Macy’s (M) is joining a growing list of major retailers issuing weak outlooks as it braces for the impact of Trump tariffs and weary consumers.
The department store chain reported Thursday that fourth quarter adjusted earnings per share came in at $1.80, beating analysts estimates of $1.54. But same-store sales grew only 0.2% and missed the Street’s estimate of 1.23%.
Investors are laser-focused on guidance as policy concerns loom. This week, the Trump administration imposed a 25% tariff on Mexico and Canada after a 30-day pause and added a second round of 10% tariffs on Chinese goods.
CEO Tony Spring said on the company’s earnings call that Macy’s is “taking a prudent approach to our outlook reflecting the external uncertainties that both we and the consumer are facing.”
“There’s a lot of changes that we’re seeing day-to-day happening with tariffs. We recognize the inflationary pressure,” CFO Adrian Mitchell told investors. “There were some unexpected factors in the early part of the quarter with the fires and cold weather that impacted results for the business.”
He added that Macy’s is “working very closely” with partners for “known and unknown variables and really trying to get visibility to opportunities as they emerge.”
For 2025, Macy’s projects revenue of $21 billion to $21.4 billion, below 2024’s $22.29 billion and missing estimates of $21.66 billion.
Same-store sales are expected to decrease between 0.5% to 2% year over year, compared to the 0.71% increase that Wall Street anticipated.
Adjusted earnings per share of $2.05 to $2.25 also came in under consensus estimates of $2.31 and were lower than the $2.64 it clocked last year.
Macy’s stock is down roughly 1.5% in morning Thursday trading.
As of 10:18:50 AM EST. Market Open.
This week, shares of Best Buy (BBY), Target (TGT), and Abercrombie & Fitch (ANF) all plunged after the companies issued soft guidances.
Citi analyst Paul Lejuez wrote in a client note that while private-label brands only make up 15% of Macy’s sales, “tariffs affecting national brands” like Nike (NKE), Steve Madden (SHOO), and Adidas (ADDYY) could impact its costs and pricing.
“Management has indicated in the past that its consumer is focused on value, and it will be interesting to hear management’s view of whether they would try to pass higher costs through to consumers,” Lejuez wrote.
Morningstar analyst David Swartz called tariffs “another problem that Macy’s has to deal with, on top of all the other problems that Macy’s has to deal with.”
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2025-03-06 09:01:47
