Here's How Bloomingdale's & Bluemercury Drive Macy's Growth in 2025

Macy’s Inc. M is placing significant emphasis on its luxury divisions, Bloomingdale’s and Bluemercury, as central pillars of growth under its Bold New Chapter strategy.

In the second quarter of fiscal 2025, Bloomingdale’s reported a 4.6% year-over-year increase in net sales and a 5.7% rise in comparable sales, achieving record second-quarter sales and a high Net Promoter Score. Bluemercury continued its strong performance with a 1.2% increase in comparable sales, marking its 18th consecutive quarter of growth. These results underscore the resilience and importance of Macy’s luxury portfolio in driving its overall performance.

Bloomingdale’s success stems from its differentiated positioning within the premium contemporary-to-luxury segment. The banner performed strongly across categories, such as ready-to-wear, fine jewelry, fragrance and tabletop, bolstered by exclusive partnerships. Special capsule collections, including collaborations with MOTHER, STAUD and AQUA with Ava Phillippe, helped generate excitement and attract foot traffic, demonstrating the effectiveness of its curated, high-end offerings.

The new fall campaign, “Just Imagine,” highlights Bloomingdale’s commitment to blending creativity with exclusivity through engaging in-store and digital experiences. Macy’s plans to deepen Bloomingdale’s luxury footprint by adding brands, expanding distribution channels and opening additional small-format and outlet stores to strengthen local market presence. These initiatives aim to enhance brand reach and sustain momentum in the premium segment.

Bluemercury remains a key growth driver within Macy’s portfolio, benefiting from strong demand for dermatological skin care and luxury beauty products. Recent brand introductions, such as Byredo, Victoria Beckham Beauty and Charlotte Tilbury, have reinforced its position as a high-end beauty destination. The banner’s consistent positive comparable sales performance reflects its strong connection with aspirational and luxury consumers who prioritize premium offerings even amid cautious spending.

The financial impacts of Macy’s luxury strategy are substantial, with nearly half of its customer base earning more than $100,000 annually, and Bloomingdale’s targeting an even more affluent demographic. While Macy’s core stores posted modest gains, the luxury banners not only outperformed but captured market share, emphasizing their strategic importance.

Management expects continued growth through Bloomingdale’s digital and outlet expansion and exclusive collaborations, along with Bluemercury’s steady pipeline of new brands, positioning luxury as a central driver of sustainable, profitable growth for Macy’s in the coming years.

Macy’s Price Performance, Valuation & Estimates

Shares of the company have gained 33.4% in the past month as compared with the industry’s 20.3% growth.

From a valuation standpoint, Macy’s is trading at a forward 12-month price-to-sales ratio of 0.22X, down from the industry average of 0.46X. M has a Value Score of A.

The Zacks Consensus Estimate for Macy’s fiscal 2025 earnings implies a year-over-year decline of 30.3%, whereas the same for fiscal 2026 indicates a downtick of 0.7%. Estimates for fiscal 2025 and 2026 have been revised upward by 3 cents and 2 cents, respectively, in the past 30 days.

Macy’s currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Key Picks

Some better-ranked stocks are Genesco Inc. GCO, Urban Outfitters Inc. URBN and Tilly's, Inc. TLYS.

Genesco is a Nashville-based specialty retail and branded company that sells footwear and accessories in retail stores. It currently flaunts a Zacks Rank of 1.

The Zacks Consensus Estimate for GCO’s fiscal 2026 earnings and sales implies growth of 67% and 3%, respectively, from the year-ago actuals. Genesco delivered a trailing four-quarter average earnings surprise of 28.1%.

Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gift items. It carries a Zacks Rank #2 (Buy) at present.

The Zacks Consensus Estimate for Urban Outfitters’ current fiscal-year earnings and sales indicates growth of 26.4% and 9.2%, respectively, from the year-ago actuals. URBN delivered a trailing four-quarter average earnings surprise of 24.8%.

Tilly's is a specialty retailer in the action sports industry, selling clothing, shoes and accessories. It has a Zacks Rank of 2 at present. 

The Zacks Consensus Estimate for Tilly's current fiscal-year earnings indicates growth of 8.8% from the year-ago actual. TLYS delivered a trailing four-quarter average earnings surprise of 60.7%.

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This article originally published on Zacks Investment Research (zacks.com).

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