Macy's joins retail giants warning of price hikes as tariffs weigh

Core Viewpoint - Macy's is planning to raise prices on select products due to global tariffs, while also taking measures to reduce exposure to China and renegotiate supplier orders [1][3][5]. Group 1: Company Strategy - CEO Tony Spring indicated that the company is minimizing the impact of tariffs by renegotiating orders and canceling or delaying those that do not meet value expectations [1]. - The company is adopting a "surgical" approach to tariffs, implementing selective price increases in categories where customer value remains strong [2]. - Macy's is closely monitoring sourcing options in Southeast Asia and Europe, while maintaining limited exposure to Canada and Mexico [5]. Group 2: Financial Impact - The company estimates that tariffs will affect its annual gross margin by approximately 20 to 40 basis points, influenced by inventory purchased under a previous 145% levy on China [6]. - Macy's has cut its full-year profit guidance due to the impact of tariffs, a slowdown in consumer discretionary spending, and increased competition [7]. - The adjusted earnings per share forecast for fiscal 2025 has been lowered to a range of $1.60 to $2, down from a previous estimate of $2.05 to $2.25 [8]. Group 3: Industry Context - Macy's is among several retailers facing challenges from the ongoing trade war, with competitors like Target also reporting revenue declines and adjusting guidance due to tariff uncertainties [10]. - Walmart has also warned of potential price hikes due to the significant impact of tariffs on retail margins [11][13].