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Macy's (M) continues to face questions about its future after the retailer beat muted first quarter earnings estimates on Wednesday morning.
Revenue fell 5.1% year over year to $4.6 billion, but topped analyst estimates of $4.46 billion. Adjusted earnings per share dropped 40.7% to $0.16, compared with expectations of $0.14.
Macy's same-store sales decreased 1.2% year over year, versus the 3.85% decline expected.
The company reaffirmed its sales guidance, but revised its 2025 earnings outlook due to uncertainty surrounding tariffs and consumer sentiment, and the competitive landscape.
Macy's now expects adjusted earnings per share of $1.60 to $2.00. It previously expected $2.05 to $2.25, which already missed consensus estimates of $2.31 and were lower than the $2.64 it clocked in 2024.
It still expects 2025 revenue in the range of $21 billion to $21.4 billion, below last year's $22.29 billion and missing estimates of $21.66 billion.
In the release, CEO Tony Spring said the results "give us confidence that we have the right strategy and team in place to navigate the current environment."
Same-store sales fell 0.8% at the 125 stores where Macy's recently invested in improving merchandise and service. Spring told Yahoo Finance he expects "momentum to build as the year progresses."
At its luxury chain Bloomingdale's and cosmetics retailer Bluemercury, same-store sales were up 3.8% and 1.5%, respectively.
Macy's reiterated that 2025 same-store sales are expected to decrease between 0.5% to 2% year over year, compared to the 0.71% increase that Wall Street anticipated.
Shares edged up 1% in premarket trading.
Here's what Macy's reported in its first quarter results, versus Bloomberg consensus estimates:
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Net sales: $4.6 billion, versus $4.46 billion
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Adjusted earnings per share: $0.16, versus $0.14
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Same-store sales growth: -1.2%, versus -3.85%
The retailer is facing multiple macro headwinds as consumer sentiment sags, costs rise with Trump's tariffs, and trends grow toward e-commerce and direct-to-consumer.
Last July, Macy's rejected a $6.9 billion bid from activist investor Arkhouse and its partner Brigade Capital. The offer valued the company at $24.80; the stock now trades around $12.
The spotlight will be on management as Spring, now more than a year into the job, opted for his plan for a turnaround. As part of the strategy, Macy's plans to close approximately 150 total stores in the next three years. At the end of Q1, there were 450 Macy's locations, compared to 503 a year ago.
