Macy’s Sets The Pace-y


Image source: Madeleine Stuart / Finimize

What's going on?

American retailer Macy’s reported second-quarter earnings on Wednesday that knocked the socks off expectations, after a stellar first quarter and kickass 2017.

What does this mean?

The presenter of the world’s largest parade (November 22nd, mark your diary) posted profit that was 37% higher than expected and raised its forecast for the rest of the year. Macy’s also surprised and delighted with a boost in its same-store sales (i.e. sales from stores that have been open at least a year) – they grew when they were expected to drop.

Macy’s moved its friends and family discount day (where it rakes in the cash) to the first quarter of 2018, which boosted its results then. It’s typically in the second, so some analysts expected its absence to affect the company’s results – but Macy’s did just fine anyway.

Why should I care?

For markets: Macy’s stock got discounted.

Despite Macy’s excellent results, its stock fell by more than 10% on Wednesday. Maybe it’s doing too well (tweet this): Macy’s shares have doubled over the last year, which may have led some investors to “profit take” and sell some of their Macy’s stock to lock in a positive return on their investment. Others cited concerns about the company still losing to Amazon in certain areas – potentially leading to Macy’s costs rising faster than sales in the future as it battles to win customers back into its stores.

The bigger picture: Maybe there’s room for everybody.

Amazon’s the boogeyman for traditional retailers, with an ever-growing product range and (price) slashing to rival Norman Bates. But US retailers have been standing their ground – retail’s on the up this year and sales increased strongly in July (jumping at clothing stores specifically). More American retailers are due to report second-quarter results on Thursday – which will cement or crumble (or ¯\_(ツ)_/¯ at) retail’s resurgence. In a fit and healthy economy (#goals), there may be space for the Amazons and Macy’s of the world to coexist, each serving their customers in peace.

Originally posted as part of the Finimize daily email.

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