Macy’s is facing tough times, cutting its profit forecast for the year amid rising tariffs and worries over consumer spending. To tackle these challenges, CEO Tony Spring has outlined four key actions aimed at turning the business around.
The Four Key Steps Macy’s Is Taking
- Source fewer goods from China
- Negotiate better deals with suppliers
- Get vendor discounts and cancel some orders
- Absorb cost increases where needed
These moves come as Macy’s battles the effects of new import fees introduced under President Donald Trump’s tariffs.
Tony Spring told Wall Street analysts, “Given uncertainty regarding the tariff impact on consumer health and demand, we believe it’s prudent to incorporate a more choiceful consumer into our outlook for the quarter and for the remainder of the year.”
Price Increases on the Horizon
Outgoing CFO Adrian Mitchell warned that some price hikes are inevitable. “We’re making selective price increases in selective brands and categories because we believe the value equation for the customer is still very relevant,” he said.
Store Closures and Supply Chain Restructuring
As part of Macy’s ongoing turnaround plan, the company is shrinking its store footprint and supply chain. So far, 64 stores have been closed, with 86 more planned to shut by 2027.
The company has also sold some real estate, earning $16 million in asset sales to “rightsize” its operations.
Improving Remaining Stores
Macy’s has revamped 125 of its stores with new product mixes and additional staff. These “reimagined” locations are performing better than the rest of the chain.
Financial Outlook
In the first quarter, Macy’s net sales fell 5.1% year-over-year to $4.6 billion. The company expects total sales between $21 billion and $21.4 billion in 2025.
Retail analyst Neil Saunders noted that Macy’s numbers aren’t as bad as some might think. “The 5.1% decline includes ongoing store closures,” he said. “While Macy’s won’t grow, it won’t be at the bottom of the retail league table.”
Luxury Brands Show Strength
Macy’s luxury chains, Bloomingdale’s and BlueMercury, actually saw sales rise amid the broader challenges.
Preparing for Upcoming Seasons
Spring mentioned plans for markdowns on early spring products that arrived late, which may reduce margins but help freshen up offerings for summer and holiday seasons.
He also signaled a big overhaul in Macy’s product line, including canceling or delaying orders from China because of tariffs — meaning some favorite items might no longer be available.
