Macy's Inc on Thursday cut full-year sales and profit forecasts, hurt by a slowdown in demand for high-end products and increased discounts due to persistently high inflation, sending shares of the department store chain down 12%.

Higher rental and food prices have pushed upscale retailers such as Macy's lower on customers' list as they now prefer to buy from discount stores and off-price retailers that offer products at cheaper prices.

Last week, peer Kohl's Corp, which caters more to lower to middle-income customers, flagged a weaker consumer spending after posting a bigger-than-expected drop in quarterly sales. Macy's expects 2023 sales between $22.8 billion and $23.2 billion, compared with its prior forecast of $23.7 billion to $24.2 billion.

The company sees adjusted full-year profit per share between $2.70 and $3.20, compared with the previous forecast of $3.67 to $4.11 per share.

(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shinjini Ganguli)