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Macy’s earnings beat market buzz amid consumer spending pressures

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1 year ago

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Macy’s maintained its annual forecasts unchanged despite its second-quarter sales and profit topped market expectations as the luxury department store company anticipates continued pressure on consumer spending.

The retailer, like Target and Coach parent Tapestry, has seen a drop in demand from middle-income customers as they cut back spending on apparel and handbags amid elevated inflation, reported Reuters.

“In light of ongoing macroeconomic pressures and uncertainty on when those will abate, the company continues to take a cautious approach on the consumer,” Macy’s said in a statement.

It reaffirmed its 2023 sales expectations of $22.8 billion to $23.2 billion and adjusted full-year profit per share between $2.70 and $3.20.

Throughout the second quarter, Macy’s worked to clear excess inventory after a move to convert its merchandise for the spring and early summer hurt demand, forcing the Bloomingdale’s parent to cut its annual sales and profit forecasts in June.

Gross margin slipped to 38.1% from 38.9% a year ago.

For its higher-end beauty brand Bluemercury, Macy’s saw quarterly comparable sales rise 5.8%.

“Despite beating profit and sales expectations, Macy’s earnings show that discretionary demand remains constrained as shoppers allocate more of their budgets to everyday necessities,” Insider Intelligence analyst Rachel Wolff said.

Macy’s posted an adjusted net income of $71 million, or 26 cents per share, in the quarter ended July 29, beating expectations of 13 cents.

Comparable sales for Macy’s-owned and licensed stores fell 7.3%, compared with expectations of a 6.48% drop, according to Refinitiv data.

The Bloomingdale’s parent said credit card revenues fell to $120 million from last year’s $204 million, owing to a faster-than-expected rise in delinquencies rate.

The company’s shares, which have lost nearly 30% this year, were down about 1% in premarket trading.

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Business

Irfan Siddiqui meets with the PM and informs him about the Senate performance of the parliamentary party.

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The head of the Senate’s Foreign Affairs Standing Committee and the PML-N’s parliamentary leader paid Prime Minister Muhammad Shehbaz Sharif a visit in Islamabad.

Senator Irfan Siddiqui gave the Prime Minister an update on the Parliamentary Party’s Senate performance.

Additionally, Senator Irfan Siddiqui gave the Prime Minister an update on the Senate Standing Committee on Foreign Affairs’ performance.

He complimented the Prime Minister on his outstanding efforts to bring Pakistan’s economy back on track and meet its economic objectives.

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Business

SIFC Increases Direct Foreign Investment: Investment in the Energy Sector Rises by 120%

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The Special Investment Facilitation Council is intended to help Pakistan’s energy sector attract $585.6 million in direct foreign investment in 2024–2025. The amount invested at the same time previous year was $266.3 million.

This is a notable 120% rise, mostly due to investments in gas exploration, oil, and power. Such expansion indicates heightened investor confidence and emphasizes the development potential in important areas.

The State Bank reports that foreign investment in other vital industries has increased by 48% to $771 million.

This advancement is a blatant testament to SIFC’s efficient investment procedure and quick project execution.

The purpose of the Special Investment Facilitation Council is to establish Pakistan as an investment hub by aggressively promoting regional trade and investment in the energy sector and other critical industries.

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Business

Discos report losses of Rs239 billion.

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When compared to the same period last year, the data indicates that discos have decreased their losses in the first quarter of the current fiscal year.

The distribution businesses recorded losses of Rs239 billion in the first three months of the current fiscal year, a substantial decrease from the Rs308 billion losses sustained during the same period the previous year.

Additionally, the distribution businesses’ rate of recovery has improved. It has increased to 91% in the first quarter of this year from 84% in the same period last year, indicating success in revenue collection.

Regarding circular debt, the Power division observed a notable change. Last year, between July and October, the circular debt grew by Rs301 billion. Nonetheless, this year’s first four months saw a relatively modest increase in circular debt, totaling about Rs11 billion.

These enhancements show promising developments in the electricity sector’s financial health in Pakistan, where initiatives are being made to accelerate recovery rates and slow the expansion of circular debt.

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