Macy’s Inc. Chief Executive Officer Tony Spring confirmed on February 25, 2025, that the retailer expects no sales growth in fiscal 2026 following a revenue drop in 2025. This flat outlook shows the company’s turnaround plan needs more time to stabilize its department store business across the United States.
Macy’s reports lower annual revenue as store closures continue
Macy’s Inc. reported that total sales for the 2025 fiscal year fell below previous levels as the company struggled with cautious consumer spending. Chief Executive Officer Tony Spring stated during the earnings call that the company is now entering a period of stabilization rather than immediate expansion. This means the retailer is focusing on protecting its profit margins instead of trying to force sales growth in a difficult market.
The company is currently executing a strategy called "A Bold New Chapter," which involves shutting down underperforming locations to save money. Macy’s Inc. confirmed that comparable sales, which track performance at stores open for at least one year, remained under pressure throughout the final months of 2025. This metric is a key health indicator for retailers because it excludes the impact of opening or closing new shops.
Net income for the year was affected by the costs of closing stores and managing inventory levels. Chief Financial Officer Adrian Mitchell noted that the company is managing its expenses tightly to offset the lower foot traffic seen at many mall-based locations. By keeping less stock on shelves, the company avoids having to use deep discounts that hurt its total earnings.
The shift away from traditional mall-based department stores
Macy’s Inc. began its massive restructuring plan in early 2024 after facing years of competition from online retailers and discount chains. The company announced it would close 150 namesake stores by the end of 2026 to focus on its most profitable locations. This decision followed a period where many large department stores saw fewer shoppers as people moved toward digital platforms like Amazon.
Historical data shows that Macy’s once operated over 800 stores across the country, but that number has steadily decreased to improve financial health. Similar retailers like J.C. Penney and Sears faced similar struggles, with many eventually entering bankruptcy. Macy’s Inc. is attempting to avoid that path by shrinking its physical footprint before its debt becomes unmanageable.
The retailer is also following a trend seen in the broader retail industry where companies move away from large "anchor" spots in malls. Instead, they are testing smaller stores located in outdoor shopping centers where customers can park closer to the entrance. This change reflects a shift in how Americans shop, preferring quick trips over long walks through massive shopping malls.
Impact on retail workers and mall real estate owners
The forecast for flat sales in 2026 suggests that hiring will likely remain frozen at many Macy’s locations. Retail employees at the 150 stores marked for closure face job losses or the need to transfer to other branches. This creates uncertainty for thousands of workers who rely on the department store for steady income and benefits.
Mall owners and real estate investment trusts are also feeling the effect of Macy’s shrinking presence. When a Macy’s store closes, it leaves a large empty space that is difficult to fill with a single new tenant. This can lead to lower foot traffic for smaller shops nearby, potentially causing a "domino effect" where other retailers also decide to leave the mall.
Shareholders and investors are watching the company’s "First 50" stores closely to see if the turnaround is working. These 50 locations received extra investment in staff and displays to see if better service could drive higher sales. If these stores do not show growth, investors may lose confidence in the CEO’s ability to save the remaining business.
Small-format stores and luxury brands lead the new strategy
Macy’s Inc. is changing how it reaches customers by focusing on three specific areas to drive future revenue:
- Opening more small-format Macy’s stores in suburban shopping centers to reach customers where they live.
- Expanding the Bloomingdale’s luxury chain, which has shown more resilience to economic downturns than the main Macy’s brand.
- Growing the Bluemercury beauty brand by opening new locations and adding more high-end skincare products.
The company plans to open at least 30 of these smaller Macy’s locations through 2025 and 2026. These stores are roughly one-fifth the size of a traditional department store and carry a curated selection of popular items. This smaller size makes the stores cheaper to operate because they require fewer employees and less electricity.
Luxury sales at Bloomingdale’s have helped balance out the losses at the main Macy’s brand. Wealthier shoppers have continued to spend on designer handbags and shoes even as middle-income shoppers cut back on basic clothing. By leaning into luxury, Macy’s Inc. hopes to capture more spending from customers who are less affected by rising grocery prices or rent.
Economic uncertainty and execution risks for 2026
The forecast for flat performance in 2026 depends on the broader US economy remaining stable. If inflation stays high or if the job market weakens, consumers may spend even less on "discretionary" items like jewelry and home decor. Macy’s Inc. relies heavily on these non-essential purchases, making it vulnerable to any dip in consumer confidence.
There is also a risk that the store closure process could take longer or cost more than expected. Liquidating inventory and ending long-term leases can lead to unexpected legal and administrative fees. If the company cannot exit these leases quickly, it will continue to lose money on stores that are no longer bringing in enough customers.
Competition from off-price retailers like TJ Maxx and Ross Stores remains a constant threat to Macy’s. These stores offer similar brands at lower prices, attracting the "value-conscious" shopper that Macy’s is trying to keep. If Macy’s cannot prove that its shopping experience is better than these discount rivals, its sales may continue to slide despite the restructuring.
Final store closures and investment timelines
Macy’s Inc. is expected to close approximately 50 more stores by the end of the 2025 fiscal year. The remaining locations in the 150-store closure plan will shut down throughout 2026. This timeline is part of a multi-year effort to ensure the company only operates in the most profitable markets in the country.
The company has not yet released a full list of every store that will close in 2026, as negotiations with landlords are still ongoing. Management is expected to provide a more detailed update on the "First 50" store performance during the next quarterly earnings report in May 2025. This data will determine if the company increases its investment in store upgrades or continues to cut costs further.
Key Numbers and Facts
The confirmed figures behind this story at a glance.
Key Fact Detail Main person or organisation Tony Spring, CEO of Macy’s Inc. Main action or decision Issued flat sales forecast for FY2026 Date or period February 25, 2025 Location United States (National) Amount, figure, or scale 150 total store closures by 2026 Previous status Lower sales reported for FY2025 Current status Restructuring under "A Bold New Chapter" Primary effect Stagnant growth as company cuts costs Next confirmed step Closing 50 locations by end of 2025
The department store model is shrinking to survive
Macy’s Inc. is no longer trying to be the biggest retailer in America, but rather the most efficient one. The forecast for flat sales in 2026 proves that cutting costs and closing stores is a slow process that does not lead to immediate growth. By prioritizing its luxury brands and smaller store formats, the company is betting that a smaller, more focused version of Macy’s can remain relevant in a digital world. The success of this plan will depend on whether the remaining stores can offer a shopping experience that a website cannot replicate.
Frequently Asked Questions
Is Macy's closing all of its stores?
No, Macy’s is only closing 150 underperforming stores out of its total fleet. The company plans to keep about 350 of its most profitable Macy’s locations open while expanding its Bloomingdale’s and Bluemercury brands. These closures are expected to be finished by the end of 2026.
Why are Macy's sales falling?
Sales are falling because more people are shopping online or at discount stores instead of traditional malls. High inflation has also caused many middle-income shoppers to spend less money on clothing and home goods. Macy’s is closing its weakest stores to stop these losses from affecting the whole company.
What will happen to Macy's gift cards if my local store closes?
Macy’s gift cards remain valid at any open Macy’s or Bloomingdale’s location and on their official websites. Even if a specific store in your city closes, the company is still in business and will honor all existing gift cards and store credits. You can also use the Macy’s mobile app to shop using your balance.
