Macy’s cut its full-year profit guidance on Wednesday even as it beat Wall Street’s quarterly earnings expectations.
In a news release, the department store operator said it reduced its earnings outlook because of higher tariffs, more promotions and “some moderation” in discretionary spending. Macy’s stuck by its full-year sales forecast, however.
For fiscal 2025, Macy’s now expects adjusted earnings per share of $1.60 to $2, down from its previous forecast of $2.05 to $2.25. It reaffirmed its full-year sales guidance of between $21 billion and $21.4 billion, which would be a decline from $22.29 billion in the most recent full year.
Here’s how Macy’s did during its fiscal first quarter, compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:
- Earnings per share: 16 cents adjusted vs. 14 cents expected
- Revenue: $4.60 billion vs. $4.50 billion expected
In the three-month period that ended May 3, the company’s net income was $38 million, or 13 cents per share, compared with $62 million, or 22 cents per share, in the year-ago period. Sales dropped from $4.85 billion in the year-ago quarter. Excluding some one-time charges including restructuring charges, adjusted earnings per share were 16 cents.
Though the company cut its profit outlook, its shares climbed nearly 2% in premarket trading.
Economic uncertainty – including President Donald Trump’s on-again-off-again tariff announcements – has complicated Macy’s turnaround plans. The New York City-based legacy retailer is more than a year into a three-year effort to become a smaller, but healthier business. It’s shuttering weaker stores and investing in stronger parts of the company, including luxury department store Bloomingdale’s and beauty chain Bluemercury. It has also tried to improve the customer experience, including by speeding up online deliveries and adding staff to stores.
Macy’s plans to close about 150 underperforming namesake stores across the country by early 2027.
In the fiscal first quarter, Macy’s namesake brand remained its weakest. Comparable sales across Macy’s owned and licensed business, plus its online marketplace, declined 2.1% year over year.
When Macy’s took out the stores that it plans to shutter, however, trends looked slightly better. Comparable sales of its go-forward business, including its owned and licensed business and online marketplace, declined 1.9%
On the other hand, comparable sales at Bloomingdale’s rose 3.8% year over year, including its owned, licensed and marketplace businesses. Comparable sales at Bluemercury rose 1.5% year over year.
To try to turn its namesake stores around, Macy’s has invested in 50 locations – dubbed the “First 50” – with more staffing, sharper displays and changes to its mix of merchandise. It has expanded that initiative to 75 additional stores, bringing the total to 125 locations that have gotten increased attention. That’s a little over a third of the 350 namesake locations that Macy’s plans to keep open.
Those 125 locations performed better than the overall Macy’s brand. Comparable sales among those revamped stores owned and licensed by Macy’s were down 0.8% compared with the year-ago period.
Macy’s may provide more specifics on its tariff and pricing strategy on an earnings call, which is scheduled for 8 a.m. ET.
On Macy’s earnings call in March – before Trump made several sudden tariff moves that baffled companies and investors – CEO Tony Spring said the company’s guidance “assumes a certain level of uncertainty” about the economic outlook. He said even Macy’s affluent customer “is just as uncertain and as confused and concerned by what’s transpiring.”
Earlier this spring, Macy’s announced a few key leadership changes – including a new chief financial officer. Macy’s new CFO, Thomas Edwards, will begin on June 22. He previously served as the chief financial officer and chief operating officer of Capri Holdings, the parent company of Michael Kors. He will succeed Adrian Mitchell, who is leaving Macy’s.
As of Tuesday’s close, Macy’s shares are down about 29% so far this year. That trails the S&P 500’s nearly 1% gains during the same period. Macy’s stock closed on Tuesday at $12.04 per share, bringing the retailer’s market value to $3.35 billion.
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