Macy's Posts First Sales Growth in Three Years Prematurely
Macy's just did something it hasn't managed since early 2022: it actually grew sales. The stock shot up 16% Wednesday on news that same-store sales rose 1.9% in the second quarter, breaking a three-year losing streak that had investors wondering if the department store had a pulse.
New CEO Tony Spring, who's been running the show since February 2024, called it "the beginning of momentum." That's one way to spin it. Another way? After closing 57 stores in a year and with plans to shutter 150 more, they finally managed to squeeze out some growth from what's left.
Stores Are Still Closing
The numbers look decent on paper. Those 125 stores where Macy's actually invested money in better merchandise and service? They grew 1.4%. The company's raising its revenue and earnings outlook for the year. Spring's talking about "resiliency in the consumer" and calling Macy's "retail therapy" and "an opportunity of escapism."
But here's the reality check: Macy's is still planning to close more stores. A lot more stores. They're down to 449 locations from 506 a year ago, and Spring admitted Wednesday that "we still have more locations and supply chain facilities to close." He's promising to reveal more closures in the fourth quarter, because apparently 150 store closings isn't quite enough "pruning" for this retail garden.
Spring's trying to thread an impossible needle here. "I'm a big believer in stores," he says, while simultaneously orchestrating one of the biggest store closure campaigns in retail history. It's like saying you believe in marriage while filing for your third divorce.
The Numbers Might Lie
The timing of this "turnaround" is interesting. Macy's is essentially celebrating growth that comes from having fewer mouths to feed. Close your worst-performing stores, and surprise - your average performance improves. It's statistics, not strategy.
Dana Telsey from Telsey Advisory Group isn't buying the hype, keeping her "Market Perform" rating on the stock. She points out what should be obvious: "near-term visibility for sales and profitability growth remains limited." Translation: this might just be a dead cat bounce.
Even with Wednesday's pop, Macy's stock is still down 6% for the year. One good quarter doesn't erase three years of decline, especially when that quarter comes with an asterisk about massive store closures.
Spring's comments about not knowing "what the fall is going to bring" in terms of consumer behavior and tariff rates should worry investors. If your CEO is essentially shrugging about the next few months while touting a single quarter of minimal growth, that's not exactly confidence-inspiring.
In-Store Retail Therapy Is A Dying Trend
The whole "retail therapy" and "escapism" pitch feels desperately out of touch. People aren't flocking to Macy's to escape their problems - they're ordering from Amazon while watching Netflix. The idea that a department store provides escapism in 2025 is like arguing that payphones offer convenience.
What's really happening here is a managed decline dressed up as a turnaround. Macy's is getting smaller, not better. They're closing stores, cutting costs, and hoping the remaining locations can hold the line long enough to figure out what a department store even means in modern retail.
The invested stores showing growth is nice, but it also reveals the problem: Macy's needs significant investment just to achieve 1.4% growth. How much did they spend for that small increase? And can they afford to do that across all remaining stores while also dealing with potential tariff increases?
Spring talks about consumers being "resilient but deliberate" in their purchases. That's retail-speak for "people aren't spending much." When your customers are being "deliberate," it means they're thinking twice before buying that overpriced handbag or those designer shoes. That's not the mindset that builds retail empires.
The comparison to 2022 is telling. That was peak inflation, supply chain chaos, and the tail end of pandemic disruptions. Beating those numbers isn't exactly climbing Everest. It's more like stepping over a bar that's lying on the ground.
The Bottom Line
Sure, maybe Macy's turns this around. Maybe closing another 150 stores creates a lean, mean, department store machine. Maybe Americans suddenly rediscover their love for wandering through multiple floors of merchandise instead of clicking "add to cart."
But probably not. This feels less like the beginning of momentum and more like the last gasp of a retail model that's been dying for years. One positive quarter after three years of decline, achieved mainly by shrinking the company? That's not a turnaround. That's hospice care with a PR department.
Investors cheering this news might want to remember: sometimes things bounce when they hit bottom. This doesn't mean they're flying.
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