Retail companies have been withstanding the worst of the global supply chain disruptions and multi-decade high inflation. As a result, aggregate consumer demand has dampened and there has been a notable shift in consumer spending from goods to services. Due to declining demand, retail companies are expecting potential inventory pileups and are, therefore, moving to adjust their inventory levels to match sales.
Following weak earnings in their fiscal first quarter, struggling retail companies have slashed their revenue and earnings guidance for fiscal 2022 due to several economic headwinds. Hard-hit retail stocks are expected to remain under pressure in the coming months due to deteriorating financials, their history of big losses, and bleak growth prospects.
