Macy’s cuts its annual net sales forecast to $22.1-$22.4 billion, citing weak U.S. consumer spending on discretionary goods, leading to a 10% drop in shares.
Bollywood Fever: Macy’s lowered its annual net sales forecast on Wednesday, as ongoing weakness in U.S. consumer spending dims hopes of a recovery in demand for big-ticket discretionary goods. The announcement led to a 10% drop in the company’s shares during premarket trading.
Macy’s now projects annual net sales to be between $22.1 billion and $22.4 billion, down from its previous estimate of $22.3 billion to $22.9 billion. This revision reflects the broader challenges in the retail sector, as high borrowing costs continue to weigh on consumer spending.
The weak outlook echoes similar sentiments from other major retailers. Home Depot reported a downbeat forecast, and Amazon showed slowing sales growth this quarter, both underscoring the persistent softness in demand for pricier discretionary items.
In response, Macy’s has been forced to offer deeper discounts in certain categories to attract budget-conscious consumers, particularly in the lower and middle-income brackets. These discounts have hurt the company’s profit margins, despite the benefits of a cost-savings plan implemented by new CEO Tony Spring.
Macy’s second-quarter net sales fell 3.8% to $4.94 billion, missing analysts’ expectations of a smaller 0.23% decline to $5.12 billion, according to data from LSEG.
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