We just got 2 alarming signals that an economic slowdown is upon us
of its own. The department-store giant offered disappointing second-quarter projections and — like Dollar General — slashed full-year projections.
One of the most notable takeaways from the company's earnings call was that it's seen a demand decline as shoppers have pivoted their spending habits to be more conservative. It also gave a not-so-promising outlook for how long the slowdown will last. "The US consumer, particularly at Macy's, pulled back more than we anticipated as they reallocated spend to food, essentials and services," Jeff Gennette, the chairman and CEO of Macy's,on Thursday."We have planned our business for the remainder of the year, assuming mid-March through April macro headwinds continue and potentially worsen."
These disappointing developments for Dollar General and Macy's are indicative of a broader economic contraction many feared would come as the Federal Reserve has repeatedly hiked interest rates in the name of smothering inflation. Having burned through post-COVID cash stockpiles, shoppers are taking their frustrations out on certain retailers by spending less.
The consumer slowdown has been frequently cited as a major trigger point for a looming recession, as well as something that will erode stock-market returns as profit growth struggles. Forecasters across Wall Street have warned for months of the prospect of both scenarios materializing.
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