Macy’s reported a profit in the fourth quarter despite a dip in sales as shoppers remained cautious about spending. The quarterly profit exceeded Wall Street’s expectations, but sales slightly missed forecasts. Uncertainty about American consumer behavior and new tariffs influenced the company’s 2025 outlook. Shares dropped just over 3% before the opening bell on Thursday.
The imposition of new tariffs by President Donald Trump against key U.S. trading partners has led to retaliatory measures from Mexico, Canada, and China, causing market turbulence. These tariffs risk reigniting inflation, which has shown signs of rising recently. The U.S. introduced 25% tariffs on Mexican and Canadian imports, with a reduced 10% tariff on Canadian energy. Tariffs on Chinese products doubled to 20%.
Adding to the uncertainty, U.S. trade policy appears inconsistent, complicating business planning. Trump recently reversed course, granting U.S. automakers a one-month exemption from new tariffs on imports from Mexico and Canada.
Macy’s, which also operates Bloomingdale’s and Bluemercury, reported net income of $342 million, or $1.21 per share, for the quarter ending Feb. 1. Adjusted earnings per share were $1.80, surpassing analyst expectations of $1.54 and reversing a $128 million loss from the previous year. Sales fell 4.3% to $7.77 billion from $8.12 billion. Comparable sales for the overall company rose 0.2%, while Macy’s nameplate stores saw a 1.9% decline.
The retailer’s modernization efforts seem effective, with comparable sales rising 1.2% at the first 50 upgraded stores. Bloomingdale’s and Bluemercury also performed well, reporting comparable sales growth of 6.5% and 6.2%, respectively.
For the current year, Macy’s expects earnings of $2.05 to $2.25 per share on net revenue of $21 billion to $21.4 billion. Analysts predict a profit of $2.29 per share on sales of $21.34 billion.
— news from AL.com