Macy's lowers sales outlook but beats profit expectations

• The company's stock was down more than 12% shortly after the report, but it ended up closing Thursday up 1.2%.

Between the lines: Comparable sales for the quarter fell 7.2% at owned and licensed stores, compared with the same period in 2022.

• That included a 6% decline in brick-and-mortar sales and an 8% decline in digital revenue.
• And the company reduced its comparable sales forecast for the fiscal year from a previously expected decline of 2% to 4% to a newly expected decline of 6% to 7.5%, owing to what it called "anticipated macroeconomic impacts to the consumer."
• It also revealed a plan to discount certain merchandise in the second quarter to clear out excess inventory.

But, but, but: The company outperformed profit expectations, posting net income of $155 million, down from $286 million a year earlier.

The intrigue: Fellow department store chains Nordstrom and Kohl's recently reaffirmed their respective earnings guidance.

• CFRA Research analyst Zachary Warring told Reuters that Macy's is being "more conservative compared to other department stores and apparel retailers which we believe is the right move in this macroeconomic backdrop."

What to watch for: Whether the company's next CEO, current executive vice president Tony Spring, sets the retailer on a new course.

• Current CEO Jeff Gennette recently announced he would step down in February 2024.