Retail isn’t dead. It’s just getting a makeover.

If you’ve steered clear of Macy’s messy racks and labyrinthine layout lately, you’re in for a surprise: The department store just posted better-than-expected Q1 results and raised its full-year guidance.

Comparable store sales grew 3%, the best first quarter in four years, and the company now expects 2026 revenue to reach $21.5 billion to $21.75 billion, beating expectations. Credit the turnaround to Macy’s “Reimagined” initiative, a makeover of 200 stores with elevated design and locally curated merchandise. Sister chain Bloomingdale’s did even better, with comparable sales up 10.2%—delivering its highest Q1 sales volume on record—thanks to clever collaborations with buzzy brands like Khaite and Cult Gaia. (Rival Saks’s bankruptcy didn’t hurt either.)

Sleepy department stores aren’t the only corner of retail waking up. Walmart—which has sat at the top of the Fortune 500 for 13 years—was just dethroned by Amazon. The online giant’s revenue in 2025 grew 12% year over year to $717 billion, narrowly pulling ahead of Walmart’s $713 billion, earning it the top spot.

Walmart should also be worried about arch nemesis Target, which reported a 5.6% jump in comparable store sales in Q1, three times what analysts were anticipating. The bullseye also raised its full-year guidance, buoyed by bumper sales of its mystery boxes, new beverages like mushroom coffee, and Q2 plans to unveil department-style beauty studios in 600 stores.

On the losing end of the mall, Gap missed its Q1 revenue expectations, blaming its own clothes (specifically its Old Navy dresses). And shares in American Eagle slid after comparable sales for the company’s flagship brand slid 2%—Sydney Sweeney ad campaign and all.

What it takes to survive in retail today

What Macy’s, Target, and Amazon have in common: None are peddling the same mom jeans and jorts they were a few years ago. Macy’s and Target are clawing out of the dead-mall grave by overhauling their stores, while Amazon outgrew its online book purveyor roots long ago, and has since sprawled into every corner of consumer life.

The lesson Amazon just taught Walmart: Even a 13-year reign as number one isn’t safe when faster-evolving rivals are rising up the ranks.

But reinvention only goes so far when it’s up against the economy. Rising prices have pushed consumer sentiment to a new record low, which helps explain why Dollar General and Dollar Tree are doing just fine. For everyone else, getting shoppers to open their wallets when they feel broke is going to take more than a sales rack. –JD