Aug 23 (Reuters) – Macy’s on Tuesday slashed its full-year sales and profit forecasts and said it was instituting inventory rebates, including for casual and leisure wear, even though demand continues for luxury goods.
Like other major retailers like Kohl’s and Target, the company has warned that a decline in profitability was expected in recent weeks as soaring prices of daily necessities prompted Americans to cut spending. in clothing and other discretionary items.
Macy’s inventory was up 7% at the end of the second quarter, compared to a year earlier, prompting the department store chain to announce increased markdowns, aiming to return to normal levels by the end of the year.
The company said it expects adjusted earnings of $4.00-4.20 (4.03-4.23 euros) per share for fiscal 2022, down from its earlier guidance of 4.53-4. $.95 per share.
However, for evening and formal wear, demand from middle-to-upper-income buyers remained strong, driven by the resumption of social activities, as these consumers were still shielded from the effects of inflation.
Comparable sales at Macy’s Bloomingdale’s upscale department store rose 5.8% in the second quarter, and 7.6% for its luxury cosmetics chain Blue Mercury.
However, comparable store sales at Macy’s namesake stores fell 2.8% in the quarter under review.
The company earned $1 a share on an adjusted basis, versus estimates of $0.85, according to Ibes data from Refinitiv, driving the stock up about 2% in premarket trading.
Macy’s forecasts 2022 net revenue of $24.34 billion to $24.58 billion, up from $24.46 billion to $24.70 billion previously. (Reportage Uday Sampath in Bangalore, French version Augustin Turpin, edited by Kate Entringer)