Why TD Cowen Turned More Cautious on Macy’s (M) Despite a Fourth-Quarter Beat

Group 1 - Macy's reported fourth-quarter 2025 net sales of $7.64 billion, a decrease of 1.7% year over year, with adjusted EPS of $1.67, exceeding expectations of $1.57, and comparable sales growth of 1.8% against a forecasted decline of 0.9% [1][2] - For fiscal 2026, Macy's management guided for net sales between $21.4 billion and $21.65 billion and adjusted EPS ranging from $1.90 to $2.10, reflecting a cautious outlook due to macroeconomic and geopolitical uncertainties [2] - TD Cowen analyst Oliver Chen maintained a Hold rating on Macy's and reduced the price target to $20 from $21, citing margin concerns amid inflation, tariffs, and freight-related costs impacting the retail sector [1][2] Group 2 - CFO Tom Edwards indicated that tariffs are expected to reduce EPS by approximately $0.05 to $0.10 and gross margin by about 40 to 60 basis points, particularly in the first half of fiscal 2026 [2] - The strength in fragrance and luxury categories contributed positively to Macy's performance, despite the overall challenges faced by department stores [1]