Strong performance but stock prices fall back The upward revision of Macy's, Inc. (M.US) guidance still unable to support market high expectations

Macy's, Inc. (M.US) easily exceeded Wall Street expectations in the recent quarter and raised its performance guidance for the remaining time of the fiscal year, indicating that despite economic concerns, consumers continue to spend. The company released its third quarter report before the market opened on Wednesday, with revenue reaching $4.7 billion, exceeding the market's general expectation of $4.56 billion, with adjusted earnings per share of $0.09, better than analysts' expectation of -$0.13. Comparable sales increased by 3.2% when calculated in a comprehensive manner including own stores, licensed operations, and third-party platforms, exceeding the company's previously provided guidance range. "Our third quarter sales were the strongest in the past 13 quarters," said Macy's, Inc. CEO Tony Spring in a statement. "As we enter the holiday season, we are well prepared." The stronger sales resulted in better-than-expected quarterly profits, and tariff relief measures and cost reductions also played a positive role. Despite the strong performance, Macy's, Inc. saw its stock price fall more than 6% in pre-market trading after several retailers reported positive earnings, raising market expectations. The company's stock has already risen by 34% this year, with significant gains in the past week. The company raised its full-year adjusted earnings per share guidance to a maximum of $2.20. In September, its guidance was at a maximum of $2.05. The largest department store chain in the United States also raised its sales guidance range to $21.5 billion to $21.6 billion, higher than the previous guidance. Macy's, Inc.'s guidance for the remaining time of the fiscal year indicates that management expects consumers to maintain some momentum they showed during Black Friday and Cyber Monday shopping activities. This performance may enhance Wall Street's support for CEO Spring's transformation strategy. Since taking office in 2024, he has focused on investing in Macy's, Inc. stores with the highest sales potential, by increasing staffing, ramping up marketing efforts, and updating displays to improve performance. The New York-based company stated that its Bloomingdale's chain saw a significant increase in net sales in the recent quarter compared to the same period last year. Net sales for Bluemercury also saw a rise. After Kohl's (KSS.US) raised its full-year outlook at the end of November, some institutions on Wall Street have also raised their expectations for Macy's, Inc. Best Buy Co., Inc. (BBY.US) and Dick's Sporting Goods (DKS.US) also raised their guidance at the end of last month, further indicating that American consumers are still willing to shop at retailers that offer the desired goods at appropriate prices. Spring faces challenges in revitalizing Macy's, Inc.'s former glory. UBS Group AG analyst Jay Sole wrote in a research report on December 1 that since 2012, more than a quarter of the department store chain's market share has been taken by discount retailers, brand direct stores, and Amazon.com, Inc. The company stated that it will close about 150 underperforming stores by 2026. Nevertheless, there are signs that Macy's, Inc. is gaining momentum for growth. Analysts Mary Ross Gilbert and Poonam Goyal noted that Bloomingdale's, in particular, is performing well and taking market share from Saks Global, which has seen double-digit sales declines. Macy's, Inc.'s transformation plan is also making progress. "Our research shows that Macy's, Inc.'s women's clothing supply and product displays in stores (especially renovated stores) and online have improved," said analysts.