Shares of Macy's were surging in premarket trading Thursday after the retailer reported better-than-expected earnings on the tails of competitor Nordstrom's strong quarter.
Macy's (ticker: M) posted an adjusted profit of $1.08 a share on $5.35 billion in sales. Analysts were expecting the department store to earn 82 cents a share, more than double the 39 cents in the year-ago period, on revenue of $5.33 billion, up from $4.71 billion last year.
"While macroeconomic pressures on consumer spending increased during the quarter, our customers continued to shop," said CEO Jeff Gennette. "We saw a notable shift back to occasion-based apparel and in-store shopping, as well as continued strength in sales of luxury goods."
The company reaffirmed its sales guidance, saying it continued to expect net sales between $24.4 billion and $24.7 billion for the 2022 fiscal year. The company boosted its earnings guidance to a range of between $4.53 and $4.95, up from $4.13 to $4.52 issued in February.
Macy's stock was spiking nearly 16% to $22.22 in premarket trading on Thursday.
The results come on the heels of a better-than-expected report from fellow department store Nordstrom (JWN), which bucked this earnings season's trend of gloomy outlooks with a robust increase to its forecast .
That said, Nordstrom tends to cater to a wealthier clientele than Macy's. Kohl's (KSS), by contrast, disappointed when it reported results last week.
Retailers in general have been fairly split this quarter, as those with a lower-income core customer, like Walmart (WMT) seeing shoppers pull back a bit. Those higher up the income scale haven't seen much demand destruction.
Macy's tends to fall somewhere in the middle, so the market will want to know how its consumers are handling the current environment, as well as whether or not the company has been able to navigate supply-side demands, like higher transit costs, that have weighed on so many retailers recently.