By Brooke DiPalma

Macy's (M) continues to face questions about its future after the retailer beat muted first quarter earnings estimates on Wednesday morning.

Revenue fell 5.1% year over year to $4.6 billion, but topped analyst estimates of $4.46 billion. Adjusted earnings per share dropped 40.7% to $0.16, compared with expectations of $0.14.

Macy's same-store sales decreased 1.2% year over year, versus the 3.85% decline expected.

The company reaffirmed its sales guidance, but revised its 2025 earnings outlook due to uncertainty surrounding tariffs and consumer sentiment, and the competitive landscape.

Macy's now expects adjusted earnings per share of $1.60 to $2.00. It previously expected $2.05 to $2.25, which already missed consensus estimates of $2.31 and were lower than the $2.64 it clocked in 2024.

It still expects 2025 revenue in the range of $21 billion to $21.4 billion, below last year's $22.29 billion and missing estimates of $21.66 billion.

In the release, CEO Tony Spring said the results "give us confidence that we have the right strategy and team in place to navigate the current environment."

Same-store sales fell 0.8% at the 125 stores where Macy's recently invested in improving merchandise and service. Spring told Yahoo Finance he expects "momentum to build as the year progresses."

At its luxury chain Bloomingdale's and cosmetics retailer Bluemercury, same-store sales were up 3.8% and 1.5%, respectively.

Macy's reiterated that 2025 same-store sales are expected to decrease between 0.5% to 2% year over year, compared to the 0.71% increase that Wall Street anticipated.

Shares edged up 1% in premarket trading.

It could also face the return of activist investors. Arkhouse managing partner Gavriel Kahane told Yahoo Finance Executive Editor Brian Sozzi that he's still "frustrated" over how the situation turned out.

"Most shareholders are obviously ... woulda, shoulda, coulda mid-20s [share price]. The stock's trading in the low teens once again," Kahane said. He declined to say whether he would be taking another stab at Macy's. Arkhouse remains a shareholder, but Kahane would not disclose the size of its stake.

"Macy's is still publicly traded, still mispriced, and still in desperate need of someone coming in to save shareholders," he added.

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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

Source: Yahoo finance