As we highlighted last week, the consumer sentiment index took a relative plunge at the end of July. The index gauging American consumers’ confidence in the economy dropped 4% between July and June. What followed was a mini-sell off in the retail sector on the stock market, featuring companies such as JCPenny, Kate Spade, and Kohls.. With a decreasing consumer confidence, the first industry to suffer consequences tends to be the retail/apparel sector, as consumers tone down their personal spending.
Flash-forward to this week:
Macy’s released its quarterly earnings report this morning. The company’s second quarter sales AND earnings both topped investment analysts’ projections. Within the ER, Macy’s also disclosed that it would be shutting down at least 100 department stores while attempting to grow its online business. It seems the combination of a minor downsizing strategy and some better-than-expected financials made a whole lot of investors happy. You know why? Well…
Peep this chart bruh:
As you can see, Macy’s mo-fuggin’ stock shot up nearly 17% today following the release of the firm’s earnings report. Not only that, but Macy’s stock soared higher than it has in over 3 months. Talk about a solid 1-2 counter-punch from the department store retailer.
But investors weren’t done with just Macy’s. It seems Macy’s earnings report and underlying corporate strategy have provided investors with a newfound optimism regarding the retail sector. Not only did Macy’s stock pop on the news, but so did many of the retailers we covered last week: