What: Macy’s Inc reports slow consumer demand and poor financial results in Q2 but is hopeful for higher sales during the holiday season and next year.

Why it is important: Macy’s is giving insight into their outlook for the year post unideal Q2 results and how they plan to adapt to changing consumer demands as well as the economic environment.

The company reports a Q2 8% sales drop to USD 5.13 billion from USD 5.6 billion in Q2 2022, as well as a net loss of USD 22 million, compared to USD 275 million profit last year. After the release of quarterly results, Macy’s stock price fell 14%; the projected net sales for the year are still below the pre-pandemic sales figures.

Jeff Gennette, CEO and Chairman of Macy’s Inc., anticipates that the drivers of sales for the holidays will be gift offerings in beauty, merchandising revolving around the 100th anniversary of Disney, Toys “R” US in-store shops, and the Macy’s private brand, On 34th.

As customers have decreased their discretionary spending, Macy’s remains cautious especially due to the clearance of excess spring inventory.

Macy’s also announced the opening of four new small-format stores which signals an optimistic light on the company’s strategy to improve the customer experience and stay relevant as a modern department store. The small format stores ranging from 30,000 to 50,000 square feet, will be opening in Highland Grove centre in Highland, Indiana, South Bay in Boston, Arroyo Market Square in Las Vegas, and Santee Trolly Square in San Diego.

Macy’s Inc. posts Q2 declines, stays cautious on consumers