With sales declining in the first quarter in an increasingly challenging economic environment, including persistently high inflation, Macy’s reduced its outlook for the entire year.
As sales started to sag in March, quarterly profit and sales decreased, leading the New York department store to lower the price of clothing and other discretionary items.
Before the opening bell on Thursday, shares fell more than 10%, dragging down other merchants with them.
In contrast to the 45 cents Wall Street was expecting, Macy’s reported a net income of $155 billion, or 56 cents per share, a considerable decrease from the $286 million made during the same period the previous year.
Sales decreased to $5.17 billion, lower than analyst expectations and the $5.56 billion recorded in the first quarter of last year.
Comparable sales, which include deals from licensed companies like cosmetics and stores open for at least a year, decreased by 7.2% across all categories.
CEO Jeff Gennette stated in a written statement, “We have moved promptly to make the proper adjustments to meet current consumer demand and control our expenses.
According to Gennette, the updated outlook considered inventory reductions to account for the consumer slowdown and clearance markdowns on seasonal spring products in the second quarter.
Instead of the previous forecast of between $3.67 and $4.11 per share, the company anticipates $2.70 to $3.20 per share for the year.
Sales are expected to be between $22.8 billion and $23.2 billion this year, down from the previous range of $23.7 billion to $24.2 billion, according to the firm.
Analysts projected $23.73 billion in revenue and $3.69 per share earnings.
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