Macy’s Inc cut its full-year earnings and profit forecast after experiencing a slowdown in demand for its high-end products. The retailer’s shares declined by 7% on Thursday morning.
The department store company is now expecting its full-year sales to be between $22.8 billion and $23.2 billion, reduced from its previous annual forecast in the range of $23.7 billion to $24.2 billion. Adjusted full-year profit is expected to be between $2.70 and $3.20 per share, compared to its previous forecast of $3.67 to $4.11 per share.
Having already ramped up its discounts as consumers remain affected by heavy inflation, Macy’s revealed that it will need to increase its discounts further in the second quarter in order to clear out its spring and summer inventories as consumer spending continued to dwindle. This contrasts the company’s intention last quarter to reduce its promotional activities.
With food prices and rentals continuing to rise, customers are now viewing high-end products that are offered by the likes of Macy’s as lower down on their lists of priorities.