Last year, it was too much inventory, and now this year, it's too little demand. Department store operator Macy's (NYSE: M) is having all sorts of trouble navigating a difficult economic environment. Comparable sales tumbled 7.2% in the first quarter, and the company is resorting to heavier markdowns to clear out spring-seasonal merchandise.

The good news is that Macy's is still turning a profit. Through improved inventory management and operational efficiencies, the retailer has managed to prevent its gross margin from dropping despite the tumbling sales. Macy's gross margin was 40% in Q1, up from 39.6% in the same period last year.

The bad news is that profits are down considerably, and 2023 is going to be a tougher year than the company originally envisioned.

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Source Fool.com