Macy’s Profit and Sales Decline in Q1, Cuts 2025 Profit Forecast but Beats Expectations

New York – May 28, 2025

Macy’s, Inc. reported a decline in sales and profit for the first quarter of 2025, citing cautious consumer spending and looming U.S. trade war tariffs as key pressures, prompting the department store chain to lower its full-year profit forecast. Despite the downturn, the New York-based retailer, which owns Bloomingdale’s and Bluemercury, exceeded Wall Street expectations for the quarter, boosting shares by 1.7% to over 4% in premarket trading on Wednesday.

For the period ending May 3, Macy’s recorded net sales of $4.6 billion, down 5.1% from $4.85 billion a year earlier, yet surpassing analysts’ estimates of $4.5 billion. Comparable sales, including online channels, fell 2%, with the Macy’s brand seeing a 0.9% drop, while Bloomingdale’s and Bluemercury posted growth of 3% and higher, respectively. Net income dropped 38.7% to $38 million, or 13 cents per share, compared to $62 million, or 22 cents per share, in the prior year. Adjusted earnings of 16 cents per share edged out Wall Street’s forecast by a penny.

The retailer trimmed its 2025 adjusted earnings forecast to $1.60–$2.00 per share, down from $2.05–$2.25, citing tariff impacts and reduced discretionary spending. About 15–40 cents of the cut is attributed to tariffs, with 20% of Macy’s merchandise sourced from China. Industry analysts had projected $1.91 per share and sales of $21.03 billion, while Macy’s maintained its sales outlook of $21–$21.4 billion. CEO Tony Spring emphasized the company’s “Bold New Chapter” strategy, which includes closing 150 underperforming stores by 2026 and investing in 350 “go-forward” locations, with the “First 50” upgraded stores showing a 0.8% comparable sales increase.

Macy’s faces challenges from President Trump’s tariff policies, including a 30% tax on Chinese goods and a proposed 50% tariff on EU imports, delayed until July 9 for negotiations. Spring told CNBC that Macy’s will raise prices on some items and discontinue others to offset costs, navigating both demand and supply-side pressures. Other retailers, like Target and American Eagle Outfitters, have also cited “macro uncertainty,” with the latter withdrawing its 2025 outlook and writing down $75 million in inventory.

Executives highlighted efforts to diversify offerings, reduce redundant styles, and enhance store-label brands to adapt to cautious consumer behavior. Neil Saunders of GlobalData noted Bloomingdale’s strength as a bright spot. Despite the profit cut, Macy’s first-quarter performance and reaffirmed sales guidance signal resilience, though tariff uncertainty continues to cloud the retail sector’s outlook.