Macy’s on Wednesday beat Wall Street’s sales expectations for the third quarter in a row and posted its strongest growth in more than three years as the company’s turnaround strategy showed signs of momentum.

The department store operator raised its full-year sales and earnings outlook after its better-than-expected fiscal third quarter. The retailer now expects adjusted earnings per share of between $2 and $2.20, up from its previous expectation of $1.70 to $2.05, and net sales of $21.48 billion to $21.63 billion, compared with its prior outlook of $21.15 billion and $21.45 billion.

Macy’s said it expects flat to roughly 0.5% comparable sales growth from the previous year. That compares with its previous expectations for a year-over-year decline of between 0.5% and 1.5%. The industry metric takes out one-time dynamics like store openings and closures, and Macy’s includes merchandise that it owns, items for brands that pay for space within its stores and its third-party online marketplace.

It marked the second consecutive quarter Macy’s raised its full-year sales and earnings outlook. The company had cut its full-year earnings outlook in May because of higher tariffs, more promotions and “some moderation” in discretionary spending. 

Even so, the projected annual sales would represent a drop from year-ago net sales of $22.29 billion. Macy’s said about $700 million of that annual net sales decrease is due to the 64 stores it shuttered at the end of the last fiscal year, which ended Feb. 1, and in the early part of this fiscal year. 

And Macy’s said in its news release that its outlook anticipates two challenging dynamics – selective spending by consumers and higher tariffs – will persist in the holiday quarter.

The company’s shares dropped nearly 5% in premarket trading Wednesday.

In an interview with CNBC, CEO Tony Spring said the company is taking a “prudent view” of the fourth quarter because it faces tough year-over-year comparisons and because it’s not sure how “aspirational customers,” those who like to shop at its stores but are more financially pressured, may spend during the season.

“We’re pleased with the fourth quarter to date, but we have a big holiday in front of us,” he said. 

Spring said Macy’s department store model is an advantage during the gift-giving season because it offers a wide variety of merchandise and a range of prices, from off-price to luxury.

Here’s how the department store operator did during its fiscal third quarter compared with what Wall Street expected, based on a survey of analysts by LSEG:

• Earnings per share: 9 cents adjusted vs. an expected loss of 14 cents 
• Revenue: $4.71 billion vs. $4.62 billion expected

Macy’s is trying to put up better and more consistent sales, particularly for its namesake brand. Macy’s department stores account for the majority of the New York City-based legacy retailer’s business, but their performance has lagged behind the company’s higher-end department store, Bloomingdale’s, and beauty chain, Bluemercury. To try to reverse that trend, the retailer has stepped up investments in staffing, sharper merchandise and eye-catching displays at Macy’s stores. It first rolled out that strategy at 50 locations, which were dubbed the “First 50,” and has since expanded that approach to a total of 125 Macy’s locations. That’s more than a third of the 350 namesake stores that Macy’s plans to keep open.

Along with the added investment, it has shuttered lower-performing Macy’s locations. It announced in early 2024 that it would permanently close about 150 of its namesake stores by early 2027, while planning to add locations for Bloomingdale’s and Bluemercury. 

The company hasn’t yet said how many additional stores it may close this fiscal year. 

In the three-month period that ended Nov. 1, Macy’s net income fell to $11 million, or 4 cents per share, compared with $28 million, or 10 cents per share, in the year-ago period. Adjusting for some one-time items, including gains on the sale of real estate, it reported earnings per share of 9 cents.

Revenue decreased from $4.74 billion in the year-ago quarter.

In the fiscal third quarter, companywide comparable sales rose 3.2% including owned and licensed merchandise and its third-party marketplace. When the company excluded stores that won’t be part of its go-forward business, that growth was 3.4%.

Bloomingdale’s posted the strongest performance of the company’s brands, with comparable sales jumping 9% year over year on an owned-plus-licensed basis, including its third-party marketplace. And Bluemercury’s comparable sales increased 1.1%.

Spring attributed the company’s better performance to shoppers responding to changes that Macy’s has made to its legacy department stores – such as additional staff ready to help and newer brands like high-end home goods company MacKenzie-Childs.

He said he visited Macy’s stores, and those of its competitors, on Black Friday and was pleased by what he saw.

“I like the way we’re showing up,” Spring said. “We look crisp. We look clean. We look interesting, compelling, inspiring, easy to shop.”

The snap to cooler weather helped, too, he said. As temperatures dropped in October, shoppers bought items including cashmere sweaters, outerwear and boots.

For the holiday season, Spring said he expects promotions to be at similar levels to the year-ago period at Macy’s stores and website, along with those of its competitors.

Higher tariffs, however, will mean higher prices for some items. Macy’s has worked with vendors and manufacturers to blunt the impact of the duties, and the hit to margins in the third quarter came in lower than the company expected, he said.

Still, Spring said Macy’s has made “selective” price increases in almost every category, with some items costing more because of improved quality or an added embellishment and some simply due to higher import costs.

As of Tuesday’s close, Macy’s shares have risen about 34% so far this year. That outpaces the S&P 500’s 16% gains during the same period. Macy’s stock closed Tuesday at $22.71, bringing the company’s market cap to about $6.10 billion.

Self-storage company Big Yellow has warned its annual business rates bill will jump by £1.8 million next year following measures announced in the Budget.

The business said it will be affected by an upcoming tax shake-up, which will see properties worth more than £500,000 taxed at higher rates.

Big Yellow said 27 of its stores will be affected by the change.

It told investors that it was expecting its annual rates bill for the next tax year, beginning in April 2026, to be almost £23 million, up by £1.8 million from its current bill.

The firm said it was appealing the rateable values of some of its stores.

Big Yellow operates self-storage units from 111 locations in England, Scotland and Wales.

In last week’s autumn Budget, Chancellor Rachel Reeves confirmed that a new business rates system will be introduced from the next financial year.

This will see rates multipliers lowered for retail, hospitality and leisure firms – funded by higher rates on larger commercial properties, including warehouses.It also means that firms with larger premises, like storage companies and supermarkets, will be hit with a property tax rise.

The Treasury said the move was designed to “rebalance the business rates system” and help smaller firms by putting more of the tax burden onto bigger operators.

Big Yellow has been the subject of a takeover approach from investment firm Blackstone, which confirmed in October that it was considering making an offer.

But it said one of its considerations was the potential impact of the UK Budget on the self-storage sector.

Blackstone is thought to be contemplating abandoning a potential bid for Big Yellow ahead of a December 8 deadline to make a formal offer, Sky News reported on Tuesday.

Shares in Big Yellow fell on Tuesday and were down by about 1% on Wednesday morning.

Troubled utility giant Thames Water remains embroiled in discussions regarding a crucial rescue package with its creditors, even as it reports a surge in revenues alongside a rise in customer complaints stemming from increased bills.

Thames Water said it said it cut pollution spills by a fifth, as profits reached £414m for the six months to September – having raised fees substantially – by almost a third (31 per cent) earlier this year.

The group said customer complaints surged by three-quarters to 55,158 in the half-year, as revenues hit close to £2bn for the period.

Despite the return to profit there remain concerns over the ongoing viability of the firm which has around a £17.5bn debt load.

In addition, the most recent financial filing revealed Thames Water had paid £57m across six months in fees towards advisers on the rescue process, including bankers, lawyers and PR consultants.

The heavily indebted company, which serves approximately 16 million customers across Britain, described ongoing negotiations as “positive” but confirmed they are still underway with both the Government and regulators. The aim is to finalise a deal that will stabilise the firm and address its precarious financial state.

Thames Water is currently engaging with a consortium of its primary creditors, London & Valley Water, whose proposal includes injecting capital and writing off debt in exchange for more flexible performance targets.

But Thames Water warned there was still a “material uncertainty” over whether the deal would be secured.

It said: “Since the proposal was made, positive discussions are ongoing between the consortium, the regulators and Government, albeit there remain a number of items to be negotiated and agreed before a recapitalisation can proceed.”

The group is hoping to secure the deal to stave off temporary nationalisation after being left on the brink of collapse by nearly £20 billion of debt.

Its creditors – which include institutional investors such as Aberdeen, Elliott Management and Silverpoint Capital – is seen as the final realistic option on the table to avoid being placed into the Government’s special administration regime after a previous rescue deal with US private equity giant KKR collapsed in May.

Chris Weston, chief executive of Thames Water, said: “We continue to work closely with stakeholders to secure a market-led solution that we believe is in the best interests of our customers and the environment.

“This in turn will allow the transformation of Thames to continue, a programme that will take at least a decade to complete and will restore the infrastructure and operations of the company.”

Half-year results from the provider revealed underlying earnings surged to £1.2 billion for the six months to September 30, compared with £715.1 million a year ago.

Revenues rose by 42% thanks to the bill increases, which it said also helped fund £1.3 billion of capital invested to fix leaks, cut sewage spills and improve water quality.