Why Macy's Stock Zoomed 31% Higher This Week

Key Points

• Few expected the retailer to do as well as it did in its second quarter.

• Despite declines in key fundamentals, it posted a beat-and-raise quarter.

• 10 stocks we like better than Macy's ›

It wasn't that long ago that Macy's (NYSE: M) was something of a poster child for the retail apocalypse. The company was a supposedly stuck-in-the-past operator burdened with an outdated brick-and-mortar store model.

That once unpopular poster child was looking quite appealing recently, according to data compiled by S&P Global Market Intelligence: The retailer's stock powered 31% higher over the week. Encouraging quarterly results were the foundation for that big leap in price.

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Upside surprises

That sort of catapult happens when a company obliterates performance expectations, and that's precisely what happened with Macy's on Wednesday.

Image source: Getty Images.

For its second quarter, the retailer's net sales amounted to $4.8 billion, which was down slightly from the $4.9 billion in the same period of 2024. Same-store sales, however, inched up by nearly 1% year over year. As for non-GAAP (adjusted) net income, it slid by 24% to $113 million ($0.41 per share).

Analysts were expecting far steeper declines, however. Their consensus for net sales was a bit under $4.7 billion, and that for adjusted profitability was $0.19 per share.

This meant a beat-and-raise quarter for Macy's, as it announced upward adjustments to its guidance for the entirety of 2025. The new top-line anticipation is a range of nearly $21.2 billion to almost $21.5 billion; previously management was modeling $21 billion to $21.4 billion. As for expected profitability, that's been pushed higher to between $1.70 and $2.05. Before, that range was $1.60 to $2.

Price-target bumping

Although no Macy's-following analysts have yet upgraded their recommendations on the stock, several weighed in with post-earnings price-target raises. One of the lifters was Jefferies' Ashley Helgans, who maintained her buy recommendation on the company while cranking her fair-value assessment to $18.50 per share from the preceding $14.50.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Jefferies Financial Group. The Motley Fool has a disclosure policy.