with CNBC, CEO Tony Spring said the company is taking a “prudent view” of the fourth quarter because it faces tough year-over-year comparisons and because it’s unsure how “aspirational customers,” those who like to shop at its stores but are under greater financial pressure, will spend during the season.

“We’re happy with the fourth quarter so far, but we have a big holiday ahead of us,” he said.

Macy’s department store model is an advantage during the gift-giving season because it offers a wide selection of merchandise and a range of prices, from low-end to high-end, Spring said.

Here’s what the store operator did during its fiscal third quarter compared to what Wall Street expected, based on a survey of analysts conducted by LSEG:

• Earnings per share: 9 cents, adjusted for an expected loss of 14 cents
• profit: $4.71 billion compared to $4.62 billion expected

Macy’s is trying to roll out better, more consistent sales, especially for its namesake brand. Macy’s stores account for the majority of the legacy retailer’s business in New York City, but its performance has lagged behind the company’s upscale department store, Bloomingdale’s, and the cosmetics chain, Bluemercury. To try to reverse the trend, the retailer has stepped up its investments in staffing, more visible merchandise and attractive displays in Macy’s stores. It first rolled out this strategy in 50 locations, which it called the “First 50,” and has since expanded the approach to a total of 125 Macy’s locations. That represents more than a third of the 350 namesake stores that Macy’s plans to keep open.

Along with the additional investment, it closed underperforming Macy’s locations. It announced in early 2024 that it would permanently close about 150 of its namesake stores by early 2027, while planning to add Bloomingdale’s and Bluemercury locations.

The company has not yet said how many additional stores it may close this fiscal year.

In the three-month period ending November 1, Messi’s net income fell to $11 million, or 4 cents per share, compared to $28 million, or 10 cents per share, in the same period last year. After adjusting for some one-time items, including gains on the sale of real estate, it reported earnings per share of 9 cents.

Revenues declined from $4.74 billion in the same quarter last year.

In the fiscal third quarter, companywide comparable sales increased 3.2% including owned and licensed merchandise and the third-party marketplace. When the company excluded stores that would not be part of its future business, this growth was 3.4%.

Bloomingdale’s posted the strongest performance for the company’s brands, with comparable sales jumping 9% year over year on a proprietary as well as licensing basis, including the third-party market. Bluemercury’s comparable sales rose 1.1%.

Spring attributed the company’s better performance to shoppers’ response to changes Macy’s has made to its older stores — such as additional employees ready to help and newer brands like upscale home goods company MacKenzie-Childs.

He said he visited Macy’s stores and those of its competitors on Black Friday and was happy with what he saw.

“I like the way we show up,” Spring said. “We look stylish. We look clean. We look interesting, compelling, inspiring and easy to shop for.”

Adapting to the cold weather also helped, he said. As temperatures dropped in October, shoppers purchased items including cashmere sweaters, outerwear and shoes.

For the holiday season, Spring said he expects promotions to be at levels similar to the same period last year at Macy’s stores and its website, along with those of its competitors.

However, higher tariffs will mean higher prices for some items. He said Macy’s worked with vendors and manufacturers to mitigate the impact of the fees, and the impact on margins in the third quarter was less than the company expected.

However, Spring said Macy’s has made “selective” price increases in almost every category, with some items becoming more expensive due to improved quality or added embellishments and some simply due to higher import costs.

As of Tuesday’s close, Macy’s shares were up about 34% so far this year. That exceeds the S&P 500’s gain of 16% over the same period. Macy’s stock closed Tuesday at $22.71, bringing the company’s market value to about $6.10 billion.