Macy’s lowers outlook as sales weaken, shares drop

BLOOMBERG

Macy’s Inc said earnings will be weaker than previously expected for the full-year, underscoring the uncertainty around US consumer spending through the remainder of 2023.
The department-store retailer said it would take markdowns and other measures to address excess spring merchandise in order to meet current consumer demand. It lowered sales guidance to “reflect anticipated macroeconomic impacts to the consumer,” the company said.
“We planned the year assuming that the economic health of the consumer would be challenged, but starting in late March, demand trends weakened further in our discretionary categories,” Chief Executive Officer Jeff Gennette said in a statement.
Same-store sales at the Macy’s namesake brand sank 8.7% on an owned basis, while the higher-end Bloomingdale’s dropped 3.9% and Bluemercury rose 4.3%.
Gennette said on a call with analysts that roughly 50% of Macy’s brand customers make less than $75,000 per year, which is why the decline in sales at those stores was the most prominent.
The company also noted that credit card revenue was challenged by higher bad debt within the portfolio, a further sign of consumer weakness.
Bright spots in the quarter were beauty, fragrance and office clothing, and there’s limited price resistance in luxury “even in the current environment,” said Tony Spring, Macy’s president.
Spring will replace Gennette after his retirement next year.