Shares of Macy's (M +3.53%) jumped on Wednesday, finishing the day up 20.7%. The surge came as the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) gained 0.5% and 1%, respectively.
The department store chain reported its Q2 earnings this morning, delivering numbers that crushed Wall Street's expectations and raised its full-year outlook.
NYSE: M
Key Data Points
Macy's beats across the board
The retailer reported Q2 adjusted earnings per share (EPS) of $0.41 on sales of $4.81 billion. Wall Street had been expecting just $0.18 a share on sales of $4.76 billion. That's a pretty significant earnings beat.
The company also raised its full-year guidance, now expecting adjusted earnings between $1.70 and $2.05 per share, up from its previous range of $1.60 to $2.00. Revenue guidance inched higher to between $21.15 billion and $21.45 billion from the prior $21 billion to $21.4 billion range.
The improved outlook is particularly notable, given that Macy's cut its guidance just last quarter, blaming pricing pressure from import duties. CEO Tony Spring acknowledged that tariffs remain a real challenge for the business, but pointed to improvements in store experiences and product mix as factors helping to offset those pressures.
Challenges remain for Macy's
The company is making progress with store updates and product selection, but the retailer still faces significant structural challenges in an e-commerce-dominated environment.
While today's results show Macy's transformation is making progress, ongoing import costs remain a significant risk in the short term, and consumer preference for online shopping in the long term. The opportunity is real, but significant challenges remain.
