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Macy’s said it expects sales to decline again this year as even affluent customers of the department store chain wait to see how swirling tariffs and inflationary pressures hit the economy.
The retailer guided for $21 billion to $21.4 billion in sales in fiscal 2025, down by about $1 billion from last year and roughly in line with analyst forecasts for $21.34 billion, according to FactSet.
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Economic uncertainty has affected all levels of consumers, even those that seek out its luxury brands, executives said on a call with analysts.
“I think the affluent customer that’s shopping Macy’s is just as uncertain and as confused and concerned by what’s transpiring,” Chief Executive Tony Spring said on the call.
Shares fell 5% to a 12-month low of $12.60 after the market opened.
Comparable sales were expected to fall between half a percentage point and 2% from last year, while adjusted earnings are expected to hit $2.05 to $2.25 a share. Analysts polled by FactSet had been projecting a small gain in comparable sales and adjusted earnings of $2.29 a share.
The outlook accounted for external uncertainties faced by the company and its customers, Spring said. “We are cognizant of the external environment and the ongoing myriad of unknowns.”
Spring’s comments came as the White House’s trade war with China and its North American neighbors dampens consumer confidence and stokes concerns of a recession this year. President Trump’s tariffs on the country’s major trading partners are expected to lead to higher prices for consumers and pressure discretionary spending.
Inventories at Macy’s were in good shape for the current quarter and unaffected by any pending tariffs, Spring said Thursday. The company will be taking a case-by-case approach to the levies as the year progresses, he said.
For the fiscal fourth quarter that ended Feb. 1, the company’s sales fell 4.3% to $7.77 billion, just under forecasts for $7.78 billion, according to FactSet. Comparable sales across its brands were down more than 1%, a bigger drop than projected.
Sales at the flagship Macy’s chain were down more than 5%, fully offsetting small gains at its Bloomingdale’s and Bluemercury banners.
The company has been trying to boost revenue by hiring more salespeople and investing in certain so-called “go-forward” stores while closing weaker ones. The company shuttered 64 of the 150 locations planned for closure in fiscal 2024, Spring said.