US stocks drifted higher on Wednesday, and while some investors were focused on the Labor Department’s downward revisions to earlier jobs growth, three key retail names were making big moves — Target (TGT), Macy’s (M), and JD.com (JD).
Target
Target stock jumped as much as 12% after the company reported better-than-expected second quarter results, topping Wall Street expectations on profit and revenue. Gross profit margins rose to 28.9%, up from 27% a year ago.
The retail powerhouse also saw a 3% increase in store traffic during the quarter as it slashed prices this summer on 5,000 daily essentials — items where Target was losing market share to rival Walmart (WMT).
Meanwhile, the Minneapolis-based company said it’s hitting its goals on inventory shrink, which can include theft, damage, or poor record keeping, among other factors.
As Brooke DiPalma reports, on a call with reporters CFO and COO Michael Fiddelke said the company has hit a plateau when it comes to shrink.
“[Inventory shrink] was one of the tailwinds to profit in the quarter, and as we stepped into the year, our aim was to have shrink plateau, and so to improve from the deterioration we’ve seen over the last couple of years, two quarters in — we’re achieving that and then some,” Fiddelke said.
Macy’s
Macy’s stock fell as much as 12% after the company posted another quarter of declining sales a month after turning down a $6.9 billion buyout offer. The retail chain reported net sales dropped 3.8% year over year to $4.9 billion, missing Wall Street expectations of $5.06 billion. Same-store sales also fell 4%.
This quarterly print comes over a month after the company ended conversations involving a potential buyout bid from one of its shareholders, Arkhouse, and its partner, Brigade Capital Management.
Macy’s CEO Tony Spring, who took over the role in February, put forth a strategy earlier this year that includes closing underperforming stores, improving remaining “go forward” locations, and investing in digital sales.
JD.com
JD.com stock fell as much as 5% in US trading after Walmart sold its stake in the Chinese e-commerce giant, raising about $3.6 billion in the sale, according to Bloomberg. JD.com stock tumbled 12% in Hong Kong.
The stake sale puts an end to an eight-year partnership between the two companies amid a challenging landscape for China’s economy. The economic landscape has been impacted by a falling real estate market, high youth unemployment, and trade tensions between Washington and Beijing.
Chinese tech stocks, including Alibaba (BABA), have yet to fully recover after policymakers reversed course in 2022 following a crackdown on the sector.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
