Investing.com -- JP Morgan downgraded Macy’s Inc to Neutral and cut its price target to $14, citing weaker-than-expected same-store sales guidance and profitability concerns amid ongoing store closures.

Macy’s reported Q4 adjusted EPS of $1.80, surpassing Wall Street’s $1.54 estimate, helped by strong credit income and media revenue. However, the retailer’s 2025 outlook disappointed, with same-store sales expected to decline 0.5% to 2.0%, well below consensus projections.

First-quarter EPS guidance of $0.12-$0.15 also came in significantly under the $0.27 Street estimate.

JP Morgan noted that Macy’s core retail operating income is expected to turn negative in 2025 as store closures and weaker sales pressure margins.

While management plans to revamp 125 stores, representing 36% of its remaining fleet, additional closures beyond the 150 planned locations could further strain long-term profitability.

The firm highlighted macroeconomic risks, including tariffs and layoffs, as additional headwinds. It also expressed concerns over Macy’s ability to return to sustained sales growth, delaying the retailer’s turnaround efforts.