May 26 (Reuters) – Macy’s Inc (MN) raised its full-year profit forecast on Thursday, helped by strong demand for high-margin apparel from consumers returning to weddings and other social events, even as searing inflation undermines the purchasing power of consumers.

Shares of the department store chain rose 13.8% to $21.86 in premarket trading as the company joined rival Nordstrom Inc (JWN.N) in bucking the trend of corporate profit warnings. leading retailers that see consumers prioritizing spending on household essentials. Read more

Macy’s, hit hard by store closures during the pandemic, said consumers were returning to online in-store shopping faster than expected as they ditched casual and sportswear for dresses, formal wear and shoes. more expensive.

“(The change in demand) has contributed to an increase in store traffic as consumers are more likely to shop for used clothing in person,” said Jeff Gennette, CEO of Macy’s.

The company also stocked up on evening dresses, expecting to benefit from social events gaining momentum and ahead of what is expected to be the biggest wedding season in the United States since 1984. read more

Still, Macy’s said it expects more markdowns in the second quarter to shed excess inventory of more casual apparel, which is seeing slowing demand.

High-end fashion has also been relatively insulated from the effects of inflation so far this year and companies such as Macy’s, Nordstrom and Ralph Lauren Corp (RL.N) are seeing affluent consumers continue to spend. Read more

“Based on the results we’ve seen, high-end consumers are more resilient to inflation, while the average consumer is struggling a bit more,” said Jessica Ramirez, retail analyst at Jane Hali & Associates.

Comparable sales at Macy’s luxury stores, Bloomingdale’s, rose nearly 27% in the first quarter.

Macy’s forecasts adjusted earnings per share for fiscal 2022 of $4.53 to $4.95, down from its previous guidance of $4.13 to $4.52. It also beat first-quarter earnings estimates.

Reporting by Uday Sampath in Bangalore; Editing by Shounak Dasgupta

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