Macy's Advances Tech-Driven Growth With Digital & AI Investments

Macy’s Inc. M is accelerating its digital and AI initiatives as part of its broader transformation strategy, positioning technology at the core of its growth agenda. Digital now represents roughly one-third of total sales, underscoring its growing importance in driving customer engagement and revenues. The company has been modernizing macys.com with a more editorialized and intuitive interface, enabling easier navigation across categories and reinforcing its position as a fashion destination.

A key strength lies in Macy’s interconnected ecosystem, which links nearly 40 million customers annually across stores, digital channels, loyalty programs and credit card platforms. This structure provides visibility into more than 70% of transactions, allowing the company to better understand purchasing behavior and refine merchandising, pricing and promotional strategies with greater precision.

Artificial intelligence is playing an increasingly important role in enabling these capabilities. Management highlighted more than 35 AI use cases across the organization, all aimed at improving how customers shop and how employees serve them. These initiatives are not limited to a single function but are being applied broadly to enhance decision-making and operational execution.

AI is being applied across key operational areas, including supply chain, merchandising, marketing and call centers, as well as customer-facing and omnichannel functions. These efforts are part of broader end-to-end initiatives that have already contributed to improvements such as faster delivery times and enhanced service capabilities, demonstrating tangible benefits from technology investments.

Macy’s plans to expand AI deployment across the enterprise while continuing to strengthen its digital ecosystem. The company emphasized opportunities to leverage AI in combination with its data science and technology capabilities, particularly across customer engagement, operational efficiency and integrated omnichannel experiences, as it continues executing its transformation strategy.

Macy’s Price Performance, Valuation & Estimates

Shares of the company have surged 92.6% in the past year compared with the industry’s 96.9% growth.

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From a valuation standpoint, Macy’s is trading at a forward 12-month price-to-sales ratio of 0.24X, down from the industry average of 0.45X. M has a Value Score of A.

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The Zacks Consensus Estimate for Macy’s fiscal 2026 earnings implies a year-over-year decline of 9.1%, whereas the same for fiscal 2027 indicates an uptick of 6.3%. Estimates for fiscal 2026 and 2027 have been revised upward by 2 cents and 11 cents, respectively, in the past 30 days.

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Macy’s currently has a Zacks Rank #3 (Hold).

Key Picks

We have highlighted three better-ranked stocks in the retail space, namely FIGS Inc. FIGS, Tapestry, Inc. TPR and Deckers Outdoor Corporation DECK.

FIGS is a direct-to-consumer healthcare apparel and lifestyle brand, and it currently sports a Zacks Rank of 1 (Strong Buy). The company delivered a trailing four-quarter earnings surprise of 187.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for FIGS’ current financial-year sales and earnings indicates growth of 11.8% and 26.3%, respectively, from the year-ago reported numbers.

Tapestry, which was formerly known as Coach, Inc., is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. It currently has a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for Tapestry’s current fiscal-year earnings and sales implies growth of 26.5% and 11.2%, respectively, from the year-ago actuals. TPR delivered a trailing four-quarter average earnings surprise of 12.8%.

Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It has a Zacks Rank #2 at present. 

The Zacks Consensus Estimate for Deckers’ current fiscal-year earnings and sales indicates growth of 8.5% and 8.9%, respectively, from the year-ago actuals. DECK delivered a trailing four-quarter average earnings surprise of 36.9%.

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This article originally published on Zacks Investment Research (zacks.com).

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