Macy's shares declined by 2.7% despite reporting stronger-than-expected Q2 comparable sales and adjusted EPS, and raising its annual outlook. The drop was attributed to softer Q3 guidance and an annual outlook increase that did not fully reflect the quarterly beat. The company also received $116 million in tariff refunds, using some to lower prices on big-ticket items. Analysts view the guidance gap as evidence that asset-value and turnaround narratives might not offset a declining core earnings base, with a key risk being investor perception of sustained markdown activity.
American Eagle Outfitters' shares slumped over 11% in premarket trading after forecasting a flat gross margin for the quarter. This was due to persistent softness in its core brands, which overshadowed a second-quarter revenue beat. The company is actively clearing older inventory through discounts, as fashion trends shifted, leaving some merchandise out of step with consumer demand. Inventory costs climbed 14% from a year earlier, including costs related to incremental tariffs, and elevated inventory levels remain a concern for its earnings power.
JetBlue Airways Corp. cut its third-quarter available seat miles (ASM) outlook, sending shares lower. The airline now expects ASM to rise between 1.5% and 3.5% from a year earlier, down from its previous forecast of 3% to 6% growth. This reduction is largely due to weather and air traffic control disruptions in the northeastern US, adding pressure to the carrier's financial turnaround efforts. A reduced capacity outlook can be a double-edged signal, potentially supporting fare yields but also risking fixed costs being underabsorbed and limiting the ability to capture peak travel demand.
