Macy’s Sales Slide As Retailer Issues ‘Cautious' 2023 Outlook

Despite quarterly sales decline, Macy's results beat expectations as promotions drove traffic.

Woman shopping for accessories in a store.
(Image credit: Tang Ming Tung / Getty Images)

Macy’s (M) second-quarter revenues fell amid declines across its in-store, online, brick-and-mortar and digital businesses as well as its credit card segment due to delinquencies.

The retailer's sales and earnings results beat expectations, however, helped by clearance markdowns and promotions.

In response to the mixed results, Macy’s stock fell by more than 10% in the day’s trading.

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For the quarter ended July 29, Macy’s reported net sales of  $5.13 billion, down 8.4% from a year ago, and adjusted diluted earnings of 26 cents per share, down 74%. Brick-and-mortar sales fell 8% and digital sales decreased 10%, compared to a year ago.

Credit card delinquencies rose

Macy’s posted other revenue of $150 million, an $84 million decrease from a year ago. The decline was driven by credit card revenues that were negatively impacted by an increased rate of delinquencies, the company said.

While delinquencies were expected to rise as part of a normalizing of the credit environment, the speed at which this occurred for the company and the broader credit card industry since the company’s first-quarter earnings call was faster than expected, Macy’s said. This negatively impacted results and led to an increase in the portfolio’s bad debt outlook, it added.

“In the second quarter, we delivered better-than-expected top- and bottom-line results,” said chair and CEO Jeff Gennette. “Our teams surgically implemented clearance markdowns and promotions to effectively clear spring seasonal receipts and ensure fresh assortments for the fall and holiday seasons.”

The company said that sales in beauty, particularly fragrances and prestige cosmetics, were strong as were women’s career sportswear, men’s tailored and off-price with Backstage, the company said. Active casual and sleepwear remained unchanged, it added.

Gennette said the company continues “to see uncertainty in the macroeconomic environment.”

Because of that and the results year-to-date, Macy’s reaffirmed its “cautious” full-year outlook of adjusted earnings per share of $2.70 to $3.20 on net sales of $22.8 billion to $23.2 billion.

Joey Solitro

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration. 

With contributions from