- Retailers have overcome excess inventory but now face slowing demand for apparel. Macy's reduced its full-year outlook, citing consumer economic challenges. Sales trends weakened in late March, leading to increased promotions and inventory adjustments. Quarterly net sales were $5 billion, down 7% from last year, with net income falling 46% to $155 million.
- Macy's and other retailers faced inflation impacting consumer spending. Essential item sellers thrived, while those selling discretionary products saw slower growth or declining revenue. Bargain-hunting and inventory management helped retailers navigate last year's supply chain challenges and reduced spending.
Why it matters
Nordstrom reduced inventory by 8% compared to last year, while Macy's saw a 7% decrease from the previous year and a 16% decrease compared to 2019. Despite industry challenges, there are areas of strength in the retail sector. Leasing activity and rents remain strong in prime retail locations. Luxury items like high-end handbags and jewelry continue to perform well. Sales of products associated with going out or spending time away from home are also strong.