Clip The Coupons, Check The Couch For Quarters: Retailers Shed Light On Consumer Spending Trends

Several retailers made preannouncements ahead of the 2023 ICR Conference this week. After taking a look at the results presented by management, it appears a trend is taking shape.

What To Know: Macy's Inc M said it expects fourth-quarter revenue at the low-end to mid-point of the company's previously issued guidance range of $8.161 billion to $8.401 billion versus average estimates of $8.31 billion. The New York-based company anticipates adjusted earnings of $1.47 to $1.67 per share versus estimates of $1.60 per share.

Macy's noted that discretionary spending came under pressure during the holiday season. 

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Casual apparel retailer Tilly's Inc TLYS saw sales fall nearly 13% on a year-over-year basis. 

"We believe this year's inflationary environment negatively impacted our customers' spending and our results during the 2022 holiday period, particularly when compared to 2021's post-pandemic record-setting holiday period," the company said.

These companies seem to be signaling that the consumer is facing inflationary pressures and pulling back on discretionary spending. At the very least, it appears consumers are turning to discount retailers. 

Five Below Inc FIVE previously guided for fourth-quarter revenue between $1.085 billion and $1.11 billion. Ahead of the ICR Conference, the company said it expects results to come in near the high end of its previously provided guidance ranges.

Holiday sales were up 11.2% year-over-year and Five Below appears to be firing on all cylinders.

"We are entering fiscal year 2023 with momentum and excited to be executing our Triple-Double strategy, including opening 200+ new stores for the first time in our history and converting over 400 stores to the new Five Beyond format," the company said.

Related Link: Five Below's Strong Holiday Sales Prompts 6% Price Target Boost By This Analyst

What About Food? You Gotta Eat: The trend seems to be the same as consumers are looking for cheaper options. 

Shake Shack Inc SHAK said it expects fourth-quarter revenue to come in at $238.5 million versus estimates of $237.56 million. The company expects full-year revenue of $900.5 million versus estimates of $899.39 million. Same-store sales are expected to be up more than 5% in the fourth quarter.

Shake Shack said it opened 36 new locations in 2022. Twenty-two of those locations were opened during the fourth quarter.

Potbelly Corp PBPB said it saw strong momentum into the end of the year, which has continued into 2023. The company expects fourth-quarter revenue between $119 million and $120 million, up from its previous guidance of $114 million to $119 million.

Jack In The Box Inc JACK didn't preannounce, but the fast-food chain reportedly raised its outlook during the conference. According to reports, Goldman Sachs said Jack In The Box is in the early stages of an accelerating growth story.

Price Action: All of the aforementioned names are trading higher on Wednesday with the exception of Jack In The Box, which was down 0.92% at the time of writing, according to Benzinga Pro.

Photo: Jonathan Harford from Flickr.