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The retailer, like Target and Coach parent Tapestry (NYSE:TPR), has seen a drop in demand from middle-income customers as they cut back spending on apparel and handbags amid elevated inflation.
“In light of ongoing macroeconomic pressures and uncertainty on when those will abate, the company continues to take a cautious approach on the consumer,” Macy’s (NYSE:M) said in a statement.
It reaffirmed its 2023 sales expectations of $22.8 billion to $23.2 billion and adjusted full-year profit per share between $2.70 and $3.20.
Throughout the second quarter, it has pushed to clear excess inventory after a move to convert its merchandise for the spring and early summer hurt demand, forcing the Bloomingdale’s parent to cut its annual sales and profit forecasts in June.
Gross margin slipped to 38.1% from 38.9% a year ago.
“The company continues to focus on ensuring that merchandise inventories are current…and are at the appropriate receipt levels based on expected sales demand,” it said.
For its higher-end beauty brand Bluemercury, Macy’s saw quarterly comparable sales rise 5.8%.
Macy’s posted an adjusted net income of $71 million, or 26 cents per share, in the quarter ended July 29, beating expectations of 13 cents.
Comparable sales for Macy’s-owned and licensed stores fell 7.3%, compared with expectations of a 6.48% drop, according to Refinitiv data.
Shares of the company, which have lost nearly 30% this year, were down 2% in premarket trading.
