What Happened?
Shares of department store chain Macy’s (NYSE: M) jumped 5.1% in the afternoon session after the company reported stronger-than-expected fourth-quarter results that topped Wall Street estimates, driven by a surprise growth in a key sales metric.
For its fourth quarter, Macy's announced net sales of $7.92 billion and adjusted earnings of $1.67 per share. While these figures represented a slight decline from the previous year, they both came in ahead of analyst forecasts. The company's same-store sales, a key retail metric, grew 1.8%, which was a significant positive surprise. Looking ahead, the company provided a mixed outlook. Its full-year revenue guidance came in above expectations, but its earnings per share forecast for the upcoming year fell short of analysts' projections. Despite the weaker profit outlook, investors appeared to focus on the strong quarterly performance and positive revenue forecast.
After the initial pop the shares cooled down to $17.61, up 4.1% from previous close.
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What Is The Market Telling Us
Macy’s shares are very volatile and have had 24 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 19 days ago when the stock dropped 3.7% on the news that the release of a stronger-than-expected Producer Price Index (PPI) for January, fueled concerns about inflation and its impact on consumer spending.
The U.S. Bureau of Labor Statistics reported that the PPI, a measure of wholesale prices, rose 0.5% in January, exceeding economists' expectations. A significant driver of this increase was a 0.8% advance in the index for final demand services. Specifically, the data showed a sharp 2.5% jump in margins for trade services, which reflects the profits received by wholesalers and retailers. This suggests that businesses are passing on higher costs, potentially including import tariffs, to customers. With recent data also showing a rise in consumer loan delinquencies, investors are worried that already-stretched households will cut back on discretionary purchases, negatively affecting companies tied to consumer spending.
Macy's is down 22.6% since the beginning of the year, and at $17.61 per share, it is trading 27.1% below its 52-week high of $24.15 from December 2025. Investors who bought $1,000 worth of Macy’s shares 5 years ago would now be looking at only $940.71.
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