Shares of Macy's, Inc. (NYSE: M), one of the largest U.S. department stores under brands such as Macy's, Bloomingdale's, Bloomingdale's Outlet, and Bluemercury, popped 11% as of 3:00 p.m. EST, after the retailer beat earnings estimates and had a positive outlook for the upcoming holiday season.
Despite the uptick in Macy's shares today, it was far from a blockbuster third quarter. Comparable-store sales, those at stores open more than 12 months, dropped 3.6% which was worse than the anticipated 2.6% decline. That, in combination with store closings, drove Macy's total sales 6.1% lower to $5.28 billion during the third quarter compared to the prior year. Despite the sales headwinds, Macy's did report adjusted earnings per share of $0.23, topping analysts' estimates calling for $0.19 per share.
"Overall, we're pleased with the results for the third quarter and we remain on track to meet our full-year sales and earnings guidance for 2017. Importantly, we also saw better gross margin performance primarily due to our tightly controlled inventory position," said Macy's Inc. CEO Jeff Gennette in a press release.
The silver lining driving the share price higher today is management's optimism heading into the critical holiday season. Management believes Macy's is still a destination retailer during the holidays and that its loyalty program, in-store experiences, and a stronger online presence will help boost holiday sales this year. Simply put, Macy's shares rising on a mostly disappointing third quarter emphasize just how far its stock has fallen over the past year. The share price is down nearly 50% alone over the past 12 months and roughly 67% over the past three years. At this point, any positive momentum at all is enough to perk up spirits and convince some investors to take some risk and buy shares.
10 stocks we like better than Macy'sWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Macy's wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of November 6, 2017