Macy’s Navigates Tariff Headwinds, Lowers Profit Forecast

Macy's (NYSE: M) trimmed its 2025 adjusted EPS guidance to $1.60-$2.00 (from $2.05-$2.25) as the department‑store giant contends with tariff‑driven cost pressures and early spring‑collection discounts to clear excess inventory.

Q1 Recap: Top‑Line Resilience, Early Discounts

Macy's beat Q1 estimates and held its full‑year net‑sales view at $21.0-$21.4 billion, buoyed by stronger traffic in remodeled stores. Yet CEO Tony Spring cautioned that “higher pricing is working its way into the system slowly,” prompting selective price increases and earlier markdowns to protect margins.

Tariff Impact & Strategic Response

• Supply‑Chain Costs: New U.S. tariffs on imports—set to rise July 9—have increased sourcing expenses. Track these key policy dates via FMP's Economics Calendar API.

• Competitive Landscape: Off‑price and big‑box rivals continue eroding department‑store share, forcing Macy's to balance aggressive promotions against price‑rise initiatives.

Valuation & Sector Comparison

Despite the EPS cut, Macy's shares rose 1% in choppy trading. At current levels, the stock trades at approximately 10× trailing‑12‑month earnings versus the broader retail sector's 12× average—data you can verify with FMP's Sector PE Ratio API. The valuation gap suggests Macy's turnaround progress is partly priced in.

Macy's decision to maintain its sales forecast while lowering profit targets reflects a pragmatic approach to rising costs and evolving consumer behavior—setting the stage for investors to watch execution on inventory clearing, promotional discipline, and pricing power.