What Happened?
Shares of department store chain Macy’s (NYSE:M) jumped 3.4% in the morning session after 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.
After the initial pop the shares cooled down to $13.66, up 2.2% from previous close.
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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. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 3.8% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
Macy's is down 17.7% since the beginning of the year, and at $13.66 per share, it is trading 24.6% 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 $2,060.
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