Macy’s Cuts Earnings Outlook as Markdown Season Looms
lowered its full-year sales and earnings outlook, citing a pullback in discretionary spending and an industrywide inventory glut that will drive more markdowns and promotions.
The retailer on Tuesday trimmed its net sales forecast to between $24.34 billion and $24.58 billion, from a range of $24.46 billion to $24.7 billion. It now expects earnings of between $4 and $4.20 a share, compared with its prior forecast of between $4.53 and $4.95 a share.
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Macy’s said the new outlook reflects a continuing downshift in consumer discretionary spending and swollen inventory levels seen across the retail industry, from clothing to electronics.
The revision comes despite Macy’s posting better-than-expected results for its second quarter. Sales fell slightly to $5.6 billion but were above Wall Street expectations of $5.49 billion.
Earnings for the period ended July 30 came in at $275 million, or 99 cents a share, from $345 million, or $1.08 a year earlier. Stripping out one-time items, adjusted earnings were $1 a share. Analysts surveyed by FactSet had been expecting 86 cents a share.
Despite the lowered view, Macy’s shares were up 2.1% in premarket trading. Through Monday, shares were down nearly 29% for the year.
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