U.S. retail chain giant lowers profit outlook over tariff concern

NEW YORK, May 28 (Xinhua) -- U.S. department store chain Macy's lowered its full-year profit forecast on Wednesday, citing the growing financial strain from surging tariffs.

Macy's CEO Tony Spring said the company will take a targeted approach to raising prices and may stop carrying certain products altogether, as it works to offset tariff-related cost increases. About 20 percent of Macy's merchandise comes from China, the CEO said, which makes the retail chain giant particularly vulnerable to trade policy shifts.

For fiscal 2025, Macy's now expects adjusted earnings per share to be between 1.60 and 2.00 U.S. dollars, down from its previous forecast of 2.05 to 2.25 dollars.

Spring told CNBC that tariffs alone account for 15 to 40 cents of the company's revised earnings-per-share guidance.

Although the company reaffirmed its full-year sales forecast of 21.0 to 21.4 billion dollars, the number would still be a decline from the 22.29 billion dollars reported last year.

Spring emphasized that Macy's will be "surgical" in its pricing approach. "It's not a one-size-fits-all kind of approach," he said. "Some items will remain at last year's prices, others may be more expensive, and some may be eliminated if the value no longer aligns with customer expectations."

He added that the company is navigating both demand-side uncertainty and increased costs, and its guidance reflects the need to remain flexible in a volatile environment shaped by shifting tariff policies.

Tariff headwinds arrive as Macy's continues a three-year transformation plan to streamline operations and boost profitability. The company is in the process of closing about 150 underperforming Macy's stores by early 2027 while investing in stronger brands such as luxury department store Bloomingdale's and beauty chain Bluemercury.

Speaking on the company's March earnings call, Spring acknowledged that even Macy's more affluent customers were expressing concern. "They're just as uncertain, confused, and concerned by what's transpiring," he said.

Macy's stock has fallen about 29 percent year to date, trailing the S&P 500's nearly 1 percent gain. Shares closed on Tuesday at 12.04 dollars and then dropped more than 3 percent in the morning session on Wednesday. Enditem