Macy’s stock price extends its bullish run, now up 18% on the week

Macy’s stock price extends its bullish run, now up 18% on the week
  • Macy's reported an adjusted loss of $2.03 per share for the Q1, in line with market expectations
  • Revenue came in slightly better than forecasts, but still $2.5 billion lower than a year ago
  • Macy's share price trades over 3% in the green, now up 18% on the week

Shares of Macy’s (NYSE: M) have extended the bullish weekly run after the company’s quarterly earnings showed that sales matched analysts’ expectations. Macy’s share price is now up over 18% on the week, recovering from the record lows set in April.

Fundamental analysis: Sales match expectations

As expected, Macy’s reported a first-quarter loss. The retailer reported an adjusted loss per share of $2.03, in line with Wall Street expectations. Revenue came in at $3.03 billion, slightly higher than $3.01 billion expected from the market. 

“The first quarter of 2020 was challenging for the country, the industry and Macy’s, Inc. While our stores are re-opened, we expect that the COVID-19 pandemic will continue to impact the country for the remainder of the year,” said Jeff Gennette, chairman and chief executive officer of Macy’s, Inc.

The net loss for the Q1 stands at $3.58 billion, compared with net income of $136 million last year. Macy’s lost nearly $2.5 billion in revenue in the first quarter. 

Gennette says that the business has been performing well lately, following the easing of restrictions. 

“We do not anticipate another full shutdown, but we are staying flexible and are prepared to address increases in cases on a regional level,” he added. 

In May, the retailer warned that the closure of its stores will cost the company up to $1.1 billion. Still, Macy’s reassured investors that it expects to have “sufficient liquidity” to execute on its 2020 priorities. As in May, Macy’s did not offer a 2020 outlook at this time. 

Two months ago, Invezz reported that Macy’s will be removed from the S&P 500 index. Instead, it will be listed on the small-cap S&P 600 index.

Technical analysis: The rally continues

Macy’s share price is up more than 4% on the day to bring weekly gains to nearly 18%. The recovery in stock price has continued since printing the all-time low at $4.38 in April. 

Macy’s stock weekly chart (TradingView)

Shares of Macy’s are now approaching a key short-term resistance at $7.17. A sustainable break above this line opens the door for a trip towards the 100-DMA at $7.91. The long-term resistance for Macy’s stock is located above the $10.00 handle. 

Summary

Shares of Macy’s are up over 4% today after the retailer reported that its first-quarter sales and revenue fell in line with analysts’ expectations. Macy’s share price is now up 18% on the day as recovery from all-time lows set in April continues. 

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