Macy's has cut back its profit forecast for the year, citing the impact of tariffs and worries about consumer spending, amid its turnaround plan to close another roughly 90 stores.
The New York-based retailer — parent of not only its namesake department store chain but also Bloomingdale's and BlueMercury — updated its guidance when it reported its first-quarter results Wednesday. It is now expecting earnings per share of $1.60 to $2, down from $2.05 to $2.25.
"Given uncertainty regarding the tariff impact on consumer health and demand, we believe it’s prudent to incorporate a more choiceful consumer into our outlook for the quarter and for the remainder of the year," Macy's Chairman and CEO Tony Spring told Wall Street analysts.
Company officials said that Macy's is taking a variety of steps — sourcing fewer goods from China, negotiating with suppliers, getting some vendor discounts, canceling orders and absorbing some increases — to offset the impact of President Donald Trump's new fees on imported goods.
But in some cases, Macy's will be forced to raise prices, according to outgoing Chief Financial Officer Adrian Mitchell.
"So we’re making selective price increase in selective brands, selective categories, because we believe the value equation for the customer is still very relevant," he said.
Downsizing continues
Macy's is in the process of trying to revive sales for its core chain, a plan that includes downsizing its store fleet and supply chain and reinvigorating the remainder of its brick-and-mortar footprint. As part of that turnaround effort, last year Macy's closed 64 of the roughly 150 stores it plans to shutter by 2027, according to Spring. That leaves 86 more to go.
The retailer has been selling some of that real estate, and in the first quarter it registered $16 million in asset-sale gains as it continued to monetize store locations and "rightsize" its supply chain network, Mitchell said. So far 125 "reimagined" stores have been improved with new product assortments and more staff, and that batch has been outperforming the rest of Macy's fleet, according to the company.
In the first quarter, Macy's net sales were $4.6 billion, down 5.1% to compared with the prior-year period. Those results reflect the effects of fiscal 2024 store closures, primarily Macy’s nameplate locations, which contributed about $170 million in the first quarter of 2024, Mitchell said. For all of 2025, the retailer projected net sales of $21 billion to $21.4 billion. In fiscal 2024, closed stores had contributed around $700 million to net sales, according to Mitchell.
"This is not a terrible set of numbers from Macy’s, especially as the overall sales decline of 5.1% includes the ongoing closure of stores," Neil Saunders, a retail analyst and managing director of analytics firm GlobalData, said Wednesday in a note.
Upscale is up
Comparable sales at Macy's luxury chains, Bloomingdale's and BlueMercury, rose while they slipped down at the flagship banner.
"Despite the more challenging economy ahead, Macy’s outlook is not too bad, with overall comparables penciled in for minus-2% at worst," Saunders said. "Go-forward stores could, at best, be flat. While this means that Macy’s won’t grow, it also means it will be far from being at the bottom of the retail league table."
Macy's declined to comment on Saunders' remarks.
In the second quarter, Macy's plans to take "markdowns on early spring product that arrived late in the fourth quarter and in February," cutting into its margins but providing other benefits, according to Spring.
"This will ensure we continue to provide newness throughout the summer and are well positioned for the fall and holiday season," he said.