Macy’s reports Q1 sales drops 

Macy’s slashed its outlook for the entire year as sales weakened in the first quarter during an increasingly challenging economic environment, including stubbornly high inflation, the Associated Press reports.

Macy’s results wrap up the retail industry’s fiscal first-quarter earnings season that showed how still-high inflation, particularly in food, is forcing shoppers to further cut back on discretionary items like clothing to afford their larger grocery bills.

Macy’s sales started to weaken in late March and worsened in April. Headlines surrounding the banking crisis starting in mid-March also worried shoppers; the compounding effect of inflation has made shoppers divert more of their money to food, essentials, and services.

Business improved slightly in May at Macy’s stores. Macy’s Inc. reported net income of $155 million, or 56 cents per share, above the 45 cents Wall Street was looking for, but a significant decline from the $286 million earned during the same period last year.

The company now expects earnings in the range of $2.70 to $3.20 per share for the year, down from previous guidance of between $3.67 and $4.11 per share.

The company anticipates sales to be in the range of $22.8 billion to $23.2 billion this year, down from the previous range of $23.7 billion to $24.2 billion.

Shares tumbled during premarket trading but recovered in the afternoon, gaining more than 2% to $13.90.