The difference in fiscal second-quarter results reported by the two retailers underscores the financial circumstances of U.S. shoppers: Consumers are still spending, but they're being selective about where they make purchases when the costs of housing, food and other essentials remain inflated.
When it comes to clothing, for example, they're often choosing store label brands, which are typically less expensive than national brands. "You have to believe that everybody is being a little more cautious as they kind of watch what's going on in the macro environment and are just being more judicious in the purchases they make," Macy's CEO Tony Spring told analysts Wednesday. Target's profits and sales beat Wall Street expectations.
Sales rose 3% to $25.45 billion in the latest quarter, slightly better than expected. But even though the number of transactions increased, the average amount spent by customers fell during the quarter, underscoring how Americans remain focused on deals, company executives said.
Target CEO Brian Cornell described how customers becoming choosier with how they spend their money poses a challenge for retailers. "In an environment where consumers continue to make meaningful trade-offs, our results demonstrate the power that comes from the right combination of newness, seasonal relevance, and compelling value," Cornell said during an earnings call with analysts. The Minneapolis-based company reported that its comparable sales — the sales from stores and dig.