Macy's Forecasts 2025 Sales, Profit Below Estimates As Retailers Battle Soft Demand

Reuters
06 Mar

March 6 (Reuters) - Macy's forecast annual sales and profit below Wall Street's expectations on Thursday, reflecting a broader trend among U.S. retailers grappling with reduced consumer spending amid the added pressure of new trade tariffs.

Shares of the company fell nearly 4.6% in volatile premarket trading.

The department-store chain, which sources a significant portion of its self-branded goods from China, is also expected to take a hit as President Donald Trump's newly announced tariffs will likely place an additional burden on already tight American household budgets.

Retailers from Walmart to Target have also issued cautious forecasts for the year on concerns about a potential hike in product prices, which could deter consumers.

Macy's said it expects 2025 net sales between $21 billion and $21.4 billion, compared with the average analyst estimate of $21.81 billion, according to data compiled by LSEG.

The company sees annual adjusted profit per share between $2.05 and $2.25, compared to an estimate of $2.31 per share.

CEO Tony Spring, who took over a year ago, has outlined a plan to turn the struggling department-store chain around by closing 150 Macy's stores through 2026, reinvesting in high-potential locations and opening smaller format stores.

"Spring has clear plans as to how he wants to turn around Macy's, but a little help from the U.S. consumer would not go amiss, and right now he does not seem to be getting it," said Russ Mould, investment director at AJ Bell.

Macy's nameplate banner saw comparable sales fall 0.9% on an owned-plus-licensed basis in the fourth quarter.

To drive demand, it is betting on opening more stores of its higher growth Bloomingdale's and Bluemercury luxury divisions, which saw comparable sales on an owned basis rise 4.8% and 6.2%, respectively, in the reported quarter.

The company's adjusted profit per share of $1.80 topped analysts' estimates of $1.53 per share. Macy's is also resuming share buybacks under its remaining $1.4-billion share repurchase authorization.

Its fourth-quarter sales fell 4.3% to $7.77 billion, compared to analysts' estimate of $7.87 billion.

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