Macy’s on Wednesday slashed its annual profit forecast and warned of incoming price hikes to offset President Trump’s hefty tariffs.
The legacy department store chain now expects adjusted earnings per share of $1.60 to $2 in 2025 — down from its previous forecast of $2.05 to $2.25.
Macy’s CEO Tony Spring told CNBC about 15 cents to 40 cents per share of that forecast drop is due to the tariffs.
The company also nodded to challenges from a slowdown in consumer spending and more competitive promotions and discounts across the retail industry.
“(Higher) pricing is working its way into the system slowly,” Spring said during a post-earnings call.
“That’s why we have taken a more cautious approach to our outlook for the year.”
He told CNBC the retailer will be “surgical” about its pricing strategy, raising only certain items and leaving others the same price as they were a year ago.
Macy’s reaffirmed its annual sales forecast of $21 billion to $21.4 billion, which would be a decline from last year’s $22.29 billion.
It also reported earnings and revenue slightly above expectations for the three months ended May 3.
Adjusted earnings per share were 16 cents, beating projections of 14 cents, and revenue came in at $4.6 billion, above expectations of $4.5 billion.
Reported revenue was still a far drop from the $4.85 billion seen in the same quarter last year.
Shares in Macy’s jumped 3.4% premarket on Wednesday.
The retailer is about a year through Spring’s three-year turnaround plan, which is focused on closing weaker stores – with plans to close 150 Macy’s locations by early 2027 – and boosting the company’s Bluemercury and Bloomingdale’s businesses.
Macy’s so far has invested in more staffing, improved displays and a new mix of merchandise at 125 locations, or about a third of the namesake stores that the company plans to keep open.
Comparable sales at these locations fell 0.8% compared to the same period last year – better than the 2.1% drop across the overall Macy’s business.
“The remodeled Macy’s stores are performing better. But this company isn’t reporting consistently positive comparable sales so there’s still a lot of work to do,” said Morningstar analyst David Swartz.
Comparable sales at Macy’s stores excluding the locations that are expected to shutter fared better, at a 1.9% decline.
Same-store sales at Bloomingdale’s, which sells high-end clothing, and Bluemercury, a luxury skincare and beauty retailer, jumped 3.8% and 1.5%, respectively, compared to the year before.
That’s not an unusual trend for Macy’s, which has seen net sales fall for 12 straight quarters at its namesake stores while Bluemercury has reported four years of positive sales.
Macy’s shares are down about 27% so far this year.
Several other retailers have cut or suspended their annual guidance as they face heightened uncertainty amid trade war tensions.
Dick’s Sporting Goods, however, stood by its full-year forecast on Wednesday despite looming tariff-related pressures.
It reaffirmed its annual earnings per share forecast between $13.80 and $14.40, in line with the $14.29 expected by analysts.
The popular sporting goods retailer is projecting revenue between $13.6 billion and $13.9 billion, which is also in line with expectations of $13.9 billion.
“We are reaffirming our 2025 outlook, which reflects our strong start to the year and confidence in our strategies and operational strength while still acknowledging the dynamic macroeconomic environment,” CEO Lauren Hobart said in a press release.
In the first quarter, the company reported adjusted earnings per share of $3.37 and revenue of $3.17 billion, beating expectations of $3.13 billion.
This story originally appeared on NYPost
