The news: Both Macy’s and Dick’s Sporting Goods reported Q2 earnings and sales above analyst expectations despite softening consumer demand and difficult year-over-year comps.
But while Macy’s lowered its outlook for the rest of the year, Dick’s Sporting Goods is optimistic that its core consumer base will continue to spend.
Some pandemic gains remain: Dick’s Sporting Goods and Macy’s each reported a drop in comp sales, but overall sales remained above 2019 levels for both.
Inventory troubles persist: Inventory pressures continue to weigh on both retailers; however, Dick’s Sporting Goods expressed comfort with its elevated stock levels.
Demand wavers: While Macy’s noted weakening demand for activewear as one of the reasons for lower profits, Dick’s Sporting Goods sees its products as a necessity for shoppers across the income spectrum.
Looking ahead: While Dick’s Sporting Goods is more optimistic about its future performance than Macy’s, it still anticipates a decline in sales for the rest of the year—albeit a slightly smaller fall than it initially forecast.
Macy’s faces more challenging headwinds: With shoppers spending less on discretionary goods and turning to cheaper retailers, its inventory—and profit—troubles may well continue through the holiday season and beyond.
This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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