Macy's, Inc. (NYSE:M) lowered its full-year profit forecast on Wednesday, citing pressure from higher tariffs and cautious consumer spending, even as it reported stronger-than-expected first-quarter results.
The department store chain now expects fiscal 2025 earnings of $1.60 to $2 per share, down from a prior range of $2.05 to $2.25. Revenue guidance was maintained at $21 billion to $21.4 billion.
“Our Q1 25 results give us confidence that we have the right strategy and team in place to navigate the current environment,” said CEO Tony Spring. But the CEO noted tariffs and a more cautious consumer are weighing on the full-year outlook.
First-quarter adjusted earnings came in at $0.16 per share, topping expectations of $0.14. Sales rose to $4.6 billion from $4.4 billion a year earlier, beating the $4.42 billion estimate. Same-store sales fell 2% on an owned basis, better than the expected 3.9% decline.
Jefferies analysts, who rate the stock “Buy” with a $17 price target, said the quarter beat expectations, but warned that lower guidance reflects “tariffs, consumer pressure outcomes, and a more promotional landscape.”
Macy’s said tariffs are expected to reduce gross margin by 20 to 40 basis points and earnings by $0.10 to $0.25 per share.
Jefferies said it is watching for details on promotional trends, tariff mitigation, and the company’s strategic initiatives as Macy’s looks to stabilize sales and improve margins amid an uncertain retail backdrop.
Shares of Macy’s were up around 1.5% on Wednesday morning.