(NEW YORK) — Macy’s slashed its full-year profit forecast on Wednesday, attributing the downbeat expectations in part to tariffs imposed by President Donald Trump.
The New York-based retail chain is the latest major company to warn of ill effects from the levies, including Target, Walmart and Nike.
Macy’s downgraded its expectations for adjusted earnings per share from a range of $2.05 to $2.25, instead saying the metric is likely to register between $1.60 to $2.00.
In addition to tariffs, Macy’s faulted flagging consumer spending and heightened competition.
The earnings release arrives more than a year after the company embarked on a three-year plan to improve its balance sheet by closing its low-performing stores and optimizing its e-commerce service.
The nationwide retailer said last year that it plans to close about 150 stores by 2027.
Macy’s brought in $4.6 billion in revenue over a recent three-month period, exceeding the company’s expectations, according to the earnings release.
“We continued to execute against our Bold New Chapter strategy during the quarter, scaling key initiatives that improved our customer experience and contributed to stronger than expected performance across all three of our nameplates,” CEO Tony Spring said in a statement on Wednesday.
The tariff escalation in recent weeks poses a challenge for Macy’s, however.
Trump earlier this month slapped 30% tariffs on China, a key source of apparel imports for the retail chain. The levies mark a deescalation from a previous 145% levy on China, but the tariffs remain well above levels prior to Trump’s second term.
Roughly 20% of Macy’s merchandise originates in China, Spring told CNBC.
The tariffs helped propel a monthslong stretch of souring consumer sentiment, which also threatens the bottom line of sellers like Macy’s.
However, a Conference Board survey released on Tuesday showed a brightening of consumer attitudes in May, suggesting that consumer appetites had rebounded as Trump rolled back some tariffs.
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