People shop at Macy's Herald Square store in New York, the United States, Nov. 26, 2021. (Xinhua/Wang Ying)
It seems that Americans continue to spend, but they're becoming more selective and more likely to wait for sales.
NEW YORK, May 21 (Xinhua) -- Macy's Inc. saw its stock rise by 5.13 percent on Tuesday after the U.S. retail giant reported stronger-than-expected sales for the first quarter of the current fiscal year ending May 4, 2024.
The company's net sales fell 2.7 percent to 4.85 billion U.S. dollars, the eighth-straight quarter of declines, but was just above the FactSet consensus of 4.82 billion dollars.
Macy's also reported a year-over-year decline in quarterly revenues, which the company attributed to the ongoing pressure of rising prices affecting consumer spending habits.
Macy's Chief Executive Tony Spring acknowledged the challenging economic environment. "Our customers across all three nameplates continue to benefit from strong wage and job growth. However, inflationary pressures persist and they're feeling that pinch," he said.
"The outlook provided on our fourth quarter earnings call as well as today's update assumes our customers will continue to carefully scrutinize their discretionary purchases," said Spring.
It seems that Americans continue to spend, but they're becoming more selective and more likely to wait for sales. For instance, Bloomingdale's saw weaker sales in luxury handbags and shoes as consumers opted for more affordable collections.
Spring also mentioned that higher-income customers are focusing on their interests and passions, while lower-income customers are increasingly prioritizing rent and family obligations.
Meanwhile, same-store sales of Macy's branded stores were down 1.6 percent, while sales at Bloomingdale's stores increased by 0.8 percent and at Bluemercury stores were up 4.3 percent. "Turning to luxury, Bloomingdale's and Bluemercury continue to be bright spots within our portfolio," Spring added.
The U.S. retail sector is feeling the pinch as inflation continues to drive up costs, leading to cautious spending among consumers. In response, some companies are taking bold steps to attract budget-conscious shoppers. Target Corp. also announced a significant price cut across a wide range of products in a bid to boost foot traffic and capture market share. The lowering of prices is expected to "collectively save consumers millions of dollars" on household staples and everyday items such as milk, fresh fruit, diapers and even pet food.
Despite the revenue drop, Macy's highlighted several positive aspects of its quarterly performance. The company's comparable sales fell 1.6 percent on an owned basis, and were down 0.4 percent on an owned-plus-licensed-plus-marketplace basis. Additionally, Macy's emphasized its successful cost management initiatives, as the selling, general and administrative expense dropped by 39 million dollars to 1.9 billion dollars in the quarter.
Looking ahead, Macy's reaffirmed its full-year guidance. For fiscal 2024, Macy's revised its full-year guidance ranges for adjusted EPS to 2.55-2.90 dollars from 2.45-2.85 dollars and for net sales, to 22.3-22.9 billion dollars from 22.2-22.9 billion dollars. ■
