Macy’s Inc. raised its annual outlook and reported its best comparable sales growth in three years, signaling that consumers are still spending despite concerns about inflation and tariffs.

Citing strength across the company, the retailer announced on Wednesday that it now expects net sales of up to €21.45 billion for the fiscal year, slightly above its previous guidance of €21.4 billion and exceeding analysts’ expectations.

“This is the beginning of a momentum change at Macy’s,” Chief Executive Officer Tony Spring told Bloomberg News. He noted that the back-to-school season is “off to a good start,” calling it a “good barometer” for the holiday season.

The stock rose as much as 22% in New York trading on Wednesday, marking the largest intraday gain since 2023. Shares of Macy’s had fallen 20% this year through Tuesday’s close.

The New York-based company, which owns Bloomingdale’s and Bluemercury in addition to its flagship Macy’s stores, also raised both the top and bottom ends of its profit guidance. It now expects comparable sales to decline by approximately 0.5% to 1.5% this year, a modest improvement from the 2% decline it projected in May.

Since taking the top role in 2024, Spring has focused on revitalizing Macy’s locations with the most growth potential by increasing staffing, enhancing marketing, and updating in-store displays. The company still plans to close about 150 underperforming stores by 2026.

Management highlighted strong demand in home furnishings, women’s and men’s apparel, fine jewelry, watches, and mattresses.

Bloomingdale’s recorded its fourth consecutive quarter of growth, with denim, beauty, and fragrances all performing well. Spring added that the retailer is exploring new brand partnerships and plans to open additional Bloomie’s small-format stores.

Prices up

Retailers across the board continue to report sales momentum among U.S. shoppers, despite rising prices and economic uncertainty.

Kohl’s Corp. shares surged after the company also raised its full-year forecast. TJX Cos., the parent of TJ Maxx, and Ross Stores Inc. similarly noted that consumers are still spending but are increasingly seeking lower-cost options.

Despite Macy’s raised outlook and solid second-quarter performance, the retailer warned of consumer caution in the months ahead. The company’s revenue has declined year over year for 13 consecutive quarters, underscoring ongoing pressure on its long-term growth trajectory.

Spring noted that shoppers are “being more surgical” in their purchasing decisions and warned that prices at Macy’s are expected to rise due to pending tariff increases.

“We’re going to have price increases. We’ve had some price increases,” Spring told analysts on a conference call. “It’s not a one-size-fits-all. So we’ve tried to be really thoughtful about what categories can bear the cost.”

For the three months ended Aug. 2, Macy’s reported better-than-expected results, highlighting strong performance from Bloomingdale’s, Bluemercury, and the 125 upgraded Macy’s locations. Both net sales and comparable sales beat analyst forecasts.

“These results suggest the company’s recent efforts to drive sales are bearing fruit,” said David Silverman, an analyst at Fitch Ratings. “The company will continue to face a choppy environment in the near future, with cost pressures from tariffs and a somewhat uncertain consumer.”