Macy’s lowered its annual net sales forecast on Wednesday as inflation-weary customers hold back from spending on upscale apparel and accessories, sending shares of the department store operator down 10 percent premarket.

Undermining cost-saving efforts under new CEO Tony Spring, Macy’s has been forced to offer more discounts in some categories to attract lower and middle-income consumers struggling with high borrowing costs.

The company now expects annual net sales of $22.1 billion to $22.4 billion, compared with its prior forecast of $22.3 billion to $22.9 billion.

The forecast cut, which comes ahead of the busy back-to-school and holiday shopping period, was a result of “a more discriminating consumer and heightened promotional environment”, Macy’s said in a statement.

The results contrast Walmart and Target as the big-box retailers raised their annual profit forecasts this quarter thanks to robust demand for lower-priced essentials.

Macy’s second-quarter net sales fell 3.8 percent to $4.94 billion, compared with analysts’ expectations for a 0.23 percent fall to $5.12 billion, according to LSEG.

The company also reported a fall of 1.1 percent in comparable sales at its Bloomingdale’s banner in the quarter, following a 0.8 percent rise in the prior quarter.

Macy’s comparable sales fell 4.5 percent on an owned basis.

The company terminated buyout talks with an investor group comprising Arkhouse Management and Brigade Capital in July on grounds that the bid failed to provide “compelling value”.

The investor group had offered to acquire the department store chain for $6.9 billion.

By Juveria Tabassum; Editor: Devika Syamnath

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