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Macy's, Gap, Nordstrom earnings — What to know in markets Thursday

Heidi Chung

Several retail heavyweights are gearing up to release quarterly results Thursday. Macy’s (M) will release earnings ahead of the opening bell, while Gap (GPS) and Nordstrom (JWN) round things out after the market close.

If Kohl’s (KSSresults on Tuesday are any indication, the woes that have been plaguing department stores are far from over.

Macy’s stock got pummeled and was the second-worst performing name in the S&P 500 during Tuesday’s session, after both Kohl’s lackluster earnings and reports of a data breach resulted in a flood of selling.

Analysts surveyed by Bloomberg are expecting Macy’s to report an adjusted loss of 1 cent per share on $5.30 billion in revenue during its third quarter. The department store is largely expected to report weak sales driven by continued gross margin compression. Same-store sales, a key metric for retailers, is estimated to have fallen 0.4%.

Commentary regarding tariffs and the holiday shopping season will be focal points for both investors and analysts. Macy’s previously raised prices of certain products such as luggage and housewares but quickly found that consumers did not have an appetite for such hikes.

Macy’s stock is down a whopping 46% so far this year.

Similarly, Gap will likely also announce weak third-quarter sales and outlook when it releases results after the market close. Earlier this month, the retailer caught investors off guard when it abruptly announced that president and CEO Art Peck would be stepping down from his role. Robert Fisher, who previously served as Gap’s non-executive chairman, would step in as interim CEO.

Gap also slashed its full-year adjusted earnings guidance. The lowered outlook and c-suite shakeup sent the stock tanking in extended trade November 7. The company’s CFO Teri List-Stoll said, “This was a challenging quarter, as macro impacts and slower traffic further pressured results that have been hampered by product and operating challenges across key brands.”

Analysts polled by Bloomberg are expecting Gap to report adjusted earnings of 51 cents per share on $3.97 billion in revenue during Q3. Same-store sales are anticipated to have plunged 4%.

Clothes are seen on display at the Nordstrom flagship store during a media preview in New York, U.S., October 21, 2019. REUTERS/Shannon Stapleton

Meanwhile, when Nordstrom releases third-quarter earnings, investors will be looking for commentary from management regarding the new flagship Nordstrom women’s store in New York City. The store opened on October 24, and Nordstrom called the new store opening its “largest single-project investment in Nordstrom history.”

While Nordstrom also faces the same challenges as its department store peers, analysts largely expect the company to see continued strength in its digital strategy. Same-store sales could see a bit of decline. However, Nordstrom Rack could help to offset some of the weakness, according to Wall Street.

Nordstrom is expected to report adjusted earnings of 63 cents per share on $3.52 billion in revenue. The options market is implying a 10.3% one-day move in either direction following the company’s announcement.

Shares of the department store have tumbled 24% this year and have underperformed the S&P 500’s 26% gain in the same time period.

Other notable reports scheduled for Thursday include BJ’s Wholesale Club (BJ) and Jack in the Box (JACK) before market open, and Ross Stores (ROST) after market close.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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