Nordstrom and Macy’s reported their second quarter earnings Tuesday, with the two fashion retail giants joining retailers such as Walmart, Best Buy, Target and more in reducing their forecasted earnings for 2022 amid reduced consumer demand and the risk of recession, The Wall Street Journal reported.

Despite a “solid” second quarter, with sales increasing by 12% compared to the second quarter of 2021, “exceeding pre-pandemic levels,” Nordstrom lowered its expected year-on-year growth to between 5% and 7%, down from 6% to 8%, and slashed expected earnings per share from roughly $3.50 to roughly $2.50, according to Nordstrom’s earnings report. Macy’s forecasted earnings before interest, taxes, depreciation and amortization, a profitability measure, fell from between 11.2% and 11.7% of sales to approximately 10.5% of sales, with expected earnings per share falling from approximately $4.75 to approximately $4.10, according to a press release.

“While our quarterly results were consistent with our previous outlook, customer traffic and demand decelerated significantly beginning in late June, predominantly at [discount line] Nordstrom Rack,” said Nordstrom CEO Erik Nordstrom in a company press release. “We are adjusting our plans and taking action to navigate this dynamic in the short term, including aligning inventory and expenses to recent trends, and we remain confident in our ability to deliver on our long-term strategic and financial goals.”

The data in the US are showing major cracks in spending ability for lower-income households. Macy’s and Nordstrom earnings reinforce this.

The problem: inflation. I think the Fed will see this and be MORE likely to hike, not less because they are committed to front-loading

— Edward Harrison (@edwardnh) August 24, 2022

“The company’s lower outlook for the remainder of the year incorporates the risk it sees in the continued deterioration of consumer discretionary spending in some of its categories and the level of inventory within the industry, as well as risks associated with a more pronounced macro downturn,” read the Macy’s press release. Macy’s also noted it intends to discount a variety of products to eliminate “aged inventory” and reduce “merchandise category stock to sales imbalances.”

Macy’s CEO Jeff Gennette said customers from all income brackets are reducing their spending during a call with analysts, The Wall Street Journal reported. This mirrors similar claims by Walmart and Best Buy, who have highlighted reduced consumer activity and high inflation as the primary cause of weakened financial forecasts, according to the WSJ.

Nordstrom shares had fallen almost 19% following the news, while Macy’s had fallen nearly 3%, at time of publication Wednesday, according to the WSJ.

Neither Nordstrom nor Macy’s immediately responded to a Daily Caller News Foundation request for comment.