Latest news with #BoldNewChapter
Yahoo
28-05-2025
- Business
- Yahoo
Macy's slashes profit forecast, says tariffs dampen outlook
Macy's slashed its full-year profit forecast on Wednesday, attributing the downbeat expectations in part to tariffs imposed by President Donald Trump. The New York-based retail chain is the latest major company to warn of ill effects from the levies, including Target, Walmart and Nike. Macy's downgraded its expectations for adjusted earnings per share from a range of $2.05 to $2.25, instead saying the metric is likely to register between $1.60 to $2.00. MORE: Consumer confidence brightens as Trump rolls back tariffs In addition to tariffs, Macy's faulted flagging consumer spending and heightened competition. The earnings release arrives more than a year after the company embarked on a three-year plan to improve its balance sheet by closing its low-performing stores and optimizing its e-commerce service. The nationwide retailer said last year that it plans to close about 150 stores by 2027. Macy's brought in $4.6 billion in revenue over a recent three-month period, exceeding the company's expectations, according to the earnings release. "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," CEO Tony Spring said in a statement on Wednesday. The tariff escalation in recent weeks poses a challenge for Macy's, however. Trump earlier this month slapped 30% tariffs on China, a key source of apparel imports for the retail chain. The levies mark a deescalation from a previous 145% levy on China, but the tariffs remain well above levels prior to Trump's second term. Roughly 20% of Macy's merchandise originates in China, Spring told CNBC. The tariffs helped propel a monthslong stretch of souring consumer sentiment, which also threatens the bottom line of sellers like Macy's. However, a Conference Board survey released on Tuesday showed a brightening of consumer attitudes in May, suggesting that consumer appetites had rebounded as Trump rolled back some tariffs. Macy's slashes profit forecast, says tariffs dampen outlook originally appeared on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-05-2025
- Business
- Yahoo
M Q1 Earnings Call: Macy's Lowers Full-Year Profit Outlook Amid Mixed Consumer Trends
Department store chain Macy's (NYSE:M) missed Wall Street's revenue expectations in Q1 CY2025, with sales falling 4.1% year on year to $4.79 billion. Its non-GAAP profit of $0.16 per share was in line with analysts' consensus estimates. Is now the time to buy M? Find out in our full research report (it's free). Revenue: $4.79 billion (4.1% year-on-year decline) Adjusted EPS: $0.16 vs analyst estimates of $0.15 (in line) Management lowered its full-year Adjusted EPS guidance to $1.80 at the midpoint, a 16.3% decrease Operating Margin: 2%, in line with the same quarter last year Locations: 679 at quarter end, down from 718 in the same quarter last year Same-Store Sales fell 2% year on year, in line with the same quarter last year Market Capitalization: $3.35 billion Macy's first quarter results reflected the impact of ongoing consumer caution and the company's efforts to adapt to shifting demand patterns. CEO Tony Spring pointed to the outperformance of the reimagined 125 Macy's locations, as well as momentum in Bloomingdale's and Blue Mercury, as evidence that the retailer's 'Bold New Chapter' strategy is gaining traction. Management discussed improvements in in-store experience, product assortment, and inventory allocation, with Spring noting, 'Customers appreciate our renewed emphasis on the shopping experience and a commitment to providing relevant fashion and newness at a compelling value.' The quarter was also shaped by the closure of underperforming stores and continued discipline in inventory management. Looking ahead, Macy's leadership signaled that increased promotional intensity, ongoing tariff uncertainty, and a cautious consumer are key factors shaping the company's outlook. Spring stated that the company is 'being disciplined with our inventory commitments' and remains flexible to adjust to demand shifts, highlighting ongoing negotiations with vendors to limit the impact of tariffs. CFO Adrian Mitchell warned that gross margins will be pressured by higher delivery expenses and selective price increases in response to tariffs, while management anticipates consumers will become 'more choiceful as the year progresses.' The company plans to reinvest operational savings into customer-facing initiatives but is also preparing for a more competitive retail environment for the remainder of the year. Management attributed first quarter performance to strategic investments in store experience, selective product launches, and ongoing cost discipline, while navigating macroeconomic and industry headwinds. Reimagined store progress: The reimagined 125 Macy's stores showed better comp performance than the broader fleet, supported by improved merchandising, additional staffing, and curated product assortments. These initiatives are designed to differentiate Macy's in a challenging retail landscape. Luxury segment resilience: Both Bloomingdale's and Blue Mercury delivered positive comparable sales, benefiting from targeted brand launches, exclusive partnerships, and a refreshed store experience. Expansion of Bloomingdale's outlet and small-format 'Bloomys' concepts is allowing Macy's to reach new markets and customer segments. Off-price and marketplace growth: The Backstage off-price concept outperformed full-line stores, while Macy's marketplace platform (which allows third-party sellers) achieved approximately 40% growth in gross merchandise value. These channels help Macy's capture price-sensitive shoppers and add assortment flexibility. Supply chain modernization: The company continued to streamline operations by leveraging generative AI for inventory allocation and improving distribution efficiency. Management highlighted that these actions have contributed to maintaining flat merchandise margins despite growing delivery costs. Tariff mitigation efforts: Macy's actively reduced its sourcing exposure to China, renegotiated supplier contracts, and implemented selective price increases to offset new tariffs. Management estimates a 20 to 40 basis point impact on annual gross margin from tariffs, but noted the situation remains fluid. Macy's expects ongoing consumer caution, heightened competition, and tariff impacts to influence revenue and profitability in the coming quarters. Consumer spending uncertainty: Management anticipates that consumers will remain cautious, leading to a more promotional retail environment. Guidance assumes no rebound in international tourism and that consumers will continue to prioritize value, prompting Macy's to be flexible with inventory and pricing decisions. Tariff and cost headwinds: The company expects tariffs on imported goods, particularly from China, to pressure gross margins by 20 to 40 basis points. Macy's is mitigating these effects through vendor negotiations, selective price increases, and strategic sourcing shifts, but acknowledges that the overall cost environment remains unpredictable. Strategic reinvestment and store optimization: Macy's plans to reinvest savings from closed stores and operational efficiencies into customer-facing initiatives, including refreshed store formats and expanded product offerings. Management believes these investments are critical for gaining market share amid industry disruption and changing consumer behavior. In the quarters ahead, the StockStory team will closely monitor (1) the trajectory of comparable sales at reimagined Macy's locations and luxury banners, (2) Macy's ability to offset tariff-related margin pressures through pricing and sourcing actions, and (3) progress in shifting consumer sentiment and discretionary spending. We will also track execution on store optimization and new merchandising strategies as key indicators of sustained recovery. Macy's currently trades at a forward P/E ratio of 6.3×. Should you double down or take your chips? Find out in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-05-2025
- Business
- Yahoo
Macy's latest earnings show the CEO's turnaround plan is working despite a looming tariff threat
Macy's Inc CEO Tony Spring agrees with many people's assessment that a great number of its namesake department stores are substandard and deserve to be closed. So Spring, who took on the top job last year, has been closing dozens of stores and focusing on 125 Macy's locations that the retailer believes have the most potential. The company's latest set of financial results, released on Wednesday, suggest Spring's strategy is sound, even if it ultimately means a smaller footprint for the retail chain. At the 125 stores that the company has chosen to focus on, sales fell by only 1.3% compared to the same quarter last year. Analysts said those figures aren't bad, given the rise in consumer anxiety this spring and the shift toward essentials and low prices. And overall, Macy's, which also owns Bloomingdale's and luxury beauty chain Bluemercury, saw comparable sales fall by 2%, well below the 3.9% decline Wall Street expected. At the stores that Macy's calls the 'Reimagine 125,' the company has prioritized higher staffing levels, renovations to enhance product presentation and the quick introduction of new merchandise. That's all part of the company's three-year turnaround program, launched last year and named 'Bold New Chapter.' For now, the performance of the Reimagine 125 is crucial to proving to Wall Street that Macy's can become a more dynamic retailer again. 'These stores need to show positive progress to justify the Macy's Bold New Chapter strategy,' Neil Saunders, managing director at analytics firm GlobalData wrote in a research note. Macy's has done a good job so far to stop the bleeding, but the store still faces major challenges as it struggles to connect with consumers. Despite positive signs coming out of the 'Reimagine 125,' many other stores in the Macy's fleet are lagging. Once the company is done with its current store-closing campaign, it will have 350 Macy's stores, a bit more than half the number a decade ago. And while Macy's primarily sells discretionary items, it can only blame consumer sentiment so much. Overall sales for the company fell 5.1% to $4.6 billion. Meanwhile, rivals like Dillard's and the newly private Nordstrom have bested the company. And stellar results from clothier Abercrombie & Fitch and Dick's Sporting Goods on Wednesday showed how well-run retailers with neatly appointed stores offering what shoppers want can thrive in this environment. And although Macy's kept its sales forecast for the year, it did lower its full-year profit guidance, citing 'higher tariffs, more discounting by competitors and 'some moderation' in discretionary suggests the company will absorb a good chunk of any price increases caused by tariffs. But Spring told CNBC there would inevitably be some price hikes. About 20% of what Macy's sells originates in China.'It's not a one-size-fits-all kind of approach,' he told CNBC. 'There are going to be items that are the same price as they were a year ago. There is going to be, selectively, items that may be more expensive, and there are items that we might not carry because the pricing doesn't merit the quality or the perceived value by the consumer.' This story was originally featured on
Yahoo
28-05-2025
- Business
- Yahoo
Macy's beats on earnings but cuts 2025 guidance because of tariffs
Macy's gave Wall Street a masterclass in mixed signals on Wednesday: The department store chain beat first-quarter earnings expectations — then cut its full-year profit forecast, citing tariff pressures and cautious consumer spending related to the U.S. trade war. The retailer reported adjusted earnings per share (EPS) of $0.16, a penny ahead of analyst forecasts. Revenue came in at $4.6 billion, topping Wall Street's $4.42 billion estimate. But in a retail environment where companies are already walking a tightrope between inflation-wary shoppers and margin-squeezing costs, Macy's earnings have seemingly made one thing clear: You can put a price on geopolitical uncertainty. The company now expects adjusted EPS for the year to fall between $1.60 and $2.00, down from its earlier range of $2.05 to $2.25. Shares fell almost 4% by 10 a.m. ET. They had been up about 4% in premarket trading. The Trump administration's tariffs, particularly those on apparel and accessories from Asia, are rewriting the math behind Macy's bottom line. Chairman and CEO Tony Spring addressed the issue on the company's earnings call, emphasizing Macy's efforts to adapt. 'We are confident that we can continue to diversify countries of origin for both our private and national brands,' Spring said. 'With the recent announcement of these tariffs, we've renegotiated orders with suppliers. We've canceled or delayed orders where the value proposition is just not where it needs to be.' Spring added that Macy's currently has 'a good handle on the tariff-related costs' but said the situation is 'constantly changing.' Several major retailers are flashing warning signs as tariffs and economic uncertainty cloud the outlook for 2025. Target (TGT) reported a steeper-than-expected sales decline in the first quarter and expects sales to fall throughout the year. Walmart, meanwhile, has already raised prices (drawing President Donald Trump's ire) and expects to raise them again during the back-to-school season. And both American Eagle (AEO) and Ross Stores (ROST) have pulled their full-year guidance, citing macroeconomic volatility. Meanwhile, not all parts of Macy's business have been equally successful. High-end Bloomingdale's and cosmetics company Bluemercury (M) both posted growth in comparable sales, suggesting that more affluent shoppers remain resilient, but the flagship Macy's brand saw a 2% dip in comparable sales as its core middle-income customers pulled back. '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,' Spring said in the earnings report. 'Our first quarter results give us confidence that we have the right strategy and team in place to navigate the current environment while we continue to invest in our customer on the path to returning Macy's, Inc. to sustainable profitable growth.' For the latest news, Facebook, Twitter and Instagram. Sign in to access your portfolio
Yahoo
28-05-2025
- Business
- Yahoo
Macy's (NYSE:M) Exceeds Q1 Expectations
Department store chain Macy's (NYSE:M) announced better-than-expected revenue in Q1 CY2025, but sales fell by 4.1% year on year to $4.79 billion. The company's full-year revenue guidance of $21.2 billion at the midpoint came in 0.8% above analysts' estimates. Its non-GAAP profit of $0.16 per share was in line with analysts' consensus estimates. Is now the time to buy Macy's? Find out in our full research report. Revenue: $4.79 billion vs analyst estimates of $4.63 billion (4.1% year-on-year decline, 3.6% beat) Adjusted EPS: $0.16 vs analyst estimates of $0.15 (in line) The company reconfirmed its revenue guidance for the full year of $21.2 billion at the midpoint Management lowered its full-year Adjusted EPS guidance to $1.80 at the midpoint, a 16.3% decrease Operating Margin: 2%, in line with the same quarter last year Free Cash Flow was -$241 million compared to -$100 million in the same quarter last year Same-Store Sales fell 1.2% year on year, in line with the same quarter last year Market Capitalization: $3.35 billion '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, With a storied history that began with its 1858 founding, Macy's (NYSE:M) is a department store chain that sells clothing, cosmetics, accessories, and home goods. A company's long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. With $22.8 billion in revenue over the past 12 months, Macy's is one of the larger companies in the consumer retail industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because it's harder to find incremental growth when you've penetrated most of the market. To accelerate sales, Macy's likely needs to optimize its pricing or lean into international expansion. As you can see below, Macy's revenue declined by 2% per year over the last six years (we compare to 2019 to normalize for COVID-19 impacts) as it closed stores and observed lower sales at existing, established locations. This quarter, Macy's revenue fell by 4.1% year on year to $4.79 billion but beat Wall Street's estimates by 3.6%. Looking ahead, sell-side analysts expect revenue to decline by 5.4% over the next 12 months, a deceleration versus the last six years. This projection doesn't excite us and suggests its products will see some demand headwinds. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. A retailer's store count often determines how much revenue it can generate. Macy's has generally closed its stores over the last two years, averaging 1.7% annual declines. When a retailer shutters stores, it usually means that brick-and-mortar demand is less than supply, and it is responding by closing underperforming locations to improve profitability. Note that Macy's reports its store count intermittently, so some data points are missing in the chart below. The change in a company's store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales gives us insight into this topic because it measures organic growth for a retailer's e-commerce platform and brick-and-mortar shops that have existed for at least a year. Macy's demand has been shrinking over the last two years as its same-store sales have averaged 3.8% annual declines. This performance isn't ideal, and Macy's is attempting to boost same-store sales by closing stores (fewer locations sometimes lead to higher same-store sales). In the latest quarter, Macy's same-store sales fell by 1.2% year on year. This decrease was an improvement from its historical levels. It's always great to see a business's demand trends improve. We liked that Macy's beat analysts' revenue and gross margin expectations this quarter. On the other hand, its full-year EPS guidance was lowered and missed. The company cited "initial and current tariffs; some moderation in consumer discretionary spending; and a heightened competitive promotional landscape" as reasons for the guidance cut. Overall, this was a mixed print. The stock traded up 1.5% to $12.27 immediately after reporting. Macy's put up rock-solid earnings, but one quarter doesn't necessarily make the stock a buy. Let's see if this is a good investment. When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.
