Macy's Q1 Results Top Estimates, But Cuts FY25 Profit Outlook On Tariff Concerns

(RTTNews) - Omni-channel fashion retailer Macy's, Inc. (M) reported Wednesday a net profit for the first quarter that declined from last year, hurt by higher expenses and a net sales decline. However, both adjusted earnings per share and quarterly net sales topped analysts' estimates. The company also slashed its adjusted earnings guidance for the full-year 2025, to reflect impact of initial and current tariffs.

In Wednesday's trading session on the NYSE, Macy's shares are up $0.52 or 4.30 percent to trade at $12.56.

"We continued to execute against our Bold New Chapter strategy during the quarter, scaling key initiatives that improved our customer experience and contributed to stronger than expected performance across all three of our nameplates," said Tony Spring, chairman and chief executive officer of Macy's.

For the first quarter, Macy's reported a net income of $38 million or $0.13 per share, down from $62 million or $0.22 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $0.16 per share, compared to $0.27 per share in the year-ago quarter.

On average, 13 analysts polled expected the company to report earnings of $0.15 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter declined 5.1 percent to $4.60 billion from $4.85 billion in the same quarter last year. Analysts expect revenues of $4.43 billion for the quarter.

Comparable sales were down 2.0 percent on an owned basis and down 1.2 percent on an owned-plus-licensed -plus-marketplace basis.

Macy's brand net sales were down 6.5 percent, with comparable sales down 2.9 percent on an owned basis and down 2.1 percent, on an owned-plus-licensed-plus-marketplace basis.

Bloomingdale's brand net sales were up 2.6 percent, with comparable sales on an owned basis up 3.0 percent and on an owned-plus-licensed-plus-marketplace basis up 3.8 percent. Bluemercury brand net sales were up 0.8 percent, with comparable sales up 1.5 percent on an owned basis.

Credit card net revenues increased 31.6 percent to $154 million and Macy's Media Network net revenue grew 8.1 percent to $40 million from last year.

Gross margin rate of 39.2 percent was flat with last year, reflecting improved merchandise margin offset by higher delivery expense as a percent of net sales.

Selling, general and administrative expense increased 170 basis points to 39.9 percent, driven by lower net sales.

Looking ahead to fiscal 2025, the company now projects adjusted earnings in a range of $1.60 to $2.00 per share, down from the prior guidance range of $2.05 to $2.25 per share. The company continues to expect net sales between $21.0 billion and $21.4 billion, with comparable owned-plus- licensed-plus-marketplace sales decline of about 2.0 to 0.5 percent.

The Street is looking for earnings of $1.92 per share on net sales of $21.03 billion for the year.

The company said it has revised its annual outlook based on current information to account for several factors including, initial and current tariffs; some moderation in consumer discretionary spending; and a heightened competitive promotional landscape.

In mid-May, Macy's board of directors declared a regular quarterly dividend of 18.24 cents per share on Macy's, Inc's common stock, payable on July 1, 2025 to shareholders of record at the close of business on June 13, 2025.

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