Macy’s lowers profit forecast amid tariff pressures
Macy's has revised its annual profit forecast downward, citing the impact of U.S. tariffs on its earnings. CEO Tony Spring announced that the retailer would implement selective price increases on certain products to mitigate the margin hit from tariffs while also reducing prices on its spring collection to manage inventory effectively. The company faces intensified competition from off-price and big-box retailers, particularly as inflation is expected to rise due to the tariffs imposed by the Trump administration.
Despite the lowered profit outlook, Macy's reported first-quarter sales of $4.6 billion, exceeding analyst expectations of $4.42 billion, although this reflects a 5.1% decline from the previous year. Net profit fell to $38 million from $62 million a year earlier, with adjusted earnings per share at 16 cents, surpassing forecasts. Analysts at Citi noted that Macy's decision to maintain its financial guidance, unlike other retailers, is a positive sign.
Macy's has adjusted its 2025 profit forecast, now expecting adjusted earnings per share between $1.60 and $2.00, down from a previous estimate of $2.05 to $2.25, attributing 15 to 40 cents of this reduction to tariffs. To address these challenges, the retailer is renegotiating vendor contracts, reducing reliance on Chinese imports, and canceling or delaying orders that are no longer viable under the new tariff regime.
Despite these hurdles, Macy's has maintained its full-year sales forecast between $21.0 billion and $21.4 billion, focusing on its upscale brands, Bloomingdale's and Bluemercury, which continue to show positive sales growth. As of the latest trading session, Macy's stock was priced at $12.00, reflecting a slight decrease of 0.42%.
