What Happened?
Shares of department store chain Macy’s (NYSE: M) jumped 4% in the afternoon session after a trio of major retailers reported stronger-than-expected first-quarter earnings.
The synchronized beat from companies including Target, Lowe's, and TJX signaled a potential turn in consumer discretionary momentum, triggering a sector rotation back into U.S. retail stocks. The results suggest American household spending remains more resilient than analysts had feared at the start of the quarter.
Target, for example, saw a 6.7% increase in net sales, reversing several quarters of decline, with store traffic up 4.4%. These positive reports, particularly from discount-oriented retailers, indicate that while consumers may be navigating inflation, they are still spending, especially when focused on value.
After the initial pop the shares cooled down to $19.87, up 4.5% from previous close.
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What Is The Market Telling Us
Macy’s shares are quite volatile and have had 19 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 biggest move we wrote about over the last year was 9 months ago when the stock gained 19.6% on the news that 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.
The 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.
Macy's is down 12.7% since the beginning of the year, and at $19.87 per share, it is trading 17.7% below its 52-week high of $24.15 from December 2025. Despite the year-to-date decline, investors who bought $1,000 worth of Macy’s shares 5 years ago would now be looking at an investment worth $1,101.
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