Macys and JC Penney Report Weak Quarters – And Their Stocks Surge

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Yesterday Macy’s (M) reported 1st quarter earnings.  They reported earnings of 2 cents a share on a continuing basis compared to 16 cents last year.  Sales were down 3% and same store sales down 2.6% (M Earnings Release).

The stock surged 3.6% on the day.

This morning JC Penney (JCP) reported results.  Net income was down 50% on a 5% sales decrease and 7.4% same store sales decline (JCP Earnings Release).

The stock is up 5% today.

I dunno.  If I was a stockholder, I’m not too excited about these numbers.  Business is obviously slow.  Profitability is getting hit.  I guess they beat “expectations” but from an absolute standpoint these numbers suggest a tough business environment.

But it’s a very favorable sentiment environment right now.  People are feeling good about stocks.  And really that’s what it comes down to.

Disclosure: Top Gun has no position in Macy’s (M) or JC Penney (JCP) shares.

UPDATE (Fri 5/16, 11:00am PST): The WSJ Online’s MarketBeat blog cited this post yesterday.

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