Macy's cuts profit outlook as tariffs, promotions hit its business

Core Viewpoint - Macy's has reduced its full-year profit guidance despite beating quarterly earnings expectations, citing higher tariffs, increased promotions, and moderation in discretionary spending as reasons for the adjustment [1][2]. Financial Performance - For fiscal 2025, Macy's adjusted earnings per share forecast is now $1.60 to $2, down from $2.05 to $2.25 [2]. - The company reaffirmed its full-year sales guidance of $21 billion to $21.4 billion, a decline from $22.29 billion in the previous year [2]. - In the fiscal first quarter, Macy's net income was $38 million (13 cents per share), down from $62 million (22 cents per share) in the same period last year [2]. - Sales decreased from $4.85 billion in the year-ago quarter [2]. Store Performance and Strategy - Macy's plans to close about 150 underperforming stores by early 2027, with comparable sales across its owned and licensed business declining 2.1% year over year [4]. - Comparable sales for the remaining stores, excluding those set to close, declined 1.9% [4]. - The company has invested in 125 locations, referred to as the "First 50" initiative, to enhance performance through increased staffing and improved merchandise displays [5][6]. Leadership Changes - Macy's announced key leadership changes, including the appointment of Thomas Edwards as the new CFO, effective June 22 [8]. Market Performance - As of the latest close, Macy's shares have decreased by approximately 29% this year, underperforming the S&P 500's nearly 1% gains [9].