Macy's lowered its annual net sales forecast on Wednesday as lingering weakness in U.S. consumer spending dashes hopes of a turnaround in demand for big-ticket discretionary goods, sending its shares down 9% in premarket trade.
The company now expects annual net sales of $22.1 billion to $22.4 billion, compared with its prior forecast of $22.3 billion to $22.9 billion.
A weak forecast from home-improvement chain Home Depot (HD.N), opens new tab and slowing sales growth reported by e-commerce giant Amazon (AMZN.O), opens new tab this quarter also underscored persistent softness in demand for pricier discretionary purchases as high borrowing costs pressure consumer spending.
That has forced Macy's to offer more discounts in some categories to attract lower and middle-income consumers, hurting its margins despite benefits from a cost-savings plan under new CEO Tony Spring.
The company's second-quarter net sales fell 3.8% to $4.94 billion, compared with analysts' expectations for a 0.23% fall to $5.12 billion, according to LSEG.
