Macy’s Inc (M) shares experienced volatility in early trading on Thursday following the release of the company’s quarterly earnings report. Despite reporting adjusted earnings of 53 cents per share, surpassing Street expectations of 29 cents per share, the company also announced a steeper-than-expected decline in same-store sales. This mixed performance led to a range of reactions from analysts.
JPMorgan analyst Matthew Boss maintained an Overweight rating on Macy’s, but lowered the price target from $24 to $23. Boss highlighted the company’s strong gross margin expansion, reaching 40.5%, which was attributed to cost controls. He noted a softening in sales performance in the middle of the quarter, linked to soft consumer spending due to macroeconomic uncertainty and ongoing news events. However, Boss expressed optimism about demand trends in late July and early August, driven by promotions and new product offerings.
Dana Telsey, an analyst at Telsey Advisory Group, reiterated a Market Perform rating on Macy’s while reducing the price target from $21 to $17. Telsey attributed the strong earnings beat to better-than-expected expense control and earlier asset sales. She acknowledged the continued macro challenges and elevated promotions impacting the company’s performance but expressed encouragement about the strength in fragrances and growth in women’s ready-to-wear. Telsey highlighted CEO Tony Spring’s ‘Bold New Chapter’ strategy, which includes store closures, expansion in luxury segments, and asset monetization efforts.
Goldman Sachs analyst Brooke Roach reaffirmed a Buy rating on Macy’s but cut the price target from $23 to $20. While acknowledging the disappointing sales deceleration, Roach praised the company’s margin control, leading to outperforming profits and reaffirmed full-year earnings guidance. She highlighted the company’s expectation of sequential improvement in the back half of the year, citing several reasons for optimism.
At the time of publication, Macy’s shares had declined by 0.26% to $15.41. The company’s future performance will be closely watched as it navigates the challenging retail landscape.
