Retail’s Tariff Tug-Of-War Splits Earnings As Abercrombie Surges While Macy’s Slashes Guidance

When life gives you tariffs, some retailers make lemonade while others raise prices. The passing quarter’s mixed results revealed the first major earnings cycle to fully reflect tariff impacts. With the SPDR S&P Retail ETFXRT

down 3.8% YTD (vs. the S&P 500’s +0.34%), the sector’s divergent strategies set the stage for the future of consumer pricing.

• Dick’sDKS
  , Macy’sM
  , and AbercrombieANF
  posted Q1 beats — with the latter surging up to 34% yesterday despite cutting its profit outlook amid a $50M tariff blow.
• With ~20% of its merchandise sourced from China,M
  slashed its 2025 EPS and announced price hikes — whileDKS
  buys a battered Foot LockerFL
  amid its sustained outlook.

Crunch control: While 72% of US companies report increased tariff costs, over 90% still expect international growth within two years, per an HSBC survey. Retailers are pivoting with purpose, as 44% explore domestic sourcing, and 64% adopt new technologies rather than retreat. “This optimism, and the fact they are really looking to see how creatively they can grow and pivot, is really unique,” says an HSBC global trade head, referring to American businesses. The Founding Fathers would be proud of this entrepreneurial spirit.