Despite modest wins, store closures, tariff risks, and lingering activist pressure cloud the retailer’s future
Macy’s ( M) delivered better-than-expected first-quarter results on Wednesday, but concerns about its long-term strategy and valuation remain top of mind for investors.
The retailer reported net sales of $4.6 billion, a 5.1% year-over-year decline, but ahead of analyst estimates of $4.46 billion. Adjusted earnings per share came in at $0.16, beating expectations of $0.14, though still down 40.7% from last year.
Same-store sales fell 1.2%, outperforming the expected 3.85% drop. Notably, the 125 stores where Macy’s has invested in enhanced merchandise and service saw a smaller 0.8% decline, while luxury arms Bloomingdale’s and Bluemercury posted gains of 3.8% and 1.5%, respectively.
CEO Tony Spring, who is over a year into his role, expressed confidence in the company’s turnaround strategy, despite revising full-year earnings guidance downward. Macy’s now expects adjusted earnings per share of $1.60 to $2.00, down from prior expectations of $2.05 to $2.25.
The company reaffirmed its 2025 sales forecast of $21.0 billion to $21.4 billion, below last year’s $22.29 billion and below Wall Street’s $21.66 billion estimate. Same-store sales are now projected to decline 0.5% to 2%, contrary to analysts’ hopes for modest growth.
Macroeconomic pressures, including weak consumer sentiment and uncertainty surrounding potential tariffs under a Trump administration, are weighing heavily on Macy’s outlook. Additionally, the company continues to lose ground to off-price and e-commerce rivals.
The looming threat of activist investors also persists. Arkhouse Management, which previously submitted a $6.9 billion takeover bid, remains frustrated with Macy’s management, calling the stock “still mispriced” and hinting at potential renewed efforts.
With 66 store closures planned this year and 150 over the next three years, Macy’s faces a pivotal period as it attempts to regain relevance in a fast-changing retail landscape.
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