Macy’s is sounding the alarm regarding a surge in customers who are falling behind on credit card payments, underscoring the growing financial strain on consumers.

The renowned department store had anticipated an increase in delinquencies following a period of post-Covid recovery. However, the scale of this uptick has taken Macy’s management by surprise, CNN has reported.

Adrian Mitchell, Macy’s Chief Operating Officer and Chief Financial Officer, revealed during an earnings call on Tuesday that the pace at which this increase transpired for both Macy’s and the wider credit card industry exceeded their projections. He noted that this challenge gained momentum notably during June and July.

This predicament is having a negative impact on Macy’s operations, causing a 36% year-over-year drop in credit card revenue and contributing to a quarterly loss.

Mitchell highlighted that due to deteriorating consumer leverage metrics, Macy’s is preparing for an additional rise in “bad debt” within its credit card portfolio.

Macy’s attributes the surge in delinquencies to the broader financial pressures consumers are facing, coupled with escalating levels of debt.

Written by staff