Thursday looked like it would be another weak day for the stock market, as investors reacted negatively to comments from various Federal Reserve officials about interest rates. Futures contracts on major market benchmarks were lower by around 1%.

Market participants have gotten a chance to digest financial results from a number of retail companies this week, and several more came out with their quarterly reports late Wednesday and early Thursday. Two particularly strong performers were Bath & Body Works (BBWI 2.47%) and Macy's (M -0.66%), bringing some light to what otherwise looked like a gloomy start to the day on Wall Street.

Getting ready for the holidays

Shares of Bath & Body Works showed substantial gains, rising 17% in premarket trading Thursday morning. The company's third-quarter financial results from late Wednesday afternoon indicated resilience in its business even under tough conditions, and Bath & Body Works expressed optimism about its future as the important holiday season approaches.

The headline numbers from Bath & Body Works actually didn't seem like they'd inspire a big rise in the share price. Sales of $1.6 billion were down 5% year over year, although they were up 46% compared to pre-pandemic levels in the same period during 2019. Bath & Body Works also saw its bottom line take a substantial hit, with adjusted earnings from continuing operations of $0.40 per share, down from $0.92 per share in the year-ago period.

However, Bath & Body Works sees the full year turning out better than it had previously predicted. The maker of personal care and fragrance products announced a range of expected earnings of between $3 and $3.20 per share, up from its previous forecast of $2.70 to $3 per share. Roughly half of that amount is seen coming from the fourth quarter, with guidance set for between $1.45 and $1.65 per share.

Some skeptics fear that Bath & Body Works is already discounting an anticipated recovery, leaving it vulnerable to further economic pressures. For now, though, shareholders seem happy that the news isn't worse, and they're hoping that the retailer can generate more upward momentum between now and the end of the year.

Macy's gets ready for the parade

Meanwhile, Macy's picked up more than 8% in premarket trading. That was enough to offset the 8% decline the retailer's stock suffered on Wednesday, as Macy's did enough to distinguish itself from other hard-hit department store retailers to reassure its shareholders.

Macy's third-quarter results were mostly weaker. Net sales came in at $5.2 billion, which was down 3.9% year over year but up about 1% compared to pre-pandemic levels in late 2019. A 9% year-over-year decline in digital sales was a substantial contributor to the overall revenue weakness for the department store operator. Comparable sales fell 3.1%.

The same pressures affecting other retailers hit Macy's as well. Gross margin levels fell more than 2 percentage points to 38.7%, with more extensive promotional and permanent markdowns across slower-moving categories of products such as casual apparel, home furnishings, and seasonal goods. In the end, that caused adjusted earnings to fall 58% to $0.52 per share.

Shareholders were pleased, though, to see Macy's provide positive guidance for the full year. The company still sees revenue of between $24.34 billion and $24.58 billion for 2022, but it boosted its earnings projections by $0.07 per share to a new range of $4.07 to $4.27 per share.

Retailers are counting on a strong holiday season to get their businesses back on an upward trajectory. If they can follow through, it'll be good news for shareholders, but disappointment could end up prolonging the bear market into 2023.