Macy's forecasts weak annual sales, profit; sees tariff relief

March 18 (Reuters) - Macy's M.N on Wednesday forecast weaker annual revenue and profit due to tight consumer spending, and said it expects the impact from U.S. import tariffs to ease in the second half of the year.

Retailers from Walmart WMT.O to Kohl's KSS.N have also taken a cautious approach for the year amid the fragile state of the U.S. consumer.

Macy's said it was taking a "prudent approach" to its outlook, citing macroeconomic and geopolitical risks that could affect consumer spending.

CEO Tony Spring has been trying to turn around the department store operator by attracting wealthier shoppers to revive demand, while price-sensitive consumers remain pressured by inflation and economic uncertainty.

The retailer expects 2026 net sales of $21.4 billion to $21.7 billion, down from $21.8 billion in 2025. Analysts were expecting $21.42 billion, according to data compiled by LSEG.

It also forecast annual adjusted profit between $1.90 and $2.10 per share, compared with $2.15 a year earlier and analysts' average estimate of $2.17.

The company said tariff pressures could weigh on margins in the first half of the year, with the largest impact expected in the first quarter.

Macy's reliance on manufacturing in China exposes it to import duties. While Washington has moved to a uniform 10% tariff following a Supreme Court ruling that struck down broader U.S. levies, companies could still face near-term pressures from inventories sourced at higher rates.

For the fourth quarter, Macy's sales fell 1.7% to $7.64 billion from a year earlier, but topped analysts' average expectations of $7.62 billion, helped by holiday demand.

Sales at the Macy's brand declined 3.2%, including the impact of store closures, though comparable sales rose 0.4%. Higher-end brands performed better, with Bloomingdale's posting sales growth of 8.5% and Bluemercury rising 2.5%.