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The company joined other top retailers, including Kohl’s Corp (NYSE:KSS) and Target Corp (NYSE:TGT), in warning of a hit to profitability in recent weeks, as soaring prices of everyday goods made Americans wary of spending on apparel and other discretionary items.
Macy’s (NYSE:M) inventories were up 7% at the end of the second quarter, compared with a year earlier, prompting the department store chain to warn of increased markdowns to get back to normal stock levels by the end of the year.
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.
However, demand for formal and party-wear from middle- and high-income shoppers returning to social events stayed strong, as they still remain relatively insulated from the effects of decades-high inflation.
Comparable sales at Macy’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% in the reported quarter.
On an adjusted basis, the company earned $1 per share, compared with estimates of $0.85, according to Refinitiv IBES data, sending the company’s shares up about 2% in premarket trading.
Macy’s forecast 2022 net sales of $24.34 billion to $24.58 billion, compared with its previous forecast of $24.46 billion to $24.70 billion.
