Macy’s shares surged 20% after announcing raised annual sales and profit forecasts, despite tariff uncertainty. The department store operator’s turnaround plan involved closing underperforming stores, focusing on higher-income shoppers, and improving loyalty programs, all contributing to offsetting consumer spending pressures amid economic uncertainty.

CEO Tony Spring introduced the turnaround plan last year, aiming to close 150 Macy’s stores by 2026, reinvest in high-potential locations, and enhance product offerings. Despite a projected drop in holiday spending, Macy’s remains confident in its sales recovery, with positive early indicators in customer purchases.

Macy’s expects a larger tariff-related hit on its full-year gross margins, anticipating pricing increases and negotiations with suppliers to mitigate the impact. The company had previously warned about selective price increases to counter the tariff challenges posed by reliance on manufacturing in China.

Macy’s now anticipates annual adjusted profit per share between $1.70 and $2.05, up from the previous target of $1.60 to $2.00. The company also raised its net sales forecast to be between $21.15 billion and $21.45 billion, reflecting a positive outlook amidst intense competition in the retail sector.

EMarketer analyst Suzy Davidkhanian praised Macy’s bold move in raising forecasts, highlighting the challenging retail landscape and tighter budgets intensifying competition. The company reported $4.81 billion in net sales for the second quarter, surpassing analysts’ expectations, with an adjusted profit of 41 cents per share, outperforming estimates of 18 cents.

Read more at Yahoo Finance: Macy’s turnaround progress boosts annual forecasts, shares jump