Macy's Q1: first quarterly sales growth in nearly 4 years (ends 15 straight quarters of decline). Bloomingdale's comps +10.2%, Bluemercury +6.4%, namesake stores +1.6%. Raised FY26 guidance. Stock +4%. K-shaped recovery thesis validated.

Macy's reported Q1 net sales of $4.68B, up 1.8%, beating the $4.61B estimate and ending 15 consecutive quarters of sales declines. Bloomingdale's comps jumped 10.2%, Bluemercury +6.4%, and the namesake Macy's stores ticked up 1.6%. Adjusted EPS came in at $0.13. CEO Tony Spring's "Bold New Chapter" turnaround strategy (focus on higher-end labels, expand full-price sales, reinvest in higher-potential locations, close underperforming stores) is now showing real results. Management raised FY26 guidance: net sales to $21.50B-$21.75B (from $21.40B-$21.65B) and adjusted EPS to $2.00-$2.20 (from $1.90-$2.10). Stock popped about 4 percent in premarket.

The bigger CPG read is that the K-shaped recovery in U.S. consumer spending is now showing up clearly in retailer earnings. Capri Holdings (Michael Kors parent) raised guidance last month. Ralph Lauren beat last quarter, particularly on its "elevated middle market" strategy. Bath & Body Works beat on the affordable luxury thesis. Now Macy's is printing positive comps on the back of Bloomingdale's and Bluemercury, the higher-end pieces of its portfolio. The pattern is clear: higher-income shoppers continue to splurge on discretionary and luxury, while lower-income households are pulling back. For any CPG brand selling into either Macy's or Bloomingdale's, the strategic implication is to lean into the elevated tier of your assortment and expect the value tier to keep softening through the back half of 2026.

For CPG operators and brand teams: where exactly is your brand sitting on the K right now, and how are you adjusting your pricing architecture and assortment to follow the high-income consumer who's actually still spending? And for the M&A folks: does the Bloomingdale's / Bluemercury outperformance change anything about how strategic acquirers value premium-tier beauty and apparel brands over the next 12 months?

Source - Business of Fashion