Macy's Guidance Underwhelms; American Eagle Rallies on Earnings | Stock Movers

On this episode of Stock Movers with Lisa Mateo:

- Shares of Macy's (M) declined ahead of the opening bell after its profit forecast for the current quarter disappointed investors, overshadowing solid results in the lead-up to the holiday shopping season. The company said it expects its adjusted diluted earnings per share to range between $1.35 to $1.55 in the current quarter. The midrange of that forecast is below the average estimate of analysts. Macy’s Chief Executive Officer Tony Spring struck a cautious note on consumer spending in the coming weeks, saying in an interview that guidance was “prudent” and that the company is facing strong results from a year ago.

- Shares of American Eagle Outfitters (AEO) rallied ahead of the US market open after the company posted third-quarter results that outpaced expectations and raised its outlook as the apparel chain pivots quickly from weakness earlier this year. Comparable sales are expected to rise in the low single digits for the full fiscal year, the company said in a statement, up from its previous view that they’d be flat. Revenue and earnings per share for the third quarter also surpassed the average of analyst estimates.

- Shares of Marvell Technology (MRVL) rallied in the early session after the chipmaker said during its conference call that it expects data center revenue to grow by more than 25% next fiscal year. The company also announced plans to acquire startup Celestial AI for about $3.25 billion. On a post-earnings conference call with analysts, Marvell said it’s now more bullish about revenue growth next year and predicted that custom chip sales will increase 20%. Large customers have renewed orders, and Marvell said there won’t be a repeat of previous “air pockets,” when sales in that unit have declined.

(Bloomberg) -- Macy’s Inc. shares declined after its profit forecast for the current quarter disappointed investors, overshadowing a solid lead-up to the holiday shopping season.

Despite posting better-than-expected results, the company pointed to the potential for soft demand from low-income shoppers this quarter. Macy’s expects its adjusted diluted earnings per share to range between $1.35 to $1.55 in the current quarter, the midpoint of which is below the average estimate of analysts.

The stock fell about 2% on Wednesday and came after the shares had jumped 34% this year, including big gains over the past week or so as other retailers posted positive results.

Expectations for Macy’s were high after a string of guidance boosts from other retailers suggested that shoppers are still willing to spend for what they perceive as good value. Chief Executive Officer Tony Spring struck a cautious note on consumer spending in the coming weeks, saying in an interview that guidance was “prudent” and that the company is facing strong results from a year ago.

The retailer also attracts a more aspirational customer during the holidays, who might be more careful opening their wallet, he said.

The company handily beat Wall Street’s estimates for its most recent quarter and raised its annual sales guidance, showing that some consumers are still spending despite their economic concerns.

CEO’s Plan

Since Spring took the top job in 2024, he has focused on investing in the Macy’s stores he thinks have the greatest potential to sell more by increasing staffing and marketing as well as updating displays.

But Spring faces challenges to recover Macy’s former glory. The department store has lost more than one-quarter of its market share since 2012 to off-price retailers, brands themselves and Amazon, UBS analysts led by Jay Sole wrote in a Dec. 1 research note. The company has said it will close about 150 underperforming locations through 2026.

Macy’s, the largest US department-store chain, raised its outlook for net sales to a range of $21.5 billion to $21.6 billion, higher than its prior guidance.

The stronger sales resulted in better-than-expected profit in the most recent quarter, with tariff mitigation efforts and cost cutting also contributing.

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