Macy’s profit and sales slid in the third quarter as the department store had to step up discounts amid a pullback from shoppers stung by inflation.
Yet, the New York company topped Wall Street expectations and raised its earnings outlook, in part due to better credit card revenue. Shares rose more than 12% Thursday.Shares of rival Kohl’s rose 2% after it withdrew its annual earnings outlook amid volatile spending, an uncertain economic environment and a CEO transition. Like Macy’s, it reported a drop in sales and profit, but beat Wall Street expectations.
It’s a different scenario compared with a year ago when shoppers were buying early because supply chain issues were delaying orders. There were few price cuts because inventories were lean. Sales slipped 3.9% to $5.23 billion from $5.44 billion in the year-ago period, but that also beat expectations. “We know the consumer is under increasing pressure and has choices on where to spend,” said Macy’s CEO Jeff Gennette.Gennette said the company’s upscale Bloomingdale’s store has also fared well as wealthy shoppers continue to spend.
But Americans dramatically shifted away from pandemic-fueled spending as the virus eased, and that has left a number of retailers with excess inventory that is now being sold at discounted prices. Elevated prices for food, rent, gasoline and almost everything else have also redirected spending toward necessities, which hurts clothing stores.
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