NEW YORK (TheStreet) --Shares of Macy's (M) - Get Report were soaring by 16.59% to $39.64 early Thursday morning, as the retail giant reported 2016 second-quarter earnings that beat analyst expectations before the bell today. The company reported earnings of 54 cents per share on revenue of $5.87 billion. Analysts were expecting earnings of 45 cents a share on $5.75 billion in revenue.
Perhaps more indicative of the stock's move today though is the news that Macy's will close 100 department stores by the start of 2017.
Macy's CEO Terry Lundgren joined CNBC's "Squawk Box" Thursday morning to discuss the rationale behind closing 100 stores.
Lundgren, in his over-exuberant tone, emphatically drove home the company's mission to not be complacent with the current retail landscape.
"We're a company that doesn't sit still. If you've seen us through the years, whenever there has been a setback, we've been first in the industry to take an aggressive stance at moving forward. By closing 100 stores, which is never easy, we're getting out in front of this," he explained
Lundgren goes on to describe that there is on average 7.3 square feet, per human being, of retail space in the U.S. "That is five and a half times the number of physical retail locations in America per capita than any other country in the world."
"We're not waiting any longer; we are taking a stance," Lundgren said.
Macy's will take the additional funds from the store closures and make investments.
"It's money, its people and its inventory all being forced back into those remaining stores, which are critically important to us, as well as the digital business and mobile technology investments. They will all benefit from a smaller portfolio," he explained.
Lundgren concluded by commenting that the "bold" move is equally crucial in creating separation between Macy's and the competition.
Separately, TheStreet Ratings rates Macy's as a "Hold" with a ratings score of "C." The primary factors that have impacted TheStreet Ratings rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.
The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins and notable return on equity. However, as a counter to these strengths, TheStreet Ratings also finds weaknesses including feeble growth in the company's earnings per share, deteriorating net income and generally higher debt management risk.
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: M