(Reuters) – Macy’s on Thursday lowered its full-year revenue and profit guidance on slowing demand for high-end products and higher price-related discounts. inflation that remains high.
Macy’s forecasts 2023 revenue of $22.8 billion to $23.2 billion, down from a previous forecast of $23.7 billion to $24.2 billion.
Adjusted earnings per share for the full year are expected to be between $2.70 and $3.20, versus $3.67 to $4.11 per share previously forecast.
Macy’s title fell 3.1% at 2:00 p.m. GMT on Wall Street.
The company said it would implement further discounts in the second quarter to clear its spring and early summer inventory as consumer spending weakens. In the last quarter, Macy’s planned to reduce sales.
The general rise in prices is impacting purchases at high-end retailers such as Macy’s, as consumers turn to more accessible brands.
Last week, its counterpart Kohl’s Corp, which also caters to a less affluent clientele, also noted a weakening in consumer spending after posting a bigger-than-expected decline in quarterly sales.
The unemployment rate remains low in the United States, which raises fears of a further hike in interest rates to control inflation. Consumers could thus be encouraged to further restrict their spending and focus on essential purchases.
Other major U.S. companies, including Target and Home Depot, also lowered their full-year outlook in response to weaker demand.
Meanwhile, upscale department store Nordstrom posted a surprise first-quarter profit on Wednesday, thanks to better inventory control and demand from affluent shoppers.
(Report Ananya Mariam Rajesh in Bangalore; French version Victor Goury-Laffont, edited by Kate Entringer)
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