Macy's CFO predicts that lower-income shoppers may reduce spending in the near future, despite the overall health of the American consumer.

• Adrian Mitchell, CFO of Macy's, states that the American consumer remains robust and continues to spend.
• As oil prices rise, the department store chain expects some consumers to be impacted more than others.
• Macy’s predicts that families with lower incomes, who spend a larger proportion of their paychecks on necessities like groceries, will be impacted more than other groups.

Although the American consumer remains healthy and continues to spend, the department store chain predicts that some consumers may be more affected due to rising oil prices leading to higher gas and grocery costs.

During a Wednesday presentation at the UBS Global Consumer & Retail Conference, Macy's Chief Financial Officer Adrian Mitchell stated that, from a consumer demand standpoint, the market still has a healthy consumer.

Government stimulus payments helped many American families last year, but savings rates have remained high this year compared to pre-pandemic levels.

According to Mitchell, the consumer is also under increased pressure due to the geopolitical instability in Ukraine and Russia, which has led to an increase in inflation and oil prices, ultimately raising the cost of essential goods.

Macy's anticipates that lower-income families, who spend a larger percentage of their monthly income on essential goods like groceries, will be impacted more than other customers. In response, the company is considering how to communicate value to these customers differently compared to luxury customers who have more disposable income to spend.

The significance of value will vary based on income level, as stated at the UBS conference.

This week, U.S. crude oil hit a 13-year high of $130 per barrel, but subsequently eased in Wednesday morning trading. Additionally, the consumer price index for January increased by 7.5% from the previous year, which is the highest reading since 1982.

Despite macroeconomic challenges such as inflation and supply chain disruptions, Macy's provided a better-than-expected financial outlook for 2022 in late February.

Nearly 60% of Macy's shares' value has increased over the past 12 months.