Company Overview - Proactive is a financial news publisher that provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The company has a team of experienced news journalists who produce independent content across various financial markets [2] Market Focus - Proactive specializes in medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - The content delivered by the team includes insights into sectors such as biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] Technology Adoption - Proactive is recognized for its forward-looking approach and enthusiastic adoption of technology to enhance workflows [4] - The company utilizes automation and software tools, including generative AI, while ensuring that all published content is edited and authored by humans [5]

Summary of Key Points Core Viewpoint - Numerous companies are lowering their profit forecasts for 2025 due to the impact of tariffs and economic uncertainty, indicating a broader trend of caution across various industries. Group 1: Retail Sector - Abercrombie & Fitch lowered its full-year profit forecast for 2025, citing a $50 million hit from tariffs, including a 30% tariff on imports from China and a 10% tariff on other imports [1][2] - Macy's also reduced its earnings per share outlook for the year, attributing it to tariffs, moderation in consumer spending, and increased competition [3] - Target expects sales to decline throughout 2025, previously projecting a 1% growth, due to weaker spending linked to tariff uncertainties [3] Group 2: Consumer Goods and Food & Beverage - Diageo warned of a $150 million hit to annual profits in 2025 but plans to offset half of this impact through unspecified actions [4] - PepsiCo lowered its earnings forecast for 2025, facing higher supply chain costs due to tariffs and a volatile consumer environment [15] - Kraft Heinz also lowered its outlook, citing a volatile operating environment influenced by tariffs and inflation [13] Group 3: Automotive Industry - Ford expects tariffs to reduce its earnings before interest and taxes by about $1.5 billion in 2025 and has suspended its full-year guidance [8] - General Motors lowered its earnings forecast to between $10 billion and $12.5 billion, down from $13.7 billion to $15.7 billion, due to the impact of tariffs [12] - Toyota estimated a $1.25 billion profit loss in April and March due to U.S. tariffs, forecasting a nearly 21% dip in operating income through 2025 [5] Group 4: Technology and Electronics - AMD anticipates a $1.5 billion revenue loss in 2025 due to restrictions on chip shipments to China [7] - Apple expects a $900 million hit to its bottom line in the second quarter due to tariffs, complicating future predictions [10] - Logitech withdrew its outlook for the 2026 fiscal year due to ongoing tariff uncertainties [17] Group 5: Airlines and Transportation - JetBlue and Alaska Airlines both pulled their full-year guidance for 2025 due to macroeconomic uncertainty [13][17] - Delta Airlines withdrew its full-year guidance, citing broad macro uncertainty [18] - United Airlines issued a second guidance featuring significantly lower earnings for 2025, reflecting the unpredictable economic environment [17] Group 6: Miscellaneous - Steve Madden withdrew its financial guidance for 2025, facing heightened uncertainty from new tariffs [6] - Rivian lowered its targets for vehicle deliveries and capital spending for 2025 due to significant uncertainty in the global economic landscape [6] - Snap declined to issue guidance for its second quarter, citing uncertainty in macroeconomic conditions affecting advertising demand [14]

Core Viewpoint - Macy's has reduced its annual profit forecast due to the impact of tariffs and a slowdown in consumer spending, indicating a cautious outlook for the retail sector [1][3][4] Financial Performance - The company now expects adjusted earnings per share of $1.60 to $2 for 2025, down from a previous forecast of $2.05 to $2.25, with 15 to 40 cents of the drop attributed to tariffs [1][3] - Macy's reaffirmed its annual sales forecast of $21 billion to $21.4 billion, a decline from last year's $22.29 billion [4] - For the three months ended May 3, adjusted earnings per share were reported at 16 cents, beating projections of 14 cents, while revenue was $4.6 billion, above expectations of $4.5 billion [4] Market Challenges - The company faces challenges from a slowdown in consumer spending and increased competition in promotions and discounts across the retail industry [3][8] - Comparable sales at Macy's locations fell 0.8% compared to the same period last year, while same-store sales at Bloomingdale's and Bluemercury increased by 3.8% and 1.5%, respectively [7][9] Strategic Initiatives - Macy's is undergoing a three-year turnaround plan, which includes closing 150 locations by early 2027 and enhancing its Bluemercury and Bloomingdale's businesses [5][6] - The company has invested in staffing, improved displays, and a new merchandise mix at 125 locations, which is about one-third of the stores it plans to keep open [6][11] Stock Performance - Macy's shares have decreased by approximately 27% so far this year [10][13]

Group 1 - Macy's, Inc. (NYSE: M) has experienced a significant decline in share price, losing 41% over the past year [1] - Investors are dissatisfied with the slow pace of the company's turnaround efforts, particularly after it rejected a buyout offer [1] - The company has a history of making contrarian bets based on macro views and stock-specific turnaround stories to achieve outsized returns [1]

Company Impact - Macy's lowered its full-year profit forecast for 2025 due to higher tariffs affecting its business [1] - Target expects sales to decline throughout 2025, previously projecting a 1% growth, citing weaker spending amid tariff uncertainty [2] - Diageo anticipates a $150 million hit to annual profits in 2025 but plans to offset half of this impact through unspecified actions [3] - Walmart warned that higher tariffs will lead to increased prices, unable to absorb all the pressure due to narrow retail margins [4] - Ford expects tariffs to reduce its earnings before interest and taxes by about $1.5 billion in 2025 and has suspended its full-year guidance [7] - General Motors lowered its earnings forecast for 2025 to between $10 billion and $12.5 billion, down from $13.7 billion to $15.7 billion, adjusting to the new trade policy environment [10] - Kraft Heinz lowered its full-year outlook due to a volatile operating environment influenced by tariffs and inflation [11] - PepsiCo lowered its earnings forecast for 2025, facing higher supply chain costs due to tariffs and a subdued consumer backdrop [13] Industry Trends - Companies across various sectors are withdrawing or adjusting their financial guidance for 2025 due to macroeconomic uncertainty driven by tariffs [5][8][12] - The automotive industry, including Toyota and Ford, is particularly affected, with significant expected declines in operating income and earnings [4][10] - The retail sector is experiencing heightened competition and promotional landscapes, leading to cautious outlooks from companies like Macy's and Target [2][1] - Airlines are also pulling their full-year guidance, citing economic uncertainty and volatility, with JetBlue and Alaska Airlines among those affected [11][15] - The overall sentiment in the market reflects a cautious approach as companies navigate the unpredictable tariff environment and its implications on profitability [9][16]

Core Viewpoint - Macy's Inc. has revised its annual outlook due to initial and current tariffs, moderation in consumer discretionary spending, and increased competition, leading to a decrease in expected adjusted earnings per share for fiscal 2025 [1] Financial Performance - The company reported net sales of $4.6 billion for Q1 2025, a decline of 5.1% year over year, but exceeded the consensus estimate of $4.50 billion [3] - Comparable sales decreased by 2.0% on an owned basis and 1.2% on an owned-plus-licensed-plus-marketplace basis [3] - Adjusted earnings were reported at 16 cents per share, surpassing the consensus of 14 cents [4] - Core adjusted EBITDA was $308 million, down from $363 million a year ago [4] Future Guidance - For fiscal 2025, Macy's has lowered its adjusted earnings per share guidance from $2.05-$2.25 to $1.60-$2.00, compared to the consensus of $1.93 [1] - The company maintained its sales guidance for 2025 at $21 billion-$21.4 billion, slightly below the consensus of $21.31 billion [1] - For Q2 2025, Macy's forecasts sales between $4.65 billion and $4.75 billion and adjusted earnings of 15 to 20 cents per share, compared to the consensus of $4.76 billion and 34 cents, respectively [5] Margin and Sales Trends - The gross margin remained flat at 39.2%, with improved merchandise margin offset by higher delivery expenses as a percentage of net sales [4] - Comparable sales for the go-forward business were down 1.8% on an owned basis and 0.9% on an owned-plus-licensed-plus-marketplace basis [4] - Bloomingdale's and Bluemercury reported positive sales growth, with Bloomingdale's net sales up 2.6% and Bluemercury's up 0.8% [6]

Core Insights - Retailers are experiencing mixed earnings reports, reflecting the impact of tariffs, consumer demand, and operational resilience [1] Group 1: Macy's Inc - Macy's reported adjusted first-quarter earnings of 16 cents per share on revenue of $4.60 billion, exceeding Wall Street expectations [2] - The company has cut its full-year profit forecast due to tariff hikes and increased promotions [2] - Macy's is undergoing a significant turnaround, closing approximately 150 stores and focusing on stronger brands like Bloomingdale's and Bluemercury [2] - Despite a 4% increase before the market opened, Macy's stock is down over 28% year to date [2] Group 2: Abercrombie & Fitch Co - Abercrombie & Fitch's stock surged over 28% in premarket trading following a strong first quarter [3] - The retailer posted earnings of $1.59 per share on $1.1 billion in revenue, significantly surpassing estimates [3] - Although Abercrombie issued positive guidance for the current quarter, it reduced its full-year profit forecast due to an anticipated $50 million impact from tariffs [3] - Prior to this report, Abercrombie's stock was down 48.4% in 2025 [3] Group 3: Dick's Sporting Goods Inc - Dick's Sporting Goods saw its stock rise 5% in electronic trading after reporting earnings of $3.37 per share on $3.17 billion in net sales, both exceeding analyst forecasts [4] - The company reaffirmed its full-year outlook and is managing tariff challenges effectively [4] - Dick's announced plans to acquire rival Foot Locker, indicating confidence in its long-term strategy [4] - Dick's Sporting Goods has a year-to-date deficit of 23.9% [4]

Core Viewpoint - Macy's reported quarterly earnings of $0.16 per share, exceeding the Zacks Consensus Estimate of $0.14 per share, but down from $0.27 per share a year ago, indicating a 40.74% year-over-year decline in earnings [1] - The company achieved a revenue of $4.6 billion for the quarter, surpassing the Zacks Consensus Estimate by 3.16%, but down from $4.85 billion year-over-year, reflecting a 5.12% decrease [2] Financial Performance - The earnings surprise for the latest quarter was 14.29%, and the company has surpassed consensus EPS estimates three times over the last four quarters [1][2] - Macy's shares have declined approximately 28.9% since the beginning of the year, contrasting with the S&P 500's gain of 0.7% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.32 on revenues of $4.72 billion, and for the current fiscal year, it is $2.03 on revenues of $21.18 billion [7] - The estimate revisions trend for Macy's is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Retail - Regional Department Stores industry is currently in the bottom 25% of the Zacks industry rankings, suggesting that stocks in this sector may struggle compared to those in the top 50% [8] - Another competitor in the same industry, Kohl's, is expected to report a quarterly loss of $0.22 per share, with revenues projected at $3.2 billion, down 5.2% from the previous year [9][10]

Financial Data and Key Metrics Changes - First quarter net sales reached $4.6 billion, exceeding guidance of $4.4 billion to $4.5 billion [9][29] - Comparable owned plus licensed plus marketplace sales declined by 1.2%, better than the guidance of a decline of 4.5% to 2.5% [9][29] - Adjusted diluted EPS was $0.16, above the guidance range of $0.12 to $0.15, compared to $0.27 last year [11][33] - Gross margin was $1.8 billion or 39.2% of net sales, flat compared to the prior year [32] Business Line Data and Key Metrics Changes - Macy's net sales were down 6.5%, with comparable sales down 2.1% [30] - Bloomingdale's net sales increased by 2.6%, with comparable sales rising by 3.8% [31] - Blue Mercury net sales were up 0.8%, with comparable sales increasing by 1.5% [31] - Backstage outperformed the total Macy's fleet, while Marketplace achieved approximately 40% GMV growth [12] Market Data and Key Metrics Changes - International tourism negatively impacted comparable sales by about 30 basis points [10] - The go-forward business comps outperformed total, declining by 0.9% [10] Company Strategy and Development Direction - The company is focused on its "Bold New Chapter" strategy, which includes strengthening and reimagining Macy's, accelerating luxury, and modernizing operations [8][12] - The reimagined 125 locations outperformed the rest of the Macy's fleet, with a negative comp of 0.8% compared to a negative 2.1% for the total Macy's nameplate [12][30] - The company aims to diversify sourcing to mitigate tariff impacts, with 20% of products originating from China, down from over 50% pre-pandemic [19] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the second quarter, noting stronger performance in March and April compared to February [45] - The company anticipates a more choiceful consumer and plans to navigate an uncertain promotional environment [22][35] - Management highlighted the importance of maintaining a healthy inventory to sales ratio while being disciplined with inventory commitments [22][39] Other Important Information - The company plans to invest approximately $800 million in capital expenditures to support long-term growth [38] - SG&A expenses were relatively flat at $1.9 billion, with a percentage of total revenue at 39.9%, reflecting lower net sales [32] Q&A Session Summary Question: Sales guidance and consumer pressure - Management reaffirmed the annual sales guidance, noting stronger performance in March and April compared to February, and expressed cautious optimism for the rest of the year [44][45] Question: Impact of tariffs on pricing - Pricing is gradually being impacted by tariffs, with limited pricing seen in the second quarter, and management is negotiating with suppliers to manage costs [52][56] Question: Actions to capture market share - The company is focusing on product flow, improving marketing quality, and enhancing in-store experiences to capture market share [66] Question: Gross margin pressure in Q2 - Management indicated that gross margin pressure in Q2 will be influenced by markdowns and tariffs, with a focus on maintaining competitive pricing [68][69] Question: Inventory planning amid tariffs - The company plans to remain disciplined in inventory management, avoiding over-purchasing to mitigate tariff impacts [90] Question: Consumer health across income cohorts - Consumer health remains under pressure, but there is a positive response to newness and good value, particularly in categories like fine jewelry and big-ticket items [113][115]

Financial Data and Key Metrics Changes - First quarter net sales reached $4.6 billion, exceeding guidance of $4.4 billion to $4.5 billion [9][29] - Comparable owned plus licensed plus marketplace sales declined by 1.2%, better than the guidance of a decline of 4.5% to 2.5% [9][29] - Adjusted diluted EPS was $0.16, above the guidance range of $0.12 to $0.15, compared to $0.27 last year [11][33] - Gross margin was $1.8 billion or 39.2% of net sales, flat compared to the prior year [32] Business Line Data and Key Metrics Changes - Macy's net sales were down 6.5%, with comparable sales down 2.1% [30] - Bloomingdale's net sales increased by 2.6%, with comparable sales rising by 3.8% [31] - Blue Mercury net sales were up 0.8%, with comparable sales increasing by 1.5% [31] - Backstage outperformed the total Macy's fleet, while Marketplace achieved approximately 40% GMV growth [12] Market Data and Key Metrics Changes - International tourism negatively impacted comparable sales by about 30 basis points [10] - The go-forward business comps outperformed total, declining by 0.9% [10] - The luxury segment showed resilience, with Bloomingdale's and Blue Mercury continuing their positive comp trends [14][15] Company Strategy and Development Direction - The company is focused on its "Bold New Chapter" strategy, emphasizing omni-channel performance and reimagining store locations [8][9] - The strategy includes strengthening Macy's, differentiating luxury offerings, and modernizing operations [15][16] - The company aims to leverage generative AI to modernize its supply chain and improve inventory allocation [9][12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the second quarter, noting improved performance in May compared to earlier months [43][44] - The company is navigating uncertainties related to tariffs and consumer behavior, with a focus on maintaining flexibility in inventory commitments [22][23] - Management highlighted the importance of strategic pricing decisions to offset tariff impacts while remaining competitive [45][46] Other Important Information - The company closed 64 underperforming locations as part of its strategy [25] - The impact of tariffs is estimated to affect annual gross margin by roughly 20 to 40 basis points [20] - The company plans to invest in customer-facing initiatives funded by savings from closed locations [32][38] Q&A Session Summary Question: Sales guidance and consumer pressure - Management reaffirmed annual sales guidance, noting stronger performance in March and April compared to February, with cautious optimism for the rest of the year [43][44] Question: Strategic pricing decisions - Pricing adjustments are being made selectively, with a focus on maintaining value for customers while managing tariff impacts [45][46] Question: Impact of tariffs on pricing and consumer willingness - Pricing is gradually being integrated into the system, with limited increases observed in the second quarter [51][52] Question: Actions to capture market share - The company is enhancing product offerings, improving marketing quality, and enhancing in-store experiences to capture market share [65][66] Question: Reimagine 125 performance and future plans - Management remains optimistic about the Reimagine 125 initiative, with improvements noted in March and May [75][76] Question: SG&A guidance range - The SG&A guidance range provides flexibility to navigate various scenarios amid uncertainty [78][79] Question: Consumer health and category performance - Consumer health remains under pressure, but there is a positive response to newness and value [114][115]