Macy’s shares dropped on Thursday, even though the company posted stronger-than-expected quarterly earnings and raised its outlook for the year. Consumer spending also stayed strong.
The stock fell almost 5% in premarket trading on Thursday. This continued a decline from the previous day, sending Macy’s shares below their 200-day moving average for the first time since May.
For the fiscal second quarter ending August 1, Macy’s reported adjusted earnings of 63 cents per share. This was up from 35 cents a year ago and beat Wall Street’s estimate of 37 cents. Net sales increased 1% to $4.87 billion, above the consensus estimate of $4.81 billion, according to FactSet.
Comparable sales at all Macy’s locations rose 2.7%, beating Wall Street’s forecast of 1% growth. However, this was a bit slower than the previous quarter. Credit card net revenue also increased by 2% to $156 million.
Chief executive Tony Spring said the company is focused on growing the programs that customers like most. He added that, along with careful management, these efforts should help Macy’s build a strong base for steady, profitable growth.
After a strong quarter, Macy’s raised its full-year forecast. The company now expects adjusted earnings of $2.15 to $2.35 per share and net sales between $21.675 billion and $21.825 billion. This is higher than its previous guidance. Macy’s said a 23-cent-per-share tariff refund helped this quarter, with about 18 cents of that included in the new outlook. The midpoint of the new forecast is a bit above Wall Street’s average expectations for both earnings and sales.
Macy’s also increased its full-year forecast for comparable sales growth to a range of 1% to 1.5%. This is up from its earlier estimate of 0.5% to 1.2%.
