Anne d’Hynenzio and Michelle Chapman, business writer for the Associated Press
NEW YORK (AP) – Macy’s sales and profits slipped in the first quarter and department stores. This cites a more cautious client and a US-initiated trade war that cuts its profit forecast for 2025.
However, New York retailers have surpassed most performance expectations for the first three months of the year and maintained annual sales forecasts.
However, Macy CEO Tony Spring said that after seeing little tariff-related price increases in the first quarter, there will now be some “limited” price increases, leading to a more cautious annual profit outlook.
“I think it’s important to understand that we’re not just raising prices widely,” Spring said during a conference call Wednesday. “We are very surgical about the customs situation.”
The company has also diversified its product origins, and he said it pulls out items when mathematics doesn’t work.
Approximately 20% of Macy’s products came from China at the end of last year. Private brands raised about 27% from China, starting from 32% last year.
“With the recent announcement of these tariffs, we have renegotiated our orders with our suppliers,” Spring said. “We have cancelled or delayed an order if the value proposition is not where it is needed.”
Stocks rose 1% on Wednesday.
Sales at Macy’s, which also owns the luxury Bloomingdale and the Bluemercury Cosmetics chain, fell to $4.79 billion from $5 billion the previous year. This is better than the $4.42 billion Analyst voted for what Factset expected.
Equivalent sales including online soaked 2%. Bloomingdale and Bluemercury had comparable store sales growth.
Neil Saunders, managing director of GlobalData, said it wasn’t a bad quarter for Macy’s, especially as retailers close less-performing locations.
Macy’s previously said it would close 66 stores, primarily in the first quarter.
“The 2.0% DIP of comparable sales is below market growth, but it’s not unexpected at all,” writes Saunders. “And with the exception of a robust holiday quarter, Macy’s is a slightly better performance than it was offered for most of last year’s fiscal year.”
For the period ending May 3, Macy’s won $38 million, or 13 cents per share. That’s comparable to $62 million a year ago, or 22 cents per share.
With the one-off fee removed, the revenue was 16 cents per share, breaking through Wall Street estimates by a penny.
The company stuck to 2025 sales forecasts ranging from $21 billion to $21.4 billion. However, we are now expecting annual adjusted revenues between $1.60 and $2 per share. Previous forecasts were adjusted earnings of $2.05 to $2.25 per share.
Industry analysts had forecast a full year sales of $21.03 billion and earnings per adjusted share of $1.91.
Macy’s and other retailers are tackling uncertainty around tariffs that make planning difficult. The same applies to many American consumers who are increasingly uncomfortable about seeing the US economy and spending.
The American Eagle outfit said earlier this month that it would withdraw its annual financial outlook, citing “macro uncertainty” and would write down $75 million in spring and summer products.
Roth Store retracted its forecast last week.
Walmart, the country’s largest retailer, has been old from the public Donald Trump this month after President Donald Trump has already raised prices for several items and said he must do so again this summer. Trump told retail giants they should “eat” additional costs.
Target sales fell more than expected in the first quarter, warning that they will continue to have a flag this year.
Home Depot also said that it would eat some of the costs, but that some products that were heavily affected by the trade war are no longer on the shelves.
Trump’s threatened import tax on 145% Chinese products was reduced to 30% in a transaction announced on May 12, with some cuts of tariffs at the 90-day suspension. Trump on Friday threatened a 50% tax on all imports from the European Union and a 25% tariff on smartphones unless it was made in the US.
However, on Sunday, Trump said the US would delay the implementation of 50% tariffs on goods from the EU until July 9th for negotiations.
Macy’s CEO Spring has successfully made a vendor to lower prices, but said department stores are also absorbing some costs.
“We still think the customer value equation is very relevant, so we are making selective price increases in selective brands, selective categories,” Spring said. “So, while some of the impact on our gross profit this year is around tariffs, we’re also investing in gaining market share because we really believe the dimension of price values will become very important as we enter the second half of this year.”
Original issue: May 28, 2025 9:17am EDT
