The long awaited department store renaissance may finally be here. After years of falling sales and store closings, Macy’s and Kohl’s now lead a potential turnaround for the struggling industry, suggesting that brick and mortar retailers still have miles in a world dominated by e commerce.
Macy’s stock leaped more than 20% in the past few days following its strongest comparable store sales growth in 12 quarters, a dramatic reversal of fortunes that again sparked investor optimism. What was the catalyst? Dazzling sales at Bloomingdale’s and Bluemercury, with positive momentum at its revamped “Reimagine” stores Axios Investopedia.
In the second quarter of 2025, Macy’s posted adjusted per share earnings of $0.41, more than twice analyst expectations, as net sales declined 2% from last year to approximately $4.8 billion, topping expectations. Comparable store sales rose 0.8% on an owned basis and 1.9% on an owned plus licensed and marketplace channels basis, its highest in over three years since 2022 Investors.
Bloomingdale’s posted comparable sales increases of 3.6%, its fourth consecutive quarter of growth. Bluemercury recorded 1.2% comparable sales growth, extending an 18 quarter run of positive traction. Macy’s “Reimagine 125” stores recorded 1.1% comparable sales growth New York Post macysinc.com Fast Company.
The company also lowered selling, general, and administrative expenses by $29 million. Its increased confidence is evident in the raised full year outlook, projecting adjusted EPS of $1.70–$2.05 and net sales of $21.15–$21.45 billion Investors Investopedia New York Post.
CEO Tony Spring attributed gains to Macy’s diversified omni channel strategy. He said, “The strengths of being a multi brand, multi category, omni channel retailer” are clear, combining in store makeovers, strong brand positioning, and selective cost discipline Axios macysinc.com Investopedia.
Kohl’s, after 14 straight quarters of comp sales erosion, is conducting its own department store turnaround. Its shares jumped nearly 39% in the past month as investors buy into its Q2 beats and aggressive turnaround efforts Investors.
Financials confirm the optimism. Net sales dropped 5.1% to $3.3 billion and comparable sales fell 4.2%, but Kohl’s managed to step gross margins up 28 basis points, reduce inventory and SG&A expenses, and accelerate net income and operating performance against expectations Fortune investors.kohls.com PYMNTS.com.
Digital is holding up its end, with digital channels contributing significantly to the recovery. Kohl’s app now has 20 million customers and 28% digital penetration of sales, with proprietary brands and promotions, including more coupon eligible items, driving conversions PYMNTS.com.
Fast Company notes that Kohl’s also benefited from closing unprofitable physical stores, streamlining its cost structure, and leaning on beauty through Sephora at Kohl’s and value driven platforms to reignite customer interest Axios Fast Company PYMNTS.com.
Analyst Oliver Chen of TD Cowen foresees a potential return to growth as early as next year, a relief after its long slump Axios.
Macy’s is doubling down on its “Reimagine” remodels and focusing on profitable units like Bloomingdale’s and Bluemercury. Kohl’s is reducing its physical footprint while enhancing omnichannel convenience and beauty partnerships. A superior in store experience is paying off. Macy’s improved formats and curated products are enticing shoppers. Kohl’s boost from Sephora and private brands is drawing bargain hunting consumers to return. Both companies improved their cost structures. Macy’s reduced SG&A expenses, and Kohl’s cut inventory and overhead. Both raised full year guidance, signaling renewed confidence. Kohl’s digital approach, including app usage, coupons, and transparency, resonates with budget conscious shoppers. Macy’s omnichannel alignment helped offset brick and mortar challenges.
This department store renaissance matters for several reasons. In the era of Amazon and fast fashion, traditional department stores still offer curated experiences and status brands. Store closings and renovations show smarter use of space, staying relevant in changing shopping habits. For value conscious shoppers, these stores provide comfort and affordability with promotions, loyalty rewards, and the chance to see and touch products. Restoring traditional retail can also indicate shifts in the economy and sentiment, offering a counterbalance to the dominance of e commerce.
Takeaways to watch: Macy’s is being propelled by omni channel brands and Reimagine stores driving comparable sales growth. Investors will be watching to see if holiday season momentum holds. Kohl’s digital initiatives and beauty strategy are driving its turnaround, but the question is whether comp sales return to normal once headwinds ease. Overall, the sector rebound indicates resilience, but issues remain. Observers should track consumer confidence, tariff impact, and execution consistency.