US department store giant Macy's shares deepen declines, losing 5% 📉

Shares of one of the biggest US departments stores, Macy's (M.US) lose almost 5% today, despite a rebound across the US indices. The company confirmed a closing of 150 US-based stores because of falling sales, consumer behavior shift, and disrupting e-commerce shopping trend. Investors fear that the economic slowdown triggered by tariffs policy and trade war will pressure consumers even more, pressuring Macy's sales. 

Macy’s stock is facing increased scrutiny from analysts as concerns mount over its weaker-than-expected performance and cautious outlook for fiscal year 2025. TD Cowen has lowered its price target on the retailer from $16 to $14, citing disappointing comparable sales and a subdued earnings forecast. The company reported a -1.1% decline in comparable sales, missing the estimated -0.2% decline.

Looking ahead, Macy’s expects its full-year FY25 EPS guidance to fall 7% below the midpoint of analysts’ expectations, reflecting a challenging retail landscape. The company anticipates comparable store sales (OLM comps) to range between -2.0% and -0.5% for the year, with a particularly weak first quarter in which comps are projected to drop between -4.5% and -2.5%.

The ongoing pressure on foot traffic and the need for aggressive promotions to drive conversions remain key concerns for investors. Other major investment firms have followed suit in adjusting their price targets:

• Telsey Advisory Group revised its target to $15.
• Citi and JPMorgan both cut their targets to $14, with JPMorgan also downgrading the stock from Overweight to Neutral.
• CFRA took an even more cautious stance, slashing its price target to $13 while maintaining a Hold rating, warning of structural challenges in the department store sector.

Macy’s now faces a difficult path forward, with analysts signaling long-term headwinds in the traditional retail landscape and growing competition from e-commerce. Investors will be closely watching the company’s ability to manage inventory, sustain margins, and navigate evolving consumer trends in the months ahead.

Macy's (M.US, D1 interval)

As for now, Macy's shares are almost 25% below EMA200 (the red line), signalling a bearish trend reversal after the strong rebound in 2024, fuelled by 'soft landing' expectations. Macy’s currently trades at a P/E ratio of 6x and offers a substantial dividend yield of almost 5.5%. 

Source: xStation5