Macy’s forecast could get worse – It came out pre-tariff list
The Trump administration’s latest rounds of Chinese tariffs finally hit Macy’s Inc. where it hurts.
The department-store chain, which had already weathered the first few rounds of levies, says it won’t be so lucky with the latest waves. The U.S. on Friday raised tariffs on some $200 billion in Chinese goods to 25% from 10% previously, then on Monday released a new list of goods slated for their own 25% hit.
“It is hard to do the math to find a path that gets you to a place where you don’t have a customer impact,” Chief Executive Officer Jeff Gennette said on an earnings call Wednesday, describing the U.S.-China trade negotiations as a “stay tuned” situation.
The shares, which had jumped earlier, reversed course amid the tariff comments. They fell as much as 1.5% to $21.47 Wednesday after having been up as much as 4%.
The first rounds of tariffs put into effect last year focused more on industrial and agricultural items as the Trump administration tried to avoid the backlash that taxing consumer goods might bring. But the list of products that saw its rate bumped up to 25% on Friday also included some consumer items like handbags and furniture – Macy’s staples. The most recent list on about $300 billion of imports is full of the consumer items that dominate Macy’s showroom floors: clothing, shoes and household goods.
Gennette said the first rounds had “no meaningful impact,” but the third round is hitting furniture and the fourth round could hurt its private-label and national brands. The company said it full-year guidance – which it held steady on Wednesday – did not take into account the latest round of tariffs, which still needs to go through a public comment period.
He said the chain is working to move some production out of China, and it’s having negotiations with its national brand partners about how to handle the next round of potential tariffs.
–With assistance from Lisa Wolfson.
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