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Macy’s says its holiday sales will be lower, citing inflation pressures

Jan 8, 2023, 6:00 AM
People shop at Macy's department store during Black Friday in New York City on November 25, 2022....
People shop at Macy's department store during Black Friday in New York City on November 25, 2022. (Photo by Yuki IWAMURA / AFP)
(Photo by Yuki IWAMURA / AFP)

(CNN) — Turns out inflation may have put a damper on the holidays.

Macy’s chair and CEO Jeff Gennette said lulls during the non-peak holiday weeks “were deeper than anticipated” and that consumers will continue to feel pressured into 2023, in a Q4 update Friday.

Macy’s said Friday its net sales from the holiday quarter will likely be at the low-end to mid-point of its previously issued range of $8.16 billion to $8.4 billion. The retailer said its adjusted diluted earnings per share are expected to be between $1.47 to $1.67.

In last year’s fourth quarter results, Macy’s earned $8.67 billion, above analysts’ forecasts, and had an adjusted earnings per share of $2.45.

Total end-of-quarter inventories are on track to fall slightly below last year and down mid-teens relative to 2019.

Gennette said its Black Friday and Cyber Monday sales met expectations and the week leading up to and following Christmas beat them.

“Overall, our occasion apparel and gift-giving business were strengths, and inventory composition and price points aligned with customers’ needs,” Gennette said, noting that its high-end Bloomingdale’s stores and cosmetics line Bluemercury continued to outperform forecasts.

Macy’s warning may provide an early clue to investors wondering if high inflation has hampered shopping demand during the holidays.

Americans spent more this season to keep up with high prices. US retail sales increased 7.6% during the period between November 1 to December 24 compared to the same time last year, according to the Mastercard Spending Pulse. US retail sales were lower than expected in November, falling 0.6% during the month, which was the weakest performance in nearly a year.

Gennette warned that consumer sentiment is unlikely to change with the new year.

“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,” the Macy’s CEO said.

The company expects to report full results for the fourth quarter and fiscal year 2022 in early March 2023.

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Macy’s says its holiday sales will be lower, citing inflation pressures