Macy's and Vince both raise full-year outlook after strong second quarter

Macy's Inc. and Vince both raised full-year guidance this week after second-quarter results that beat their own expectations, with tariff refunds adding an unusual lift to both companies' margins. Macy's posted net sales of $4.9 billion for the quarter ended 1 August, up 1.1% year on year, while comparable sales rose 2.7%.

Net income at Macy's climbed to $169 million from $87 million a year earlier, and adjusted earnings before interest, taxes, depreciation and amortisation rose to $457 million from $373 million. The retailer has now delivered five consecutive quarters of comparable sales growth across the group and at the namesake Macy's brand.

By division, Macy's brand comparable sales rose 1.1%, with the Reimagine 200 stores, those given extra staffing and fresher product, up 1.9%. Bloomingdale's comparable sales jumped 11.3% to their highest second-quarter sales volume in the brand's history, and Bluemercury's comparable sales rose 6.2%.

Chairman and chief executive Tony Spring credited the gains to the company's Bold New Chapter strategy, introduced in February 2024, which has closed about 150 underperforming Macy's stores while expanding luxury, Bloomies and Bluemercury locations. He called the quarter part of a durable foundation for profitable growth.

Macy's has now received all of its expected tariff refunds: $98 million in the second quarter and a further $18 million after quarter-end, totalling $116 million. About $20 million will flow to full-year earnings per share, while the remaining $96 million is being reinvested in the Bold New Chapter strategy this year.

What Macy's raised its guidance to

Full-year net sales are now seen at $21.68 billion to $21.83 billion, up from $21.5 billion to $21.75 billion previously. Comparable sales guidance rose to 1% to 1.5% from 0.5% to 1.2%, and adjusted diluted earnings per share are now seen at $2.15 to $2.35, up from $2 to $2.20.

eMarketer vice president Suzy Davidkhanian said Macy's delivered a strong quarter with positive growth across all three nameplates while raising its outlook, adding that the namesake banner remains a work in progress even as momentum builds beyond Bloomingdale's and Bluemercury.

Vince's second quarter and the OVO deal

Vince, the smaller of the two, reported net sales up 11.7% to $81.8 million for the three months ended 1 August, from $73.2 million a year earlier. Direct-to-consumer sales rose 13.7% and wholesale rose 10.4%, and chief executive Brendan Hoffman said luxury customers are trading down into the brand.

Income from operations rose to $13.6 million from $11.2 million, while adjusted income from operations, including the tariff benefit, climbed to $16.4 million from $5.5 million. Gross profit reached $49.8 million, or 60.9% of net sales, up from 50.4% a year earlier, a gain that included a $10.4 million tariff refund.

Excluding that refund, Vince's gross margin rate was 48.2%, which the company said was in line with its own expectations. Net income fell slightly to $10.6 million, or 80 cents per diluted share, from $12.1 million, or 93 cents, a year earlier, even as sales and operating income both climbed.

Hoffman said Vince has raised its sales and earnings-per-share outlook for the year, and that the tariff impact lifted guidance considerably even though the company had already planned to raise it. He pointed to price increases on leather and outerwear that customers have absorbed without resistance.

Top sellers in the quarter included the Niki mid-rise flare pant and a funnel-neck jacket in women's, and short-sleeve polos and a shirt jacket in men's, with growth driven by full-price sales in woven tops, lightweight outerwear and seasonal knits. Vince currently operates 53 doors.

Vince is also expanding beyond its own name. Last month Authentic Brands Group acquired a 51% stake in October's Very Own, the Drake-cofounded lifestyle label, with Drake retaining 44% and Vince holding the remaining 5% while becoming OVO's core apparel and retail licensee worldwide.

Hoffman said Vince plans to open three OVO stores in the United States over the next twelve months and is negotiating a US wholesale partner for the brand, which does not currently wholesale domestically. OVO generated about $50 million in sales last year, a figure Hoffman predicted would exceed $100 million by 2030.

He also said Vince could open five or six of its own stores in Canada, where it currently has none, now that the OVO deal has given it a Canadian entity. Asked about further acquisitions, Hoffman said the priority is completing the OVO integration before Vince becomes a multibrand platform.

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