Macy’s, Kohl’s stocks rise on Q3 earnings

Yahoo Finance's Jared Blikre breaks down how Macy's, Kohl's, and BJ's Wholesale Club stocks are performing after reporting earnings.

Video Transcript

AKIKO FUJITA: We are starting this hour, though, taking a closer look at the moves in retail following the latest round of earnings. Remember that sparked a big selloff yesterday. Well, Macy's this morning seeing a boost on the back of its earnings beat, but it's a different picture for Kohl's. To break it all down, we've got Jared Blikre at the touch for us this morning. Jared.

JARED BLIKRE: That's right. We're looking at our retail heatmap. All the big guys pretty much in the red, except for Target there. But let's take a look at Macy's, leading the pack up 11%. And I'll put a year to date chart. As I go through some of the earnings report, it was a nice beat. They doubled their profits versus estimates. That would be the EPS. And then also big beats on gross margin and also sales.

Here's what Telsey is saying about the results. They're strong and while inventories are impressively under control in a channel that is currently awash in excess merchandise, they give management credit for operational discipline in a volatile macro environment. So all in all, a pretty good execution here noted by Telsey.

Also have another comment by Vital Knowledge. Third quarter results are, quote, "solid," and while some investors may take issue that Macy's didn't bump the annual outlook by as much as the third quarter beat, overall, this company continues to perform much better than people thought possible.

Here is a year to date chart of Macy's. And if we were to draw a trend line down right here, you can see just breaking to the upside of that. And I'll put a three-year chart so we can see what happened over the pandemic. Like a lot of companies, initial burst of enthusiasm or late burst of enthusiasm. It peaked last year, along with a lot of other sectors and stocks, and now trying to find its footing.

Another stock that's in the news, Kohl's basically reaffirming what they broadcast a week ago. Kohl's is a mess, as Brian Sozzi has been noting here. Their departing CEO, that was a surprise. But nevertheless, in August, they expected $2.80 to $3.20 a share in their full year earnings. Retailer on Thursday, they reaffirmed their preliminary third quarter results that were reported last week when they said that their CEO, Gass, would step down.

Now, Kohl's is kind of a different story. You can see over the last three years, pretty much a lot of sideways action there. Want to get to BJ's. This stock is actually heading to the downside. You can see a much better chart right there for this staples.

In their earnings announcement, they said despite beating expectations on the third quarter EPS revenue, the stock is down today. A lot of analysts kind of scratching their heads. Although merchandise gross margin rate, it decreased 30 basis points year over year, full year merchandise gross margin rate also decreased 40 basis points. So kind of in line with what we've seen with a lot of other retailers, especially the big box ones. But that's what we got today, Akiko.