The news: Macy’s raised its full-year outlook for net sales, comparable sales, and earnings per share after posting growth across its portfolio in fiscal Q2.

The gains are the latest sign that the retailer’s “Bold New Chapter” turnaround strategy—which includes revamping and refreshing Macy’s stores, expanding luxury formats, and modernizing operations—is creating a healthier, more differentiated business.

The numbers:

• Comparable sales rose 2.7% YoY, and net sales reached $4.87 billion in the quarter ended August 1, ahead of the $4.83 billion analysts surveyed by LSEG expected.
• The Macy's nameplate posted comparable sales growth of 1.1%, its fifth straight quarter of gains.
• Bloomingdale's comparable sales jumped 11.3%, a second straight quarter of double-digit growth and its highest Q2 sales volume in its 154-year history.
• Bluemercury comparable sales rose 6.2%.
• Adjusted EPS were 40 cents, ahead of the 37-cent estimate.
• Full-year guidance rose to net sales of $21.68 billion to $21.83 billion (from $21.5 billion to $21.75 billion), comparable sales growth of 1% to 1.5% (from 0.5% to 1.2%), and EPS of $2.15 to $2.35 (from $2 to $2.20), including a roughly 5-cent boost from tariff refunds.

Zooming in: The Macy’s nameplate’s fifth straight quarter of comparable sales growth was driven by outsize performance at the roughly 200 “reimagined” stores where the retailer has revamped key departments, increased staffing, improved visual presentations, and refreshed products under its turnaround plan. Its online marketplace continued to expand.

Bloomingdale’s, meanwhile, appears to be capturing share as Saks struggles and closes stores. Its comparable sales growth is up nearly 1,700 basis points on a two-year stack, helped by customer growth and greater engagement with its Very Important Client program for top spenders. Bloomingdale’s is also creating its own momentum by refreshing its assortment with brands such as Ulla Johnson and Dries Van Noten and leaning into in-store events.

Implications for retailers: Macy’s results show the potential payoff from investing in stores, merchandising, and the customer experience. The reimagined Macy’s stores are boosting the retailer’s Net Promoter Score, while Bloomingdale’s assortment and experiential investments are helping it capitalize on Saks’ challenges.

Macy’s is doubling down on that strategy by reinvesting $96 million of its $116 million in tariff refunds into the customer experience rather than price cuts. That contrasts with retailers using their refunds to sharpen prices and reflects a longer-term bet that a better experience will do more to drive loyalty and growth. That approach isn’t without risk. With costs continuing to rise and middle- and lower-income consumers under pressure, Macy’s will need to ensure that investing in experience doesn’t weaken the value proposition at its namesake stores.

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