What: Macy’s Inc. shares fell sharply as the retailer lowered its sales forecast for 2024 despite exceeding second-quarter earnings expectations.

Why it is important: The decline in Macy’s stock highlights the challenges the retailer faces in a tough consumer environment, where even profitability isn't enough to offset concerns about weaker sales projections and the overall retail sector’s outlook.

Macy’s Inc. reported a profitable second quarter with net income of USD 150 million, surpassing expectations, but saw a 3.8% drop in net sales, prompting the company to lower its sales forecast for the year. The retailer cited a cautious consumer environment and increased promotional activity as key factors behind the adjustment. Despite implementing a "Bold New Chapter" strategy to transform its operations and close underperforming stores, Macy’s struggles to navigate economic headwinds, leading to a 12.9% drop in its share price following the news. The company remains committed to its long-term goals, including expanding its small-format stores and optimizing its store portfolio, though near-term consumer spending challenges persist.

Macy’s Inc. shares plummet after lowered sales forecast despite profit beat