Retail stock giants Macy's and Kohl's made notable moves Thursday on earnings news as consumers began to shift toward holiday shopping. Macy's stock spiked. Kohl's stock shook off premarket loss to advance moderately higher Thursday.
The earnings reports from the two retail stocks comes ahead of the traditional holiday shopping season launch, marked by the Black Friday and Cyber Monday shopping events after Thanksgiving.
Macy's beat financial views Thursday. The department store stock saw EPS drop 58% to 52 cents as revenue fell 4% to $5.2 billion. Same store sales dropped 4.3%. The company also lifted its full-year adjusted EPS guidance to $4.07-$4.27, up from $4.00-$4.20. Macy's maintained net sales projections of $24.3 billion-$24.6 billion.
Inventory expanded 4% year-over-year, but was down 12% versus 2019. Macy's noted continued supply chain volatility and industrywide elevated inventory levels, as well as lean inventory levels experienced in 2021.
Meanwhile retail stock Kohl's topped third-quarter earnings views while just missing on revenue estimates early Thursday. Earnings of 82 cents per share topped views but were 50% below year-ago levels. Sales edged down 7% to $4 billion. Same store sales fell 6.9%.
Landon Luxembourg, a senior analyst at Third Bridge, wrote Thursday that Macy's is "better placed to navigate recessionary headwinds than some of its peers because of its strong value proposition."
The analyst added that retail stock Macy's should do very well over the holiday season but that there is some risk.
Macy's expected a bumpier holiday season, Luxembourg said, so there is a risk of unusually high inventory levels going into 2023, especially "if sales on Black Friday and Christmas are lower than expected."
Retail Stocks: Macy's And Kohl's
Macy's stock shot up 15% in market trading Thursday. M shares had nose-dived 8% to 19.71 Wednesday.
The New York-based retail giant's brands include its flagship Macy's and Bloomingdale's as well as specialty stores like Bluemercury, Bloomingdale's The Outlet and Macy's BackStage. Its 786 stores are spread across the U.S., Puerto Rico and Guatemala. Macy's also runs an e-commerce segment and a mobile app.
The brand sells apparel, accessories, cosmetics, home furnishings and other consumer goods.
Retail stock Macy's ranks fourth the Retail-Department Stores industry group. Macy's stock has a 55 Composite Rating of 98. It has a 39 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share price movement, with a 1 to 99 score. The EPS rating is 46.
On the flip side, as Macy's shot up Thursday, retail stock Kohl's fell 3.4% ahead of market trading before shooting up 5.5% Thursday. On Wednesday, KSS shares sank 7% to 29.80. Kohl's stock has a 25 Composite Rating and a Relative Strength Rating of 18. Its EPS Rating is 9.
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