A tough, highly promotional holiday season is ahead for sure, yet Macy’s Inc. expects to meet the challenge.
Gennette said that inventories will be in line by the end of the third quarter and remain so by the end of the fourth quarter. Retailers industry-wide have been grappling with bloated inventories due to lower consumer demand and supply chain issues easing.
For the quarter ended July 30, inflation, inventory gluts, markdowns and changing consumer behaviors dragged Macy’s Inc.’s net income down to $275 million, or diluted earnings per share of $0.99, from $345 million, or $1.08 a share, a year ago. “Add Macy’s to the list of retailers lowering guidance based on shifts in consumer spending and high inventory levels,” David Silverman, senior director, Fitch Ratings, said in a report. “While the company met its 2Q guidance, margin pressures are expected to reduce Macy’s earnings for the remainder of 2022 relative to prior expectations.
Macy’s marketing will aim to reinforce the store’s reputation as a gifting destination, particularly for Christmas, and will be playing up the rollout of Toys “R” Us shops inside all Macy’s department stores by Oct. 15, through a partnership with WHP Global which owns Toys “R” Us. Ultimately, Macy’s sees toys as a $1 billion volume opportunity.
Gennette saw no significant change in what’s been a depressed level of tourist shopping since the beginning of the pandemic.
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