NEW YORK (AP) — Macy's Inc. on Wednesday reported a 4 percent profit increase in its fiscal second quarter as business rebounded from slow sales earlier in the year.
But the department store chain cut its full-year outlook for a key sales measure, saying it couldn't make up the sales shortfall from the first quarter, when winter storms kept shoppers at home.
Shares of Macy's tumbled nearly 5 percent, or $2.83, to $56.93 in trading Wednesday.
Macy's, a standout among its peers throughout the economic recovery, is the first of the major retailers to report second-quarter results, which should provide insight into shoppers' mindset heading into the critical final months of the year. Wal-Mart Stores Inc., Nordstrom Inc., Kohl's Inc. and J.C. Penney Co. are set to report their results Thursday.
Like many retailers catering to the middle class, Macy's is facing economic challenges. While the job market is improving and the housing market is rebounding, the gains are not strong enough to sustain big shopping sprees.
Macy's said Wednesday that it's been pleased with the start to the back-to-school season, which typically begins mid-July and ends in mid-September. But Macy's said it needs to continue to discount to bring shoppers in.
"Our outlook for the fall season reflects our confident optimism tempered with the reality that many customers are feeling the impact of an economic environment that, at best, is improving very gradually," Chief Financial Officer Karen Hoguet told investors during a conference call Wednesday.
Still, Macy's, which also operates the upscale chain Bloomingdale's, has benefited from its focus on tailoring merchandise to local markets. It's also aiming to create a more seamless experience for shoppers who are going back and forth from stores to websites.
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