NEW YORK (AP) — Macy’s profit and sales slipped in the second quarter with the department store grappling with customers that have grown cautions about spending, as well as higher costs from President Donald Trump’s tariffs.
Yet the New York retailer raised its outlook for the year after beating Wall Street expectations and it posted its best comparable store sales in three years. The surprisingly strong same-store sales figure underscores Macy’s efforts to improve customer service and its merchandise.
Shares jumped 10% before the opening bell Wednesday.
Macy’s is grappling with an uncertain economic backdrop, particularly because of the tariffs, and said Wednesday that it remains cautious for the year.
The company, which also runs Bloomingdale’s and the cosmetics chain Bluemercury, said in May that it was diversifying the origin of the products it imports and pulling items when the math doesn’t work.
About 20% of the department store’s products came from China at the end of its last fiscal year, according to Macy’s. Private brands sourced approximately 27% from China, down from 32% last year.
Macy’s reported net income of $87 million, or 31 cents per share, for the quarter ended Aug. 2. That compares with $150 million, or 53 cents per share, in the year-ago period. Adjusted earnings were 41 cents a share, well above the 19 cents per share estimated by FactSet.
Sales fell to $4.99 billion from $5.09 billion in the year-ago period. Analysts expected $4.7 billion, according to FactSet.
Comparable sales rose 1.9 percent for all of its stores, including its licensed business.
The retailer has invested heavily in modernizing Macy’s locations, and that appears to be working. Macy’s first 125 revamped stores achieved comparable sales growth of 1.4%, surpassing the 1.2% gain for all Macy’s stores.
For the year, Macy’s raised its earnings per share forecast to a range of $1.70 to $2.05, up from $1.60 to $2.
Macy’s also expects sales between $21.15 billion and $21.45 billion in 2025, up from $21 billion to $21.4 billion.
Wall Street has been projection per-share earnings of $1.79 on sales of $21.18 billion for the year, according to FactSet.
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