The Street
  • 8 months ago
TheStreet’s Caroline Woods brings you the biggest business news of the day, including what investors are watching and why retailers may be on the losing end of new credit card rules.

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Transcript
00:00I'm Caroline Woods reporting from the New York Stock Exchange, here's what we're watching
00:03on the street today.
00:05Stocks are looking to rebound after all the major indexes finished Wednesday in the red.
00:10Wall Street is reacting to yet another inflation report, the Producer Price Index, which measures
00:15the change in wholesale prices.
00:17That came in lower than expected.
00:19Producer prices increased just 0.2 percent in March, lower than Wall Street's estimate
00:23of 0.3 percent.
00:26In other news, big box retailers are about to face a challenge that may affect their
00:30top lines.
00:31In early March, the Biden administration approved legislation that will cap credit card late
00:36fees at $8.
00:37That rule also applies to department stores that have their own store-branded credit card.
00:42The new rule, which lowers the average late fee by about 75 percent, goes into effect
00:47on May 14th.
00:49And while it will certainly benefit customers, it may take a big chunk out of company revenues.
00:54For its 2023 fiscal year, Macy's reported $619 million in revenue from credit card purchases.
01:00Nordstrom brought in $475 million.
01:04Neither company revealed how much it made from late fees, but the new cap could surely
01:08have an impact.
01:09As retailers prepare for this change, they're also preparing for a decline in credit card
01:13spending altogether.
01:14The $619 million in Macy's credit card revenue was a 28 percent drop from 2022, and it expects
01:22that number to drop even further during its current fiscal year.
01:26Of those hundreds of millions of dollars spent with credit cards, the bulk wasn't purchased
01:29with store-branded cards.
01:31Both Macy's and Nordstrom reported that only about 3 percent of their net sales came from
01:35their own cards.
01:37That'll do it for your daily briefing from the New York Stock Exchange.
01:40I'm Caroline Woods with The Street.

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