WASHINGTON–Macy’s is warning that it has seen a spike among its cardholders who are late in making payments. The company, which had earlier said it expected an uptick in delinquencies in the wake of the pandemic, now says it has been surprised at just how large that uptick has been.
“The speed at which the increase occurred for us and the broader credit card industry…was faster than planned,” COO/CFO Adrian Mitchell said during an earnings call, according to CNN. Mitchell added the problem “accelerated” in June and July.
According to the report, the delinquencies have driven down the retailer’s credit card revenue by 36% year over year and have contributed to a quarterly loss. The company is bracing for a further increase in “bad debt” in its credit card portfolio, CNN said.
What Might be Coming
Macy’s blamed the jump in delinquencies on broader financial pressure facing consumers and mounting debt levels.
“I think the credit card revenue is an indication of some of the pressures that we’re actually seeing on the consumer,” Mitchell was quoted as saying. “This is about credit card balances, this is about student loans which we know is going to come into focus in the next month or two, auto loans, mortgages.”
Macy’s reported it is working with its credit card partner, Citibank, to target “higher risk segments to surgically reduce exposure, according to CNN.