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