(Reuters) -Macy's raised its annual sales and profit forecasts on Wednesday, helped by resilient demand across banners including Bloomingdale's and Bluemercury chains as the retailer's turnaround plan takes shape.
Shares of the company were up about 7% in premarket trading.
Shedding some underperforming banners as part of its turnaround strategy and leaning into its pricier labels, which serve higher-income shoppers, helped Macy's offset any hit from pressured consumer spending amid macroeconomic uncertainty.
Inflation and the fallout from the Trump administration's volatile tariff policy have caused budget-conscious shoppers to seek more value and cut back on purchases, pressuring Macy's namesake outlets, which cater to that demographic.
CEO Tony Spring had proposed a turnaround plan in February last year that included closing 150 Macy's stores by 2026, reinvesting in high-potential locations, reducing operational costs and improving the company's product offerings and loyalty programs.
Macy's, however, faces import tariff risks from its reliance on manufacturing in China. In May, the company said it would increase prices selectively to soften the tariff impact on margins.
The company said on Wednesday its full-year outlook assumes that the consumer is more "choiceful" in the second half of 2025, and includes the anticipated impacts from existing tariffs.
Macy's expects annual adjusted profit per share between $1.70 and $2.05, compared with its prior target of $1.60 to $2.00.
Annual net sales are now expected between $21.15 billion and $21.45 billion, above its prior target of $21 billion to $21.4 billion.
For the second quarter ended August 2, the company reported its thirteenth consecutive net sales decline, a 2.5% fall to $4.81 billion, although it still beat analysts' average estimate of $4.76 billion, according to data compiled by LSEG.
It also reported comparable sales growth of 1.9% on an owned plus licensed basis, following 12 quarters of declines.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Alan Barona)
