Macy’s (M) beat Wall Street expectations for the first quarter but lowered its profit outlook for the full year, citing a tougher retail environment and tariff-related uncertainty. Despite the guidance cut, investors shrugged it off. M shares rose over 4% in early trading as results came in better than feared.
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The department store reported adjusted earnings of 16 cents per share, topping the 15-cent estimate. Revenue hit $4.8 billion, ahead of projections for $4.4 billion, offering a modest bright spot in an otherwise fragile outlook.
Macy’s Guidance Cut Lands, But Investors Stay Calm
Macy’s lowered its full-year adjusted EPS forecast to a range of $1.60 to $2.00, down from its previous $2.05–$2.25 guide. The new midpoint, $1.80, sits well below the analyst consensus of $1.91. Management blamed the revision on weaker consumer demand, ongoing tariffs, and a promotional pricing climate squeezing margins.
Still, the stock moved higher. The numbers may be down, but not disastrously so. For investors pricing in something worse, the bar was low—and Macy’s cleared it. With retail expectations already soft, even a modest beat on the bottom line was enough to spark relief.
Macy’s Sales Hold Steady, Store Overhaul Continues
The retailer held its sales guidance steady at $21 billion to $21.4 billion, with same-store sales expected to fall 0.5% to 2% year over year. That’s in line with prior guidance. What’s changing is how the company delivers those numbers—shifting store strategy, investing selectively, and streamlining operations.
Macy’s said it would continue closing underperforming stores under CEO Tony Spring’s “Bold New Chapter”turnaround plan. The company aims to shutter 150 locations, with over 60 already gone. At the same time, improvements are being rolled out across the core fleet, with early tests showing some traction.
Macy’s Trims the Fat — and It’s Starting to Work
In stores piloting new initiatives—around 125 locations—same-store sales dropped 1.3%, a narrower decline than the 2% fall across the company overall. Analysts were expecting a 3.9% drop, so the result marks a clear beat, if not yet a trend reversal.
CEO Spring said the Q1 results “give us confidence” that the strategy is on track. Macy’s is narrowing its focus: cutting stores, prioritizing select investments, and improving the customer experience in a slow push toward sustainable growth.
Is Macy’s a Good Stock to Buy?
Macy’s currently holds a Hold rating from analysts, with 10 out of 12 holding that line. Just one firm has issued a Buy, while one sits at Sell. The average 12-month M price target is $12.00, nearly flat from the stock’s latest close at $12.04.
Today’s report may push some of those ratings off neutral. The EPS beat and stabilizing same-store sales give the bulls something to work with. But the guidance cut and weak traffic trends could harden bearish sentiment. If the “Bold New Chapter” narrative keeps gaining steam, upgrades could follow. If not, Macy’s may stay right where it is—stuck in Hold territory, waiting for a real breakout.
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