Macy’s Inc. reported a disappointing profit Wednesday for its second quarter and cut its outlook for the year, blaming shoppers’ reluctance to spend for a slip in sales.
Before Wednesday’s report, over the past year, its stock had been up almost 27 percent.
Macy’s is seen as a barometer of spending among middle- to upper-income shoppers.
Like other retailers, the Cincinnati company is grappling with a yo-yo economic recovery that’s making people more careful about their purchases during the key back-to-school selling period.
“To see Macy’s miss by a wide margin is troublesome, speaking volumes about the health, or lack thereof, of middle America,” wrote Brian Sozzi, chief equities strategist for Belus Capital Advisors.
For the period ended Aug. 3, Macy’s says it earned $281 million, or 72 cents per share. That’s short of the 78 cents per share analysts expected. A year ago, the company earned $279 million, or 67 cents per share.
Revenue slipped to $6.07 billion, also short of the $6.26 billion analysts expected, according to FactSet.
Revenue at stores open a year slid 0.8 percent.
Macy’s expects sales at stores open at least a year to climb between 2 percent and 2.9 percent, down from its previous guidance of a 3.5 percent increase.
Macy’s said it was encouraged by its early read on the back-to-school season heading into the third quarter. But other retailers such as teen clothing sellers American Eagle Outfitters Inc. and Aeropostale Inc. have cited lots of discounting and warned of a slow start to the period.
Macy’s also lowered its earnings forecast to $3.80 to $3.90 per share, down from the previous outlook of $3.90 to $3.95 per share.
The disappointing results from Macy’s don’t bode well for J.C. Penney Co., which reports next week, Sozzi said.