What Happened:
Shares of department store chain Macy’s (NYSE:M) jumped 11.5% in the morning session after the company reported an impressive "beat and raise" quarter. Third quarter results significantly blew past analysts' EPS expectations, driven in part by same-store sales and revenue beats. Full year guidance was also raised slightly across the board, from same-store sales to revenue to EPS, demonstrating confidence in its holiday season strategy amid macroeconomic challenges. The company is focused on utilizing data science tools for inventory management, along with strategic clearance markdowns and promotions as it prepares to meet demand in the coming quarters. Zooming out, we think this was a great quarter that shareholders will appreciate. After the initial pop the shares cooled down to $13.21, up 4.7% from previous close.
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What is the market telling us:
Macy's's shares are very volatile and over the last year have had 18 moves greater than 5%. But moves this big are very rare even for Macy's and that is indicating to us that this news had a significant impact on the market's perception of the business.
Macy's is down 34.4% since the beginning of the year, and at $13.21 per share it is trading 46% below its 52-week high of $24.46 from February 2023. Investors who bought $1,000 worth of Macy's's shares 5 years ago would now be looking at an investment worth $396.85.
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