Transcript for Macy's Shares Surging
I'm Michelle Franzen a New York is the financial markets close on Wall Street for Wednesday November 12 at the stories doc. And the world's largest department store chain Macy's climbing on Wall Street today after reporting better than expected earnings. The retailer synonymous with that Thanksgiving Day parade and 34 street holiday decorations. They don't let cut expenses and give investors. Only bit of holiday cheer. And explain why I am joined by Michael Regan editor at Bloomberg hi Michael tie things from. Macy's shares were surging today although rep didn't top estimates that it cut its profit forecast why were investors pushing the stock higher what she. Said there earnings actually did the profit rather than sales actually did beat Wall Street's estimate by about 22% which is that. The best beat they've had in about two years at Macy's. Adding cameras about 23% to 217 million dollars so although sales were down for the quarter they they were able to cut expenses and beat earnings assessments. He also sounded some pretty optimistic tones about the fourth quarter which is obviously their most important. So executives all on the conference call and in their earnings statement. Now it's selling very optimistic about the product mix apple have in time for the holidays is balls their ability to. Shipped from the holidays to the sort of vacation and resort where season which you know comes right on the heels of the Christmas season. Are watching some. Both big. Through cost cuts you know they're able to reduce their main expense line by almost a hundred million dollars in the quarter. And they can don't a lot of details about how they did that boat what thing that a cup you like Macy's benefited from in the third quarter is a very strong dollar. You know of course Macy's a lot of their goods are imported from other countries. So if the dollar is stronger that allows them to buy goods at discounted rate even if you know that their producers. For suppliers aren't discounting in the local currency got stronger dollar allows them to really. Buy more at a at a lower dollar based costs so that that's certainly part of it the square for bases and a lot of retailers that rely on imported goods. And Mazie CEO Terry Lundgren said that the company would open earlier on Thanksgiving. Do they anticipate a better Black Friday in holiday sales period because they will be opening earlier. Most certainly getting another two hours they plan to open about 6 PM on Thanksgiving and you know what had. While lot of people certainly would like to keep Thanksgiving a holiday with a family there's they're certainly plenty of people were you know rare Miguel and get out shopping so. That extra two hours certainly will help especially compared to last year. Otherwise there's a lot of just general macroeconomic. Trends that should help them enough. The quarter you know the unemployment rate at this time last year was seven point 2% and it's now fall to about five point 8%. With the price of gasoline is in the neighborhood of 20% cheaper than it was last year. And don't forget that winner last year that very frigid cold winner kept a lot of people inside buying gifts online rather than venturing out to them also. It with any luck it 88 if there's not that sort of really terrible winner that can help too so there are. A lot of sort of tale wins from the macro perspective. At the back of Macy's and other retailers don't you know this holiday season. Macy's also announced a pilot program of same day delivery in select markets. Does this push the needle in its efforts to take and companies like Amazon.com. And other. Online. Giant. Right well obviously same day delivery is such the holy Grail of retelling you know it's why Amazon is investing. Someday use drones to deliver in real time. This like you said is a pilot program it's only handful of their Macy's and Bloomingdale's locations. And your Amazon is a very tough company to compete with because they released sacrificed profitability. In that. Present tense for the gaining critical mass and having people really get sucked in a very good system and use them as their go to. Destination for online retail so it's it's a very tough company to to compete with then. You know this is sort of there is you know dipping their toe in the water to see how how they can do this how how can they deliver. You know the same day to customers and about a dozen stores so it's certainly an important test for them and and you know time will tell whether or not it's it's really the right Rupert for them ago. Sounds like the calm before the shopping storm Michael Regan from Bloomberg thanks for joining us thank you. Even watching stories stock stay with abcnews.com. For your latest headlines I'm Michelle Franzen in New York.
This transcript has been automatically generated and may not be 100% accurate.