Yet the quarterly results Tuesday beat Wall Street expectations. And Macy's, which also operates upscale Bloomingdale's and beauty chain Bluemercury, said it is seeing a positive impact from its turnaround efforts that include closing underperforming stores and upgrading others. Macy's also raised its annual outlook.
Americans are still spending, but they're getting more selective and are also more likely to wait until something goes on sale. Retailers are also seeing higher delinquency rates in their credit card businesses. CEO Tony Spring, who took over in February, said that all income groups are being more thoughtful with their spending.
Bloomingdale's, for example, registered weaker sales in luxury handbags and shoes as consumers shift to less expensive collections. Higher income customers are focusing on their interests and passions, Spring said, while customers in the lower tier are starting to make choices increasingly with rent and family obligations in mind. "I expect the consumer to remain under pressure," Spring said during a call with industry analysts Tuesday.
"We've got a big year in front of us. Maybe there will be rate cuts. But it's an uncertain environment, and I think our job is not to assume anything different on the things we don't control.
" Macy's is accelerating the expansion of its new, small-format stores, while closing locations where sales have lagged. The company is opening 30 small-format locations through the fall of 2025, nearly tripling the cu.