Shares of Macy’s, Dollar Tree and Dollar General jumped on Thursday after all three retailers reported profits that defied Wall Street’s expectations, and cut against recent concerns about the health of American consumers.
Macy’s shares rose 14 percent, after the company said net income for the three-month period ending April 30 grew to $286 million from $103 million in the same period a year earlier, which the company described as “solid.” The company also raised its annual profit guidance, saying that shoppers had shifted away from the active and leisure wear of the pandemic.
“We saw a notable shift back to occasion-based apparel and in-store shopping, as well as continued strength in sales of luxury goods,” Macy’s said in its earnings statement.
Dollar Tree’s results also beat expectations, with net sales climbing 6.5 percent in the quarter, while Dollar General reported an increase of 4 percent in net sales. Shares of Dollar Tree jumped 19 percent and Dollar General rose 14 percent.
The better-than-expected results could help ease concerns about how supply chain woes and rising prices could hit consumer spending, which accounts for the bulk of economic activity in the United States. Those worries came to the forefront last week after Target and Walmart reported disappointing results and said inflation had taken a toll on profits.
Macy’s and the dollar stores are not the only retailers faring better than analysts had forecast. On Wednesday, Nordstrom’s profits and sales beat expectations, while Dick’s Sporting Goods said consumer spending remains strong. Nordstrom shares were up 3 and Dick’s Sporting Goods rose 4 percent on Thursday, after both jumped sharply on Wednesday.
The retailers are still striking a note of caution, however. Dollar General said it still faces supply chain problems and the pressure of inflation, which has raised the cost of goods, and Dick’s on Wednesday said that it lowered its outlook for the year because of the “overall economic landscape.”
“The pressure that our consumer and the consumer in general have is something that we wanted to not ignore and wanted to address that upfront,” Navdeep Gupta, the company’s chief financial officer, said on a call with analysts.
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