Macy’s officials indicated on Wednesday that the company is set to increase prices on certain products as a result of global tariffs.
During an earnings call, CEO Tony Spring, who has been leading the company’s recovery efforts since last year, stated that Macy’s is actively reducing its reliance on China. The retailer is renegotiating supplier contracts and making decisions to cancel or postpone orders where the value does not align with expectations, all to mitigate the tariffs’ impact.
Chief Financial Officer Adrian Mitchell emphasized that the company is adopting a “surgical” approach to these tariffs, selectively raising prices in specific categories and brands that still offer strong value to customers.
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This announcement adds to the challenges facing Macy’s, which has struggled to adapt to rapid shifts in the retail landscape and fierce competition, leading to the development of a new strategic plan last year aimed at restoring profitability.
According to Spring, the company is paying close attention to developments in Southeast Asia and Europe, noting limited sourcing from Canada and Mexico. He mentioned, “In this evolving environment, we are taking control of the factors within our reach based on actions implemented as of today and our assumption that current tariffs will persist.”
However, Mitchell acknowledged that tariffs would still exert some pressure on the company’s gross margin in the coming year, estimating a potential impact of 20 to 40 basis points. This outlook includes inventory purchased under the previously imposed 145% tariff on Chinese goods established in April.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| M | MACY’S INC. | 12.04 | +0.47 | +4.06% |
As a result of tariffs, alongside a slowdown in consumer discretionary spending and increased promotional competition, the company has lowered its full-year profit guidance.
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Macy’s now expects adjusted earnings per share to fall between $1.60 and $2, compared to a previous forecast of $2.05 to $2.25 for fiscal 2025. The retailer maintains its full-year revenue guidance at between $21 billion and $21.4 billion, reflecting a decline from the year prior.
Macy’s is among several retailers grappling with the repercussions of the ongoing trade war. In a previous week, Target reported a decline in revenue that fell short of expectations and revised its annual outlook, citing similar tariff-related uncertainties. The company had previously cautioned that it would experience year-over-year profit challenges in the first quarter as a direct result of these tariff issues.
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Walmart has also expressed concerns about forthcoming price increases amidst the substantial tariffs currently in effect.
“Even with the reductions announced this week, the reality of narrow retail margins makes it challenging to absorb all the pressures,” remarked Walmart CEO Doug McMillon.
This statement drew criticism from former President Donald Trump, who took to Truth Social to suggest the company should “eat the tariffs.”
