Macy’s Cuts FY25 EPS and Margin Guidance as Tariffs, Spending Pressures Bite

Macy's Inc. (NYSE: M) trimmed its full-year 2025 earnings and adjusted EBITDA-margin outlook on Wednesday, citing higher tariffs, softer consumer discretionary spending, and intensified promotional competition, even after reporting a first-quarter earnings beat.

Q1 Beat, But Outlook Falls Short

• Adjusted EPS: $0.16 vs. consensus $0.14

• Net Sales: Maintained at $21.0-$21.4 billion, aligned with the $21.05 billion estimate

Despite the strong Q1 showing, Macy's now expects:

• Full-Year EPS: $1.60-$2.00 (down from $2.05-$2.25; consensus $1.93)

• Adjusted EBITDA Margin: 7.4%-7.9% (down from 8.4%-8.6%)

• Core EBITDA Margin: 7.0%-7.5% (down from 8.0%-8.2%)

• Comparable Sales: Decline of about 2% to flat

To track how analysts' price targets adjust in response to this guidance cut, investors can reference the Price Target Summary API for live updates on Macy's consensus estimates.

Revenue Mix and Promotional Landscape

Macy's attributed the outlook revision to:

• Increased Tariffs: Raising import costs on key merchandise categories

• Consumer Moderation: Reduced discretionary spend amid a higher-rate environment

• Promotional Intensity: Heightened competition forcing deeper markdowns

Investors evaluating Macy's exposure to discretionary versus essential goods can use the Ratios (TTM) API to compare its margins and valuation multiples against peers in the department-store sector.

Strategic Flexibility Amid Headwinds

Macy's emphasized its strong balance sheet, diverse brand portfolio, and mix of off-price to luxury offerings as levers to navigate the challenging backdrop. The company plans to:

• Optimize inventory and procurement to offset tariff impacts

• Target promotions more precisely to protect margins

• Leverage digital channels and loyalty programs to shore up traffic

With consumer sentiment under pressure and tariffs adding cost headwinds, Macy's guidance cut underscores the need for agile merchandising and disciplined cost management as the retailer heads into the peak holiday season.