By ANNE D’INNOCENZIO and MICHELLE CHAPMAN, Associated Press Business Writers
NEW YORK (AP) — Macy’s sales and profit slipped in its first quarter and the department store, citing more cautious customers and the impact that the U.S. trade war will have on the company and its shoppers, trimmed its profit forecast for 2025.
However the New York retailer, which also owns upscale Bloomingdale’s and the Bluemercury cosmetics chain, topped most performance expectations for the first three months of the year and maintained its sales forecast for the year.
Chairman and CEO Tony Spring said during Macy’s conference call on Wednesday that the company is in active talks with its partners as it navigates current economic conditions.
“We are confident that we can continue to diversify countries of origin for both our private and national brands,” Spring said. “With the recent announcement of these tariffs, we’ve renegotiated orders with suppliers. We’ve canceled or delayed orders where the value proposition is just not where it needs to be.”
The executive said that Macy’s currently has a “good handle on the tariff-related costs,” but is aware that the situation is constantly changing.
FILE – A Macy’s department store is in Bay Shore, Long Island, New York, on Tuesday, December 12, 2023. (AP Photo/Ted Shaffrey, File)The retailer is raising prices on some of its brands. While consumers remain under pressure, Spring said that they are responding well to new products and items that are considered to be a good value.
Shares rose about 4% before the market opened Wednesday.
Macy’s sales dropped to $4.79 billion from $5 billion a year earlier, better than the $4.42 billion that analysts polled by FactSet expected.
Comparable sales, which include online channels, dipped 2%. However, Bloomingdale’s and Bluemercury both saw comparable sales growth.
Neil Saunders, managing director of GlobalData, noted Bloomingdale’s 3% comparable sales growth.
“Good execution from Bloomingdale’s and its balanced assortment of luxury and prestige products has served it well,” he said. “This is especially so compared to chains that play much more exclusively in the very high-price arena, which have lost customers and seen an erosion of spending.”
“Our first-quarter results give us confidence that we have the right strategy and team in place to navigate the current environment while we continue to invest in our customer on the path to returning Macy’s, Inc. to sustainable profitable growth,” Spring said in a statement on Wednesday.
For the period ended May 3, Macy’s earned $38 million, or 13 cents per share. That compares with $62 million, or 22 cents per share, a year ago.
Stripping out certain items, earnings were 16 cents per share, which topped Wall Street’s estimate by a penny.
The company still anticipates 2025 sales in a range of $21 billion to $21.4 billion. It now expects full-year adjusted earnings between $1.60 and $2 per share. Its prior forecast was for an adjusted profit of $2.05 to $2.25 per share.
Industry analysts had been projecting full-year sales of $21.03 billion and an adjusted per-share profit of $1.91.
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Macy’s had about 20% of its products originate from China at the end of its last fiscal year. Private brands sourced approximately 27% from China, down from 32% last year.
Teen retailer American Eagle Outfitters withdrew its financial outlook for the year earlier this month citing “macro uncertainty” and said it would write down $75 million in spring and summer merchandise.
Ross Stores did the same last week.
Walmart, the nation’s largest retailer, got a public scolding from President Donald Trump after it said this month that it has already raised prices on some items and would have to do so again right when the back-to-school shopping season kicks off. Trump told the retail giant that it should “eat” the additional costs created by his tariffs.
Target Corp. announced last week that sales fell more than expected in the first quarter, and the retailer warned they will slip for all of 2025 as its customers, worried over the impact of tariffs and the economy, pull back on spending. The company said that it should be able to offset the majority of the impacts from tariffs.
Trump’s threatened 145% import taxes on Chinese goods were reduced to 30% in a deal announced May 12, with some of the higher tariffs on pause for 90 days. Trump on Friday threatened a 50% tax on all imports from the European Union as well as a 25% tariff on smartphones unless those products are made in America.
But then on Sunday, Trump said that the U.S. will delay implementation of a 50% tariff on goods from the EU from June 1 until July 9 to buy time for negotiations with the bloc.
Macy’s executives emphasized in March during the last earnings call that the company is facing lots of unpredictability given ever-changing tariff policies and is focusing on what it can control and zeroing in on improving its merchandise and services, including improving its store label brand.
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