Macy’s Credits AI, Reimagined Stores and Loyalty Data for Return to Growth

Macy’s returned to positive comparable sales in fiscal 2025, marking what the company called an inflection point after years of contraction.

The earnings result reflects not just improved merchandising but a structural shift in how the company is using customer data, store formats and digital channels together.

The company’s bold new chapter strategy, now in its second year, has moved from pilot to scale. The reimagined store initiative, initially tested at 50 locations, now covers 200 stores, representing roughly 60% of the go-forward Macy’s fleet and approximately 75% of go-forward store sales.

CFO Tom Edwards described the expansion as the company graduating from iteration to full deployment, with local store leaders now given more autonomy over staffing, events and assortment decisions rather than following a centralized playbook.

“I believe Macy’s Inc. has significant, underappreciated capabilities in areas such as data science, AI and technology, and our Macy’s ecosystem is a fundamental strength,” Edwards said on the earnings call.

AI at the Center

The company has identified more than 35 internal AI use cases spanning supply chain, merchandising, marketing and call centers, as well as customer-facing and omnichannel functions. The framing from CEO Tony Spring was deliberately disciplined: “We are not buying shiny objects. We are solving problems.”

The company’s newly completed China Grove distribution center, described as state of the art and automated, is providing the infrastructure foundation on which AI-driven supply chain improvements are being layered. Delivery time improvements and customer-visible fulfillment estimates are among the earliest outputs.

Macy’s Media Network, which grew revenue 12.5% in the fourth quarter, is also being positioned as part of this data stack, with an Amazon advertising integration announced earlier this year signaling external monetization of the loyalty audience.

Consumer Cohort Split

Macy’s customer base skews middle to upper income, and that composition is becoming a strategic buffer. Spring noted that lower-income cohorts are “more choiceful,” while middle- and upper-income customers have remained resilient, a dynamic the company said continues into the current quarter. Average transaction value is rising even as unit volumes are modestly softer, and traffic in stores was described as essentially flat outside of weather disruptions, with digital traffic up across all three nameplates.

The company is also investing in generational acquisition. The prom activation, held at more than 200 Macy’s and Bloomingdale’s locations, brought high school-age shoppers into stores through partnerships with content creators and beauty events.

Spring described these moments, including sweet sixteen, weddings and first jobs, as structural entry points rather than one-time promotions. Bloomingdale’s bridal registry data reinforces the point: 75% of the approximately 25,000 couples who registered in the past year are Gen Z.

What Else Stood Out on the Call

• Macy’s now expects to complete the remaining approximately 65 store closures through 2028, extending the timeline to capture better real estate market timing and maximize asset value, with total monetization proceeds now projected at $650 to $700 million.
• The credit card portfolio grew other revenue 17.1% in the fourth quarter, with improved net credit quality, higher application volume and tighter integration with digital and in-store acquisition.
• The company ended fiscal 2025 with inventories down 1.3% year over year, more newness in the mix, fewer aged goods, and open-to-buy flexibility preserved heading into spring.
• Macy’s introduced 60 new brands in fiscal 2025, including Abercrombie Kids, BCBG and Good American. Bloomingdale’s added Christian Louboutin, Skims, Vuori and Victoria Beckham Beauty, among others.

• For fiscal 2026, the company is centering its marketing calendar around the parade’s 100th anniversary and the 50th anniversary of its Fourth of July fireworks, framing the year internally as “celebrations start at Macy’s.”

Topline Results

Macy’s reported Q4 net sales of $7.6 billion, above guidance of $7.35 to $7.5 billion, with comparable sales up 1.8%. Go-forward comparable sales rose 2%. Bloomingdale’s led with 9.9% comparable sales growth; Macy’s go-forward comps rose 0.6%; Bluemercury was up 1.3%.

The company returned $448 million to shareholders in fiscal 2025. For fiscal 2026, Macy’s guided to net sales of $21.4 to $21.65 billion, comparable sales of down 0.5% to up 0.5%, and adjusted diluted EPS of $1.90 to $2.10, incorporating a $0.10 to $0.20 tariff impact.

 

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