General
Macy’s Reports Lower Sales as Shoppers Cut Back
Department store chains have struggled as consumers, squeezed by budget constraints, spend less time and money at their stores.
Macy’s, the largest department store chain in the United States, on Wednesday predicted a tough consumer environment in the months ahead as shoppers pull back their spending.
Macy’s lowered its guidance for the rest of the year, now expecting the top range of its net earnings for the year to be down 2.2 percent to $22.4. billion.
The retailer said overall comparable sales, a metric for stores open more than a year, fell 4 percent in the second quarter for all of its brands, which includes Bloomingdale’s and Bluemercury. The company expects comparable sales to decline by as much as 2 percent compared with 2023.
In a statement on Wednesday, Tony Spring, Macy’s chief executive, described the consumer environment as “challenging.”
The glum outlook comes a week after Walmart reported that sales at its U.S. stores rose just over 4 percent, to $115.3 billion, as its customers were attracted to lower prices and the ease of receiving their merchandise.
Bloomingdale’s, which Macy’s sees as a growth area for the company, posted a sales decrease for the quarter, while Bluemercury reported a sales increase of 1.7 percent.
Earlier this year, Mr. Spring unveiled a turnaround plan for Macy’s meant to improve sales, profitability and overall performance, which included shuttering 150 low-performing stores over three years. The closures amounted to 25 percent of its square footage, he said, but those locations brought in just 10 percent of overall sales.
“We are seeing signs of our strategy taking root,” Mr. Spring said in the statement.
Department store chains have been trying to find a way forward as consumers, squeezed by budget constraints, spend less time and money at their stores. Adding to their challenges, the division between retailers like Walmart that sell groceries and other chains is becoming more clear as shoppers become increasingly discerning about what they buy.
Macy’s did signal some bright spots in its business. It said comparable sales at the 50 locations that represent the company’s future, based on geography, staffing and other factors, rose 0.8 percent. That’s the second consecutive quarter of growth for that segment.
Comparable sales at the roughly 350 locations it planned to keep open were down 2.4 percent. Sales at the stores it plans to close were down 6.5 percent.
Last week, analysts and investors received signs that U.S. consumer spending has remained resilient. U.S. retail sales in July rose and were above expectations. Some of the categories that saw a decline this year in sales were department stores, furniture, hobby shops and retailers that sell building materials.
Still, Americans are becoming less optimistic about their financial situation, even as they expect inflation to cool, according to a survey from the University of Michigan’s Survey of Consumers.
