What Happened?
Shares of department store chain Macy’s (NYSE: M) jumped 19.6% in the morning session after the company reported second-quarter results that beat Wall Street's expectations, raised its full-year forecast, and posted a welcome return to same-store sales growth.
he department store chain's same-store sales, which track sales online and at stores open for at least a year, rose 1.9% year-over-year. This marked a significant turnaround from recent declines, including a 4% drop in the same quarter last year. While total revenue fell 1.9% to $5.00 billion, it still surpassed analysts' estimates. Similarly, adjusted earnings of $0.41 per share were down from the prior year but more than doubled the consensus forecast of $0.19. Investors responded positively to signs that the company's strategy of closing underperforming stores is yielding results. Buoyed by the performance, Macy's lifted its full-year guidance for both revenue and adjusted earnings.
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What Is The Market Telling Us
Macy’s shares are quite volatile and have had 18 moves greater than 5% over the last year. But moves this big are rare even for Macy's and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 3.4% on the news that fellow department store Kohl's reported a strong earnings beat, boosting sentiment across the retail sector. The positive results from a key competitor sparked investor optimism for peer companies. The move also comes as investors look ahead to Macy's own second-quarter results, which are scheduled for release next week. Analysts are focused on the potential impact of tariffs on the company's performance, which are expected to weigh on margins and reduce earnings per share for the fiscal year. However, some analysts also noted encouraging signs of consumer demand outpacing sentiment, particularly in areas with new product assortments and improved store offerings, providing a mixed but watchful outlook ahead of the report.
Macy's is down 2.1% since the beginning of the year, and at $16.16 per share, it is trading 10.7% below its 52-week high of $18.10 from December 2024. Investors who bought $1,000 worth of Macy’s shares 5 years ago would now be looking at an investment worth $2,130.
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