(Reuters) -Macy’s cut its annual profit forecast on Wednesday as the top U.S. department store operator navigates tariff-led uncertainty and cautious spending on apparel and accessories.
The company expects 2025 adjusted profit per share to be between $1.60 and $2.00, compared with its prior target of between $2.05 and $2.25. Analysts were expecting annual adjusted profit of $1.93 per share, according to data compiled by LSEG.
Several companies have withdrawn or lowered their revenue and profit targets for the year, and retailers, in particular, have been bracing for a significant impact on their supply chain costs, as well as on demand due to President Donald Trump’s sweeping duties.
Macy’s is also bracing for more competition from discount stores and big-box retailers as shoppers seek cheaper non-essential products amid a jump in inflation expectations following the tariffs.
CEO Tony Spring has sharpened the focus on Bluemercury, which sells beauty and skincare products, and Bloomingdale’s, which sells luxury apparel and accessories, as off-price rivals put the squeeze on the company’s namesake banner.
That helped Macy’s beat estimates for first-quarter net revenue, and maintain its annual net sales forecast of $21.0 billion to $21.4 billion.
Net sales at Macy’s have fallen for 12 straight quarters, compared with four years of positive sales at Bluemercury.
The company is also investing in improving its online product assortment, refreshing its loyalty program, and maintaining a tight control on costs.
Net sales for the three months ended May 3 were $4.6 billion, topping expectations of $4.5 billion, while gross margin rate was flat at 39.2%, after having declined for the past two quarters.
Macy’s shares have fallen about 28% so far this year as of last close.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Sriraj Kalluvila)
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