High net worth individuals continue to prop up US consumer spending! Macy's, Inc. (M.US) three major brands all saw growth, raising full-year performance expectations.

The latest financial report data released by Macy's, Inc. (M.US), a well-known department store retailer in the United States, shows that the company's management has raised its full-year sales outlook. This further indicates that the company's strategy focusing on developing luxury goods business and improving popular product assortment is proving to be effective. The retailer has raised its full-year comparable sales guidance to a maximum growth of 1.2%, higher than the previous expectation of maximum growth of 0.5%. The company has also raised its expectations for annual net sales and adjusted diluted earnings per share. From a macro perspective, this financial report indicates that US consumer spending still has strong resilience, especially among high net worth and high-income individuals, and the middle to high-end optional consumption has not slowed significantly. Macy's, Inc. stock rose by about 2% in pre-market trading on Wednesday. As of market close on Tuesday, the stock has fallen by 1.7% since the beginning of the year, due to concerns in the market about the impact of high energy costs resulting from political conflicts in the Middle East on US consumer spending prospects, while the S&P MidCap 400 Index has risen by about 14%. The core difference between Macy's, Inc. and general retailers such as Walmart Inc. and Target Corporation is that the company is not a big-box retailer anchored by groceries and daily goods, but rather a combination of department stores, fashion, beauty, home, and luxury goods. The company's performance disclosure shows that its core sales categories include clothing and accessories, cosmetics, home goods, and other consumer goods, covering a wide range of customer groups from value-conscious consumers to high-end luxury consumers through brands such as Macys, Bloomingdales, and Bluemercury; where the Macys main brand targets middle to upper-middle income households, Bloomingdales leans more towards high-end fashion and luxury consumption, while Bluemercury focuses on high-end beauty and skincare. High-end consumption supports retail resilience: Macy's, Inc.'s three main brands all see growth, raising full-year sales outlook American retailers, including Macy's, Inc., are actively responding to challenging environments. High gasoline costs, combined with other macroeconomic pressures, are forcing people to consider where and how to spend more cautiously. But Macy's, Inc.'s better-than-expected performance report indicates that consumer spending remains resilient. Despite rising prices of oil and natural gas and overall inflation, the middle class and high net worth consumers continue to shop. The financial data shows that as of the quarter ending on May 2, the comparable sales for all three of Macy's, Inc.'s brands have achieved growth. Net sales exceeded analyst expectations. For the quarter ending on May 2, Macy's, Inc. reported a year-on-year increase of 1.8% in net sales to $4.68 billion, higher than the market's consensus expectations; net profit also increased from approximately $38 million in the same period last year to $63 million, with comparable sales increasing by approximately 3%, one of the strongest quarterly performances in four years. Looking at the individual brands, Bloomingdales saw a significant increase in comparable sales by 10.2%, Bluemercury grew by 6.4%, and Macy's main brand increased by 1.6%, showing that luxury goods, fashion, and beauty spending data are significantly better than mass consumer discretionary spending. The company has therefore raised its full-year net sales outlook to $21.5 billion to $21.75 billion, and adjusted EPS expectations to $2.00 to $2.20. Macy's, Inc. CEO Tony Spring said in an interview, "There are now a number of businesses that are growing strongly, which gives us more confidence in the prospects for the rest of the year than we had at the beginning of March." "Consumers are still very interested in new and fashionable things." Since taking over as CEO two years ago, Spring has been focusing on developing the best-performing stores under the company's namesake chain and closing underperforming retail stores. He has also been committed to accelerating the growth of expensive luxury products at Bloomingdales and Bluemercury. With competitors such as Saks Global Enterprises filing for bankruptcy protection and closing stores, continuously attracting high-income and high-net-worth shoppers may benefit Macy's, Inc. Spring said, "Market disruptions are giving Bloomingdales more opportunities to shine." K-shaped consumer spending continues to support the narrative of a "soft landing" for the US economy Compared to Macy's, Inc., which focuses on high-end luxury product lines, Walmart Inc. relies more on food, groceries, low-priced high-frequency consumption, and the "saving" needs of all income levels, making it more countercyclical. Target Corporation falls somewhere between Walmart Inc. and department store retailers, offering daily goods, home goods, apparel, beauty, and design-oriented retail, but is still more mass-market oriented than Macy's, Inc. Therefore, the trajectory of improvement in Macy's, Inc.'s performance cannot simply be extrapolated to a complete recovery of low-income consumers in the United States, but is more likely to be interpreted by investors as: US consumer spending has not collapsed yet, and K-shaped consumption continues to support the narrative of a "soft landing" for the US economy - especially as high-net-worth and high-income consumers still have strong purchasing power, luxury discount department stores and high-end cosmetics are becoming the latest highlights of retail resilience; if the US non-farm job market does not deteriorate sharply, this kind of consumer resilience will help support the narrative of a soft landing for the US economy. From a macro perspective, Macy's, Inc.'s financial report indicates that US consumer spending still has resilience, especially among high-income individuals and middle to high-end optional luxury goods consumers who have not significantly slowed down. Against the backdrop of high oil prices, inflation, high interest rates, and tariff pressures, the unexpected upward revision of performance guidance by Macy's, Inc.'s management indicates that consumers are still willing to continue paying for "new, fashionable, branded, experiential luxury product lines, and high-end beauty products"; this will have a positive impact on US second-quarter consumer spending and service-oriented economic resilience. However, it is more of the latest evidence of "K-shaped consumption": the affluent continue to consume, while the low-income group is more squeezed by rising gasoline, food, rent, and credit costs. Bloomberg Intelligence analysts, in light of the latest performance disclosure, also attribute Macy's, Inc.'s current improvement to the demand from high-income consumers for high-end fashion, accessories, Bloomingdales, and Bluemercury.