Bloomingdale's Momentum Strengthens Macy's Luxury-Led Growth Profile

Macy’s Inc. M strengthened its luxury-led growth profile in the third quarter of fiscal 2025, with Bloomingdale’s emerging as a standout performer under the company’s Bold New Chapter strategy. The upscale banner delivered a robust 8.6% comparable sales increase, marking its fifth consecutive quarter of growth and its strongest comps performance in 13 quarters. Management highlighted that Bloomingdale’s differentiated positioning and loyal, high-value customer base played a central role in lifting enterprise-wide results.

Bloomingdale’s performance was driven by strong demand across key categories, including ready-to-wear apparel, fine jewelry, shoes and tabletop. Additions of high-profile designer brands, such as Zimmermann, Toteme, Victoria Beckham and Christian Louboutin, enhanced assortment depth and reinforced the banner’s reputation as a destination for discovery. Improved execution and elevated service levels also supported a sequential increase in Net Promoter Scores, signaling strengthening customer engagement.

The luxury banner continues to serve as a critical earnings stabilizer for Macy’s, particularly as the core Macy’s nameplate works through a longer-term turnaround. Bloomingdale’s higher average unit retail, stronger full-price sell-through and resilient affluent customer base helped offset softness in select mass categories and supported margin performance in the third quarter, even amid lingering tariff-related pressures.

Bluemercury further complemented Macy’s luxury portfolio, posting another quarter of positive comparable sales growth, driven by dermatological skincare and expanded brand partnerships. Together, Bloomingdale’s and Bluemercury underscore the importance of premium and luxury offerings in Macy’s multi-brand strategy, providing diversification across price points and customer segments.

Macy’s plans to build on Bloomingdale’s momentum through targeted market expansion, continued digital investment, and selective rollout of small-format Bloomie’s and outlet locations. By deepening personalization, strengthening exclusive brand collaborations and enhancing omnichannel experiences, Macy’s aims to leverage Bloomingdale’s as a long-term growth engine within a more balanced and higher-quality earnings mix.

Brand-Led Momentum at KSS & COST vs. Macy’s

Kohl’s Corporation KSS continued to lean on its proprietary brand portfolio in the third quarter of fiscal 2025, with owned labels driving engagement in key apparel categories. Kohl’s saw solid traction from women’s brands, such as Simply Vera Vera Wang and Lauren Conrad, alongside strength in activewear brands like FLX and Tek Gear. Management noted that these brands helped reinforce value perception and supported merchandise margin performance. In addition, Kohl’s highlighted Sephora as a major national brand partner, remaining a significant traffic and sales driver during the quarter.

Costco Wholesale Corporation COST continued to benefit from the strength of its private-label and national brand mix in the first quarter of fiscal 2026. Costco highlighted Kirkland Signature as a key differentiator, with the brand delivering strong sales growth across food, sundries and non-food categories while reinforcing its value proposition. Management noted that Kirkland Signature’s quality and pricing helped drive member trust and loyalty, supporting traffic and renewal rates. In addition, Costco maintained strong partnerships with leading national brands, ensuring assortment relevance while protecting margins.

Macy’s Price Performance, Valuation & Estimates

Shares of the company have surged 82.7% in the past six months as compared with the industry’s 62.1% growth.

From a valuation standpoint, Macy’s is trading at a forward 12-month price-to-sales ratio of 0.29X, down from the industry average of 0.52X. 

The Zacks Consensus Estimate for Macy’s fiscal 2025 earnings implies a year-over-year decline of 18.2%, whereas the same for fiscal 2026 indicates an uptick of 2.9%. Estimates for fiscal 2025 and 2026 have been revised upward by 16 cents and 24 cents, respectively, in the past 30 days.

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

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

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