Macy’s 2025 Sales and Profit Forecasts

(Reuters) – In a significant announcement on Thursday, Macy’s projected its annual sales and profit for 2025 to fall below Wall Street’s expectations. This forecast aligns with a broader trend among U.S. retailers, who are grappling with soft consumer demand amid ongoing economic uncertainty.

Economic Factors Impacting Retail

The department-store chain, which relies heavily on sourcing a substantial portion of its self-branded goods from China, is bracing for challenges ahead. The newly announced tariffs by President Donald Trump are expected to add further strain on American households, which are already facing tight budgets. As a result, consumers are becoming increasingly cautious about their spending habits, particularly when it comes to apparel and accessories.

Retailers’ Cautious Outlook

Macy’s is not alone in its concerns. Major retailers, including Walmart and Target, have also issued cautious forecasts for the upcoming year. They are worried about potential price hikes across various product categories, including food, automobiles, and electronics. Such increases could deter consumers from making purchases, further impacting overall retail sales.

Macy’s Sales Projections

Specifically, Macy’s anticipates net sales for 2025 to range between $21 billion and $21.4 billion. This projection falls short of the average analyst estimate of $21.81 billion, as reported by LSEG. The company’s CEO, Tony Spring, who has been at the helm for just over a year, is actively working on a turnaround strategy for the struggling department-store chain.

Store Closures and Strategic Growth

As part of this strategy, Macy’s plans to close 150 stores by 2026. This decision reflects a shift in focus towards enhancing profitability and streamlining operations. In contrast, the company is also betting on growth through its luxury divisions, Bloomingdale’s and Bluemercury. These segments have shown promising results, with comparable sales on an owned basis rising by 4.8% and 6.2%, respectively, in the most recent quarter.

Consumer Behavior Trends

The current retail landscape is marked by shifting consumer behavior. As economic conditions fluctuate, shoppers are becoming more selective about their purchases. This trend is particularly evident in discretionary spending categories, where consumers are holding off on buying non-essential items.

Looking Ahead

As Macy’s navigates these challenges, the company remains committed to adapting its business model to meet changing consumer demands. The focus on luxury segments and strategic store closures is part of a broader effort to position the brand for future success.

For more detailed insights on Macy’s forecasts and the current retail climate, you can read the full article here.