Macy's Inc.'s shares rose in midday trading on Jan. 8 after reporting year-over-year holiday sales declines that were less than analysts expected.
The retailer said comparable sales on an owned and licensed basis fell 0.6% in November and December 2019, while comparable sales on an owned basis fell 0.7%. Shares surged as much as 7% in premarket trading following the news before settling to a 1.5% gain at $17.93 by midday.
"It was a better performance than anticipated," Moody's Vice President Christina Boni said in an interview. "Clearly it's a sequential improvement over [the third quarter] and many of their strategies obviously contributed to the relative improvement."
The expectations for department stores for the fourth quarter including the holiday season were "somewhat low", Boni said.
Macy's Chairman and CEO Jeff Gennette said in a Jan. 8 statement that the retailer's gifting assortment and marketing strategy, particularly in the 10 days before Christmas contributed to the retailer's performance.
Alex Arnold, managing director at Odeon Capital, also said the retailer's holiday sales were better than expectations, which contributed to the market's favorable reaction.
Analysts expect same-store sales for the retailer's fourth-quarter, which includes the holiday period and January, to fall by 2% according to data compiled by S&P Global Market Intelligence.
Macy's also plans to close 28 Macy's locations and one Bloomingdale location, as many retailers continue to reevaluate their store footprint. During its fiscal third quarter, the retailer reported weaker-than-expected performance in its lower-tier mall locations, which contributed to the decision to cut its full-year guidance for 2019.
"We will provide an update on our growth strategy and three-year plan, including details on our stores' segmentation strategy, at Investor Day on [Feb.5]," Macy's said in an emailed statement to Market Intelligence.