Macy's raised its earnings and sales forecast. Why did the stock fall?

Shares of the US department store chain Macy's fell despite the strongest quarterly sales in three years and an increase in the company's profit and revenue forecasts. Analysts attribute the decline to investors' wary attitude to the company's warnings about weak demand from low-income customers and more cautious consumer behavior ahead of the holidays.

Macy's, a major department store chain in the US, has raised its sales forecasts for the fourth quarter of 2025. This may signal that shoppers continue to spend money despite widespread market fears of declining consumer activity, Quartz writes.

- The company said it expects fourth-quarter adjusted earnings per share in the range of $2 to $2.2, compared with a previous forecast of $1.70-$2.05, and net sales revenue of $21.5 billion to $21.6 billion, versus a previous forecast of $21.2-$21.45 billion.

- In addition, the company recorded sales growth of about 3 percent in the quarter ended Nov. 1, the strongest in more than three years, Macy's said. And CEO Tony Spring attributed the improved results to shoppers responding positively to changes Macy's is making to its traditional department stores. For example, expanding its staff and bringing in new brands like premium home goods maker MacKenzie-Childs, CNBC wrote.

- The company's third-quarter revenue was $4.71 billion versus expectations of $4.62 billion, down 0.6% from the same quarter a year earlier.

Overall, however, the results, Quartz summarizes, confirmed a growing trend in U.S. retailing: consumers are still willing to spend money, but are doing so more selectively.

Despite the results exceeding analysts' expectations, the retailer's shares were down nearly 5% at the premarket on December 3, but later corrected the decline and are now trading about 1% below yesterday's closing price. Bloomberg attributes the decline to the fact that in the report Macy's pointed to a possible decline in demand in the current quarter from low-income shoppers.

Since the beginning of the year, the company's securities have added about 33%. This is higher than the growth of the S&P 500 index, which amounted to 16% over the same period.

However, against the background of updated expectations, some analysts are skeptical about Macy's: UBS experts, for example, see the potential for the retailer's shares to decline by almost 70%. As a whole Wall Street analysts adhere to neutral position on company's securities. From 14 analysts, that observe Macy's shares, 11 advise to keep them in a portfolio and one recommends to buy and sell.

This article was AI-translated and verified by a human editor