Macy’s warns of discounts hitting annual profit as inflation saps demand
Reuters
Macy’s
The company joined other top retailers, including rival Kohl’s
Macy’s inventories were up 7% at the end of the second quarter, prompting the department store chain to warn of increased markdowns to get back to normal stock levels by the end of the year.
“We have seen declining retail traffic and areas of weakening apparel sales over the quarter as the consumer faces higher costs on essential goods, particularly grocery,” Macy’s Chief Financial Officer Adrian Mitchell said.
The company said it expects fiscal 2022 adjusted earnings of $4.00 to $4.20 per share, compared with its previous outlook of $4.53 to $4.95 per share.
Macy’s did not see any slowdown in spending from shoppers making more than $150,000, Chief Executive Jeff Gennette
Comparable sales at the company’s upscale Bloomingdale’s department stores rose 5.8% in the second quarter, while they rose 7.6% at its luxury beauty outlet Blue Mercury
However, comparable sales at Macy’s namesake stores fell 2.8%.
“These numbers are far from terrible, especially as they come off the back of a tough prior-year figure and have been delivered during a time of modest consumer distress,” Neil Saunders, managing director of GlobalData, said.
On an adjusted basis, Macy’s earned $1 per share, compared with estimates of $0.85, according to Refinitiv IBES data, sending the company’s shares up 3%.
