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 initially sank in premarket trading but later reversed the losses.
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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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As of Wednesday’s close, Macy’s stock has dropped 20% year to date and 34% in the past 12 months. The S&P 500 (^GSPC) is hovering around the flat line for 2025 and has gained 15% in the past year.
Here’s what Macy’s shared in its fourth quarter results, versus Bloomberg consensus estimates:
Net sales: $7.77 billion, versus $7.76 billion
Adjusted earnings per share: $1.80, versus $1.54
Same-store sales growth: 0.2%, versus 1.23%
Here’s what Macy’s shared in its fiscal full-year results, versus Bloomberg consensus estimates:
Net sales: $22.29 billion, versus $22.39 billion
Adjusted earnings per share: $2.64, versus $2.37
Same-store sales growth: -0.9%, versus -1.01%
Last July, Macy’s announced it ended talks with Arkhouse Management and Brigade Capital Management, which had put forth an offer to take it private at $24.80 per share. The stock ended Wednesday at $13.31.
Investors will scrutinize its decision to bet on its turnaround strategy, dubbed a Bold New Chapter. The plan calls for closing 150 underperforming stores in the near term while putting some of the savings toward existing locations and digital experiences.
In the fourth quarter, same-store sales jumped 1.2% in the first 50 stores where it invested in more marketing and staff. As part of this plan, it plans to close 66 unprofitable stores this year.
A Macy’s department store at the Westfield UTC shopping center on Jan. 31, 2025, in San Diego, California. (Kevin Carter/Getty Images) ·Kevin Carter via Getty Images
«Investments in the customer experience enabled us to achieve our highest comparable sales of the year [and] our best performance in 11 quarters,» Spring said in the release. He added in the call that consumer health is «under pressure,» as they are «navigating food prices and the cost of housing and the stubborn inflation rate.»
In December, Barington Capital Group and Thor Equities piled on the pressure for Macy’s to improve shareholder value.
The activist shareholders said shares «do not reflect the upside potential on a reinvigoration in the Macy’s nameplate.» They also argued the retailer can do more with Bluemercury, Bloomingdale’s, and its real estate, which they valued at $5 billion to $9 billion.
For the fourth quarter, same-store sales at luxury chain Bloomingdale’s and cosmetics retailer Bluemercury are up 6.5% and 6.2%, respectively.
Morningstar’s Swartz said he’s not confident in the turnaround strategy, given this is the latest of three similar efforts in the last decade. «The last two did not generate a lot of value for shareholders,» he said.
Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].
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