Macy’s warns holiday-quarter will come in light, citing squeeze on shoppers’ wallets

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Macy’s flagship store in Herald Square in New York, Dec. 23, 2021.
Scott Mlyn | CNBC

Macy’s on Friday warned its holiday-quarter sales will come in on the lighter side, saying consumers’ budgets are under pressure and that it anticipates that squeeze to continue into this year.

The department store said net sales are now expected to be at the low- to mid-point of its previously expected range of $8.16 billion to $8.4 billion. It expects adjusted diluted earnings per share to be in the previously issued range of $1.47 to $1.67.

Shares of the company fell more than 4% in aftermarket trading.

CEO Jeff Gennette said Macy’s put up strong Black Friday and Cyber Monday sales and saw strength in gift-giving and occasion apparel, but “the lulls of the non-peak holiday weeks were deeper than anticipated.”

He said in a news release that the retailer, which includes higher-end department store chain Bloomingdale’s and beauty chain Bluemercury, has taken action to prepare for a year that may be tougher. For instance, he said, it has closely managed its inventory so it can stay nimble and has the merchandise that customers want.

Bloomingdale’s and Bluemercury outperformed the rest of the business, Gennette said, and the company expects gross margins for the holiday season will be about in line with expectations.

Total end-of-quarter inventories are on track to be slightly below last year and down by the mid-teens compared with 2019, Macy’s said.

But the retailer anticipates a more challenging sales environment ahead, Gennette said.

“Based on current macro-economic indicators and our proprietary credit card data, we believe the consumer will continue to be pressured in 2023, particularly in the first half, and have planned inventory mix and depth of initial buys accordingly.”

This story is developing. Please check back for updates.

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