Title
Earning Preview: Macy's Q4 revenue is expected to decrease by 3.24%, and institutional views are bearishAbstract
Macy's will report fiscal fourth-quarter results on March 18, 2026 Pre-Market, with the street tracking revenue around $7.61 billion and adjusted EPS near $1.54 as investors focus on holiday margin execution, expense control, and any updates to full-year guidance.Market Forecast
For fiscal Q4 2025, the market’s baseline points to revenue of $7.61 billion, down 3.24% year over year, EBIT of $568.50 million, down 3.08% year over year, and adjusted EPS of $1.54, up 0.71% year over year. No explicit forecast for gross profit margin or net profit margin is available from the compiled estimates, so margin expectations are being inferred from holiday promotional intensity and mix.Based on last quarter’s category mix, the holiday outlook is expected to be led by women’s accessories, intimates, shoes, cosmetics and fragrances, a high-margin category that comprised $1.95 billion, or 39.65% of sales, and is likely to influence Q4 gross margin more than any other line. The most promising contributor within that mix is beauty and fragrance—embedded in the $1.95 billion category—where gifting and replenishment typically support sell-throughs; year-over-year growth by sub-category is not disclosed.
Last Quarter Review
Macy's delivered fiscal Q3 2025 revenue of $4.71 billion (-0.61% year over year), a gross profit margin of 41.89%, GAAP net profit attributable to shareholders of $11.00 million, a net profit margin of 0.22%, and adjusted EPS of $0.09 (+125.00% year over year). Sequentially, net profit declined by 87.36% quarter over quarter, while EBIT registered $46.00 million (+12.20% year over year), indicating a tighter margin backdrop into the shoulder quarter despite improved operating income versus last year.On the business mix, women’s accessories, intimates, shoes, cosmetics and fragrances led at $1.95 billion (39.65% of sales), followed by women’s apparel at $1.10 billion (22.47%) and men’s and kids’ apparel at $1.02 billion (20.82%); other apparel contributed $638.00 million (12.99%) and other categories $200.00 million (4.07%), with category-level year-over-year changes not disclosed.
Current Quarter Outlook (with major analytical insights)
Core business: Women’s accessories, intimates, shoes, cosmetics and fragrances
The combined accessories/beauty/shoes/intimates complex is the core profit engine entering the holiday quarter, both because of its scale and because beauty and accessories typically carry higher merchandise margins than most apparel sub-categories. With last quarter revenue of $1.95 billion and a 39.65% contribution to company sales, this mix is well positioned to shape Q4 gross margin. Merchandising success here hinges on maintaining full-price sell-through on newness, balancing seasonal gifting sets in beauty with replenishment items, and calibrating promotions to drive conversion without materially diluting AUR (average unit retail). The breadth of brands and vendor-funded marketing in beauty can support traffic, but stacking promotions or extended discounts to clear seasonal inventory can pressure unit economics. Given management’s historical focus on inventory discipline into the holiday period, investors will look for signs that markdown cadence remained controlled and that sell-through rates supported a mid- to high-40% gross margin profile for the quarter, even though formal guidance is not available in the dataset. A key nuance is that while beauty and accessories lift margin, footwear and intimates can carry mixed margin dynamics depending on vendor allowances and clearance—so mix within the mix matters and will be read closely against the revenue and EBIT outcomes.Most promising business: Beauty and fragrance within the Accessories/Beauty/Shoes mix
Within the core mix, beauty and fragrance remain poised to outperform on the back of gifting, eventing, and replenishment demand that tends to hold share during holiday periods. These categories typically benefit from curated holiday sets, vendor launch calendars, and loyalty-driven purchase patterns, which can yield better gross margin stability relative to fashion-sensitive apparel. Macy’s merchandising around prestige and mass segments, complemented by in-store and online discovery experiences, often supports both traffic and attachment rates in adjacent categories such as accessories and shoes. The operational swing factor will be how well the company aligned receipts with demand, minimizing end-of-season carryover that would necessitate discounting in late December or early January. Because beauty’s economics are generally higher margin, a small beat or miss in this sub-category can disproportionately influence overall gross margin; as a result, investors will watch inventory aging and sell-through closely when Q4 commentary arrives. While year-over-year growth data by sub-category is not disclosed in the dataset, the scale of the combined category at $1.95 billion last quarter underscores its potential to buffer gross margin if demand skews toward beauty and fragrance rather than deep holiday clearance in apparel.Key stock price drivers this quarter
The stock’s near-term path will likely be driven by top-line delivery versus the $7.61 billion revenue forecast and whether unit demand required incremental promotions to clear seasonal goods. If the sales shortfall is modest but accompanied by disciplined markdowns, gross margin could hold up, supporting EBIT’s $568.50 million expectation and the $1.54 adjusted EPS forecast; conversely, a deeper promotional stance to drive traffic would erode margin leverage and compress EPS even if revenue lands near plan. Operating expense run-rate is another lever: if SG&A efficiency offsets softer sales, EBIT could still align with expectations, but cost deleverage would amplify downside to EPS. Credit income and tender mix also matter for department store models; any deterioration in proprietary credit performance could weigh on non-merchandise margin contributions, while stabilization would help protect the bottom line. Capital return policy enters the narrative as well: the announced increase in the quarterly dividend to $0.1915, payable April 1 to holders of record on March 13, signals management confidence in cash generation and could cushion sentiment if holiday sales are near the midpoint of expectations. Taken together, the interaction of revenue delivery, gross margin discipline within the accessories/beauty/shoes mix, and SG&A leverage will determine whether adjusted EPS meets or deviates from the modest +0.71% year-over-year growth implied by current forecasts.Analyst Opinions
Based on articles published between January 1, 2026 and March 11, 2026 that discuss Macy’s explicitly, the identifiable rating action in this period skews bearish: UBS maintained a Sell rating and adjusted its price target to $9, reinforcing a cautious stance into the holiday print. Counting explicit stances captured in this window yields a bearish majority (bearish 1, bullish 0), while the broader consensus rating profile referenced in-market remains around Hold with a mean price target near $21.67; the dominant actionable view in the period is therefore bearish, and we focus on that angle.The bearish perspective emphasizes that the holiday quarter still faces a negative year-over-year revenue comparison, with forecasts calling for a 3.24% decline to $7.61 billion. Even as EPS is modeled to edge up by 0.71% to $1.54, this relies on a delicate balance of gross margin discipline and cost control in a category mix that can shift quickly with promotional intensity. The sequential volatility in profitability—evidenced by last quarter’s 87.36% quarter-on-quarter drop in GAAP net profit—highlights operating leverage and execution risk if traffic required more aggressive markdowns than planned or if sell-throughs in discretionary apparel lagged. Bears argue that EBIT of $568.50 million (-3.08% year over year) leaves limited buffer if gross margin or SG&A runs overshoot, setting a low tolerance for any deterioration in mix or clearance rates.
From a category standpoint, skeptics see the concentration of margin in the accessories/beauty/shoes complex as a double-edged sword: while beauty and fragrance can buoy profitability, a heavier-than-expected dose of clearance in footwear or accessories would dilute the benefit. They also point to the absence of explicit gross margin guidance in the collated estimates and to the lack of disclosed category-level year-over-year growth data, which complicates forecasting mix effects. Finally, dividend growth—while supportive for total return—does not eliminate near-term earnings execution risk if the company must lean into promotions to clear seasonal inventory, which would compress the relationship between revenue and EBIT. On balance, the bearish camp will be most sensitive to any shortfall versus the $7.61 billion revenue marker and to commentary around markdown cadence, inventory aging, and the sustainability of gross margin into early spring transitions.
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