U.S. retailer Macy's cuts forecasts on weak consumer spending, macro downturn

NEW YORK, Aug. 23 (Xinhua) -- U.S. major retailer Macy's on Tuesday cut its forecasts on annual operating results due to risk from continued deterioration of consumer discretionary spending, level of inventory in the industry as well as risks associated with a more pronounced macro downturn.

Macy's expects to realize 24.34 billion to 24.58 billion U.S. dollars of net sales in the current fiscal year ending in January-end of 2023, lower than the earlier forecast range of 24.46 billion to 24.7 billion dollars presented on May 26.

Macy's also slashed its forecast of adjusted diluted earnings per share in the fiscal year to 4-4.2 dollars from 4.53-4.95 dollars.

"This outlook reflects a careful view of the impacts of the pressures faced by the consumer and those placed on the business given the weakening macro environment," said Macy's in a statement.

The latest outlook also factors in the markdowns and promotion to liquidate aged inventory and further reduce the merchandise category stock to sales imbalances by the end of the year, according to Macy's.

Macy's posted 5.6 billion dollars of net sales in the quarter ending July 30, lower than 5.647 billion dollars in the same period of last year, according to data issued by Macy's on Tuesday.

Macy's gross margin for the last quarter fell to 38.9 percent from 40.6 percent in the same period of 2021, driven by a year-over-year increase in permanent markdowns within the Macy's brand and higher delivery expense as a percent of net sales.