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The market expects Macy's (M) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended July 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on September 10, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This department store operator is expected to post quarterly earnings of $0.37 per share in its upcoming report, which represents a year-over-year change of -9.8%. Revenues are expected to be $4.82 billion, up 0.2% from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Macy's, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +20.81%. On the other hand, the stock currently carries a Zacks Rank of #2. So, this combination indicates that Macy's will most likely beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Macy's would post earnings of $0.02 per share when it actually produced earnings of $0.13, delivering a surprise of +550.00%. Over the last four quarters, the company has beaten consensus EPS estimates four times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Macy's appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Another stock from the Zacks Retail - Regional Department Stores industry, Macy's (M), is soon expected to post earnings of $0.37 per share for the quarter ended July 2026. This estimate indicates a year-over-year change of -9.8%. Revenues for the quarter are expected to be $4.82 billion, up 0.2% from the year-ago quarter. Over the last 30 days, the consensus EPS estimate for Macy's has remained unchanged. Nevertheless, the company now has an Earnings ESP of +20.81%, reflecting a higher Most Accurate Estimate. This Earnings ESP, combined with its Zacks Rank #2 (Buy), suggests that Macy's will most likely beat the consensus EPS estimate. The company beat consensus EPS estimates in each of the trailing four quarters. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Macy's, Inc. (M) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Macy's (M), which belongs to the Zacks Retail - Regional Department Stores industry. When looking at the last two reports, this department store operator has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 279.58%, on average, in the last two quarters. For the last reported quarter, Macy's came out with earnings of $0.13 per share versus the Zacks Consensus Estimate of $0.02 per share, representing a surprise of 550.00%. For the previous quarter, the company was expected to post earnings of $1.53 per share and it actually produced earnings of $1.67 per share, delivering a surprise of 9.15%. With this earnings history in mind, recent estimates have been moving higher for Macy's. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the company is positive, which is a great sign of an earnings beat, especially when you combine this metric with its nice Zacks Rank. Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Macy's currently has an Earnings ESP of +20.81%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #2 (Buy) indicates that another beat is possibly around the corner. We expect the company's next earnings report to be released on September 10, 2026. With the Earnings ESP metric, it's important to note that a negative value reduces its predictive power; however, a negative Earnings ESP does not indicate an earnings miss. Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate. Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Macy's, Inc. (M) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Five Below, Inc. FIVE reported strong second-quarter fiscal 2026 results, with the top and bottom lines beating the Zacks Consensus Estimate and increasing year over year. Robust traffic, double-digit comparable sales growth and new store openings supported the performance, while margin expansion boosted profitability. Following the better-than-expected second-quarter results and continued business momentum, management raised its fiscal 2026 sales and earnings outlook. As a result, shares of FIVE rose approximately 6.2% in after-hours trading on Sept. 2 following the announcement. Five Below, Inc. price-consensus-eps-surprise-chart | Five Below, Inc. Quote FIVE posted adjusted earnings per share of $1.68, surpassing the Zacks Consensus Estimate of $1.34. The bottom line surged 107.4% from 81 cents in the year-ago quarter. Earnings were $3.99 per share compared with 77 cents a year earlier. The adjusted figure excludes tariff refunds and related interest, as well as retention-award expenses, net of tax. Tariff refunds and related interest contributed $2.33 per share to GAAP earnings.Net sales increased 22.9% year over year to $1,261.5 million from $1,026.8 million. The top line exceeded the Zacks Consensus Estimate of $1,192 million.Comparable sales (comps) rose 14.1%, marking the fifth consecutive quarter of double-digit growth. Management reported two-year stacked comp growth of 26.5%. The increase was primarily driven by higher transactions and robust traffic, with broad-based gains across customer groups, geographies and product categories.Trend-focused assortments, licensed merchandise and summer and back-to-school collections supported customer engagement. Management highlighted social and digital marketing, along with improvements in the shopping experience, as drivers of customer acquisition and repeat visits. Adjusted gross profit grew 30.8% year over year to $449.1 million from $343.3 million. The adjusted gross margin expanded approximately 220 basis points (bps) to 35.6%, which beat our estimate of 35.4%. Higher merchandise margins, fixed-cost leverage from strong comps and an improved shrink reserve rate supported the increase, partly offset by higher fuel costs.Adjusted selling, general and administrative (SG&A) expenses, including depreciation and amortization, totaled approximately $336 million, or 26.6% of sales. The expense ratio improved approximately 140 bps year over year as fixed-cost leverage more than offset increased marketing investments and incremental labor costs associated with the timing of physical inventory counts.Adjusted operating income increased 105.3% to $113.2 million from $55.1 million. The adjusted operating margin expanded approximately 360 bps to 9%, which surpassed our estimate of 7%. Adjusted net income more than doubled to $93.4 million from $44.8 million. Five Below opened 52 net new stores during the quarter and ended the period with 2,022 stores across 46 states, representing 8.8% year-over-year store growth. Management highlighted strong new store productivity and continued opportunities to expand the chain.The company entered Idaho, its 47th state, in August and plans to enter Puerto Rico in the second half of 2027. It expects approximately 40 net new stores in the fiscal third quarter and continues to target approximately 150 net new stores for fiscal 2026. Five Below ended the quarter with cash and cash equivalents of $561.1 million and short-term investment securities of $626.8 million. Total shareholders’ equity was $2,476.1 million as of Aug. 1, 2026. Management noted that the approximately $1.2 billion cash and investment balance included about $170 million in pretax tariff refunds.Inventory totaled $941.2 million, up 17.7% year over year. Average inventory dollars per store increased approximately 8%, while units per store were slightly lower. Capital expenditures totaled $110.4 million in the first six months of fiscal 2026.The company repurchased approximately 311,000 shares for about $60 million during the quarter. On Aug. 29, the board authorized a new $600 million share repurchase program, replacing the remaining capacity under the prior authorization. The new program has no fixed expiration date. For the third quarter of fiscal 2026, Five Below expects net sales of $1.21 billion to $1.23 billion, supported by comps growth of 8-10%. Net income is projected at $56 million to $63 million, with EPS of $1.01 to $1.13.Management expects the third-quarter adjusted operating margin to reach approximately 6% at the midpoint, up 160 bps year over year. Adjusted gross margin is projected to expand about 100 bps, supported by fixed-cost leverage and higher merchandise margins, partly reflecting lower tariff costs. Higher outbound transportation fuel costs and an unfavorable shrink comparison are expected to partially offset these benefits.For fiscal 2026, management raised its sales outlook to $5.63 billion to $5.71 billion from $5.40 billion to $5.48 billion. Comps are expected to increase 10-12% compared with the prior forecast of 6-8%. Adjusted operating margin is projected to expand approximately 250 bps year over year to 12.5% at the midpoint.Adjusted net income is expected to range from $546 million to $572 million, up from $482 million to $504 million. Net income is expected to range from $672 million to $698 million, up from $480 million to $502 million. Adjusted EPS is projected at $9.83 to $10.31 compared with the previous range of $8.65 to $9.05.Gross capital expenditures are expected to total $250 million to $260 million, up from $230 million to $250 million, reflecting investments in new stores, the shopping experience, infrastructure and technology. The outlook incorporates tariff rates currently in place and excludes future tariff refunds and share repurchases. Full-year adjusted earnings also exclude tariff refunds and related interest already recorded, as well as retention awards, net of tax. FIVE Stock Past Three-Month Performance Image Source: Zacks Investment Research FIVE’s shares have gained 26.5% over the past three months as compared with the industry’s growth of 3.4%. FIVE currently carries a Zacks Rank #2 (Buy). We have highlighted three other top-ranked stocks, namely, Target Corporation TGT, Macy's, Inc. M and Ross Stores Inc. ROST.Target Corporation offers guests fashionable, differentiated merchandise and everyday essentials at discounted prices. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Target’s current fiscal-year earnings and sales suggests growth of 37.7% and 4.7%, respectively, from the year-ago actuals. TGT delivered a trailing four-quarter average earnings surprise of 10.5%.Macy's sells a wide range of merchandise, including men’s, women’s and children’s apparel and accessories, cosmetics, home furnishings and other consumer goods. The company carries a Zacks Rank #2 at present. The Zacks Consensus Estimate for Macy's current fiscal-year earnings and sales suggests a decline of 4.3% and growth of 0.1%, respectively, from the year-ago actuals. Macy's delivered a trailing four-quarter average earnings surprise of 211%.Ross Stores operates as an off-price retailer of apparel and home accessories. The company also holds a Zacks Rank #2 at present. The Zacks Consensus Estimate for Ross Stores’ current fiscal-year earnings and sales indicates growth of 32.8% and 12%, respectively, from the year-ago actuals. ROST delivered a trailing four-quarter average earnings surprise of 11.2%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Five Below, Inc. (FIVE) : Free Stock Analysis Report Macy's, Inc. (M) : Free Stock Analysis Report Target Corporation (TGT) : Free Stock Analysis Report Ross Stores, Inc. (ROST) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Recently, Macy's reported that analysts have raised earnings estimates ahead of its September 10, 2026 quarterly update, even as consensus points to lower EPS and only slight revenue growth versus the prior year. This combination of improved analyst sentiment, a valuation discount relative to multiline retail peers, and tempered profit expectations highlights how expectations around execution may be shifting more than the near-term fundamentals. Now, we'll explore how this renewed analyst confidence, reflected in upgraded earnings estimates, could influence Macy's existing turnaround-focused investment narrative. Capitalize on the AI infrastructure supercycle with our selection of the 55 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. To own Macy’s today, you generally need to believe its omni channel turnaround and store optimization can offset pressure on discretionary spending and traditional department store traffic. The recent uptick in analyst earnings estimates ahead of the 10 September 2026 report supports the short term catalyst of improved execution confidence, but it does not materially change the biggest risk right now, which is that ongoing shifts to e commerce and off mall retail keep chipping away at store based sales. One recent development that ties directly into this improved sentiment is Macy’s June 2026 decision to raise full year 2026 net sales guidance to US$21.5 billion to US$21.75 billion, even as near term earnings expectations remain muted. That guidance increase, alongside ongoing buybacks and dividend payments, fits with the turnaround focused narrative, but the real test will be whether upcoming quarters can sustain revenue and margin progress without relying too heavily on cost cuts or financial engineering. Yet beneath this renewed optimism, investors should be aware of how persistent shifts toward digital first shopping could still... Read the full narrative on Macy's (it's free!) Macy's narrative projects $20.7 billion revenue and $664.5 million earnings by 2029. This assumes a 3.0% yearly revenue decline and a slight earnings decrease of $2.5 million from $667.0 million today. Uncover how Macy's forecasts yield a $22.77 fair value, in line with its current price. Some of the most optimistic analysts were assuming roughly flat revenue near US$22.6 billion and earnings around US$660 million by 2029, which is far more upbeat than consensus and leans heavily on stronger omni channel gains and private label growth, so you should recognize how widely views can differ and consider how this latest bout of analyst confidence might reshape both that bullish case and the concerns about slow progress on closing underperforming stores. Explore 5 other fair value estimates on Macy's - why the stock might be worth over 4x more than the current price! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Macy's research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision. Our free Macy's research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Macy's overall financial health at a glance. The market won't wait. These fast-moving stocks are hot now. Grab the list before they run: Uncover the next big thing with 22 elite penny stocks that balance risk and reward. The latest GPUs need a type of rare earth metal called Neodymium and there are only 30 companies in the world exploring or producing it. Find the list for free. The future of work is here. Discover the 37 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include M. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Burlington Stores, Inc. BURL reported second-quarter fiscal 2026 results, with the bottom line surpassing the Zacks Consensus Estimate but revenues falling short. Still, both earnings and sales increased sharply year over year. The off-price retailer benefited from merchandise-margin expansion, supply-chain productivity, and adjusted selling, general and administrative (SG&A) leverage, enabling the company to post its 15th consecutive quarter of double-digit underlying earnings growth.Management highlighted solid execution across merchandising, inventory management, store operations and the supply chain. Beauty and accessories were the strongest categories, while the Home business began outperforming the chain late in the quarter. The Northeast and Midwest led regional performance, while the Southwest trailed. New stores remained a major growth driver, with the company adding 45 net new stores during the quarter.Despite the earnings beat and an increase in the fiscal 2026 guidance, investors reacted negatively to the results, sending shares down more than 7.6% yesterday. The sell-off appears to have reflected the revenue shortfall, comparable sales at the midpoint of guidance and a third-quarter forecast that incorporates year-over-year margin contraction and lower earnings per share (EPS) as tariff refunds are reinvested. Management's more cautious assessment of spending pressure on moderate- and low-income households may have weighed on sentiment. Burlington Stores, Inc. price-consensus-eps-surprise-chart | Burlington Stores, Inc. Quote Burlington Stores reported adjusted earnings of $2.96 per share, comfortably beating the Zacks Consensus Estimate of $2.18. Adjusted EPS increased 86.2% from $1.59 in the year-ago quarter. The results included a 64-cent-per-share benefit from $55 million in tariff refunds. Excluding the refunds and expenses associated with bankruptcy-acquired leases, adjusted EPS was $2.37, up 38% from $1.72 a year earlier and above management's guidance of $2.05-$2.20.Total revenues increased 11% year over year to $3,002 million but missed the Zacks Consensus Estimate of $3,029 million. Net sales rose 11% to $2,998 million from $2,701 million in the prior-year quarter.Comparable store sales increased 2%, at the mid-point of management's guidance of 1-3% and on top of 5% growth in the year-ago quarter, producing a solid 7% two-year stack. New-store cannibalization created an estimated 1.5-percentage-point headwind to comps. According to management, the comparable-sales increase was driven mainly by a higher basket size, while transactions were relatively flat. Our model anticipated a 2.7% year-over-year rise in comparable store sales for the fiscal second quarter. The gross margin was 46.2%, rising 250 basis points from the prior-year rate, including the $55-million tariff-refund benefit. Without that benefit, the gross margin was 44.3%, an underlying improvement of 60 basis points. The merchandise margin gained 70 basis points on better markup, the timing of markdowns and a lower shortage rate, while freight costs created a 10-basis-point offset.Adjusted SG&A expenses were $791.2 million, up 8.1% from $732.3 million in the second quarter of fiscal 2025. After excluding $4 million and $11 million during the fiscal second quarters of 2026 and 2025, respectively, of expenses associated with bankruptcy-acquired leases, adjusted SG&A represented 26.2% of net sales versus 26.7% a year earlier. Lower store-related costs, including occupancy expenses and leverage on the 11% sales increase, drove the 50-basis-point improvement.Product sourcing costs rose to $225.9 million from $209 million. As a share of sales, expenses improved by 20 basis points as distribution-center productivity and cost savings outweighed start-up pressure from the new Savannah facility. The measure covers buying activities and the cost of moving merchandise through Burlington Stores' supply chain.On a basis that excludes the tariff refund and bankruptcy-acquired lease expenses, adjusted EBIT climbed to $210 million from $162 million. The related margin increased 100 basis points to 7%, comfortably ahead of management's 30-60-basis-point expansion target. Merchandise margin strength, supply-chain productivity and SG&A leverage accounted for the outperformance.Adjusted EBITDA on the same underlying basis advanced to $324 million from $257 million. Its margin widened by 130 basis points, demonstrating strong operating flow-through despite the modest 2% comparable-sales increase. Burlington Stores ended the second quarter of fiscal 2026 with total liquidity of $1.65 billion, consisting of $704 million in unrestricted cash and $942 million of availability under its asset-based lending facility.Total outstanding debt at the quarter-end was $1.91 billion, including $1.71 billion under the term-loan facility and $186 million in convertible notes. The company had no borrowings under its asset-based lending facility.The company repurchased 270,279 shares of its common stock for $87 million in the fiscal second quarter. Fiscal year-to-date share repurchases totaled $167 million. At the end of the fiscal second quarter, $218 million remained available under the current share-repurchase authorization, which expires in May 2027. In the second quarter of fiscal 2026, Burlington Stores opened 51 stores, including six relocations, resulting in a net increase of 45 stores during the period. The company ended the quarter with 1,287 stores across 47 states, Washington, DC, and Puerto Rico. Over the trailing 12 months, Burlington Stores added 149 net new stores, increasing its store count 13%. For third-quarter fiscal 2026, management projects total sales growth of 9-11% and comparable sales growth of 1-3%. The adjusted EBIT margin is expected to contract 60-80 basis points. That outlook excludes $2 million of anticipated bankruptcy-acquired lease expenses compared with $11 million in the year-ago quarter.The projected margin decline reflects the planned reinvestment of about 40% of the tariff refunds during the quarter to provide sharper customer value. Excluding this reinvestment, management estimates that the third-quarter operating margin would increase modestly year over year.Burlington Stores expects continued leverage in product sourcing costs as it realizes benefits from supply-chain productivity and cost-saving initiatives. Management expects additional SG&A leverage, although these benefits are expected to be partially offset by higher fuel-related freight expenses.The company anticipates an adjusted effective tax rate of 26% and adjusted earnings per share of $1.60-$1.70, whereas it reported $1.80 in the third quarter of fiscal 2025. Management noted that quarter-to-date comparable sales were within 1-3% guidance, with comparisons expected to ease in September and October. Burlington Stores lifted its fiscal 2026 total-sales forecast to growth of 10-11% from 9-11%. The company raised its comparable-sales assumption to 3-4% from 2-4%, following a 2% increase in fiscal 2025. The company expects to open approximately 115 net new stores during the year, with 135 gross store openings planned. Management remains confident in its ability to open at least 110 net new stores annually and reach or exceed 1,500 stores by the end of fiscal 2028.The updated plan calls for adjusted EBIT margin expansion of 20-40 basis points, improving on the earlier 10-30-basis-point range. It excludes $16 million of anticipated bankruptcy-acquired lease expenses in fiscal 2026 compared with $35 million in fiscal 2025. Full-year adjusted EPS is forecast at $11.77-$11.97, up from the prior stated $11.45-$11.80, whereas it reported $10.17 in fiscal 2025. The revised range implies 16-18% year-over-year growth. Capital expenditure, net of landlord allowances, is projected at $875 million.Management noted that the $55-million tariff-refund benefit recognized in the second quarter is expected to be fully reinvested in sharper customer value during the second half, making the direct full-year earnings impact neutral. About 40% of the reinvestment is planned for the third quarter and 60% for the fourth quarter. Excluding the reinvestment, the underlying fall outlook remains unchanged, with the adjusted EBIT margin expansion of 10-30 basis points and adjusted EPS of $7.30-$7.50. For the fourth quarter, total sales are projected to increase 7-9%, with comparable-store sales up 1-3%. Adjusted earnings are expected at $5.05-$5.15 per share, whereas it registered $4.99 last year. The operating margin is forecast to decline 40-60 basis points. Excluding refund reinvestment, management expects the fourth-quarter operating margin to increase year over year. BURL Stock Past 3-Month Performances Image Source: Zacks Investment Research Over the past three months, this Zacks Rank #3 (Hold) company has lost 10.4% against the industry’s 0.5% growth. We have highlighted three better-ranked stocks, namely Target Corporation TGT, Macy's, Inc. M and Ross Stores Inc. ROST.Target offers guests fashionable, differentiated merchandise and everyday essentials at discounted prices. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Target’s current fiscal-year earnings and sales suggests growth of 37.7% and 4.6%, respectively, from the year-ago actuals. TGT delivered a trailing four-quarter average earnings surprise of 10.5%.Macy's sells a wide range of merchandise, including men’s, women’s and children’s apparel and accessories, cosmetics, home furnishings and other consumer goods. The company carries a Zacks Rank #2 (Buy) at present. The Zacks Consensus Estimate for Macy's current fiscal-year earnings and sales suggests a decline of 4.3% and growth of 0.1%, respectively, from the year-ago actuals. Macy's delivered a trailing four-quarter average earnings surprise of 211%.Ross Stores operates as an off-price retailer of apparel and home accessories. The company also currently has a Zacks Rank #2. The Zacks Consensus Estimate for Ross Stores’ current fiscal-year earnings and sales indicates growth of 32.8% and 11.7%, respectively, from the year-ago actuals. ROST delivered a trailing four-quarter average earnings surprise of 11.2%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Burlington Stores, Inc. (BURL) : Free Stock Analysis Report Macy's, Inc. (M) : Free Stock Analysis Report Target Corporation (TGT) : Free Stock Analysis Report Ross Stores, Inc. (ROST) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

lululemon athletica Inc. LULU is likely to witness top- and bottom-line declines when it reports second-quarter fiscal 2026 results on Sept. 3, after market close. The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $2.5 billion, indicating 2.3% growth from the year-ago quarter's reported figure.The consensus estimate for the company's fiscal second-quarter earnings is pegged at $1.79 per share, suggesting a 42.3% decline from the year-ago quarter’s actual. Earnings estimates have been unchanged in the past 30 days.The Vancouver-based company has been reporting steady earnings outcomes, as evident from its bottom-line surprise trends in the past several quarters. lululemon has a trailing four-quarter earnings surprise of 8.1%, on average. Given its positive record, the question is, can LULU maintain the momentum? lululemon athletica inc. price-eps-surprise | lululemon athletica inc. Quote Our proven model does not conclusively predict an earnings beat for LULU this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.lululemon has an Earnings ESP of 0.00% and a Zacks Rank #3. lululemon continues to benefit from the progress in its Power of Three X2 growth strategy. The plan focuses on three key growth drivers — product innovation, guest experience and market expansion. LULU is expected to deliver solid revenue growth in the fiscal second quarter through product innovation, enhanced guest experience and aggressive international expansion under the plan.International markets, led by Mainland China, have been posting outsized growth, while the men’s category has been gaining share. Digital investments have been strengthening the omnichannel ecosystem and disciplined store expansion has been supporting brand visibility. On the last reported quarter’s earnings call, the company noted that trends in Mainland China have been strong in the second quarter of fiscal 2026.For second-quarter fiscal 2026, management guided China Mainland to see mid- to high-teens growth and Rest of World to record high-single to low-double-digit growth. This keeps international expansion as the primary offset to a weaker Americas demand backdrop. Our model anticipates revenues in China Mainland to increase 19.5% and Rest of World to grow 14.6% in second-quarter fiscal 2026.However, LULU faces near-term pressure from soft North America demand and significant margin contraction. Higher markdowns, tariff-related costs and elevated SG&A expenses weighed on profitability, while cautious guidance signals slower growth and continued operating margin pressure.North America, lululemon’s largest and most mature market, has been witnessing softness due to uneven traffic trends and increasingly cautious consumer spending, particularly in discretionary categories. The impact has been most visible in the women’s category, a core driver of the brand’s North American business. Slower momentum in North America limits consolidated growth and raises concerns about market saturation. Increased promotional activity across the broader apparel space has also intensified competition, making it harder to drive full-price sales. Until demand stabilizes and traffic improves, North America is likely to remain a drag on near-term revenue growth. On the last reported quarter’s earnings call, management cited a recent moderation in sales trends tied to spikes of negative brand commentary and product launches that have not met expectations, and noted it is moving with urgency to adjust product and increase marketing and community activations. Management’s near-term outlook points to a tougher demand and margin setup in the fiscal second quarter. Management reduced its outlook after sales trends moderated exiting first-quarter fiscal 2026. For second-quarter fiscal 2026, it expects revenues of $2.45-$2.475 billion, suggesting a 2-3% fall, and EPS of $1.76-$1.81, whereas it registered EPS of $3.10 in the year-ago quarter.lululemon’s margins are expected to remain under pressure in the to-be-reported quarter due to higher product costs, increased markdowns, unfavorable channel mix and tariff pressures. For second-quarter fiscal 2026, management expects the gross margin to move down 410 bps, led by higher tariff costs and ongoing investments in store openings, optimizations and the distribution network. Tariffs are expected to be a 150-bps headwind, with offsets of 100 bps. Meanwhile, markdowns are likely to rise 50 bps due to additional seasonal clearance. For second-quarter fiscal 2026, management expects SG&A deleverage of 500 bps, driven by lower sales versus prior expectations, proxy costs, increased marketing and the reintroduction of expenses reduced last year, including store labor hours. LULU expects the second-quarter fiscal 2026 operating margin to contract 910 bps year over year to 11.6%. lululemon’s shares have exhibited a downtrend in the past three months, losing 11.4% against the industry’s growth of 2.2%. The company has also underperformed the Zacks Consumer Discretionary sector and the S&P 500’s growth of 2% and 0.5%, respectively. Image Source: Zacks Investment Research From the valuation standpoint, the company trades at a forward 12-month P/E multiple of 10.33X, below the industry average of 15.05X. Image Source: Zacks Investment Research Here are some companies, which, according to our model, have the right combination of elements to post an earnings beat this season:Victoria's Secret VSXY has an Earnings ESP of +5.20% and currently sports a Zacks Rank of 1. The company is likely to register growth in the top and bottom lines when it reports second-quarter fiscal 2026 results. The consensus mark for VSXY’s quarterly revenues is pegged at $1.6 billion, which indicates an 11.2% rise from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.The consensus mark for VXSY’s quarterly earnings has moved up by a penny in the past 30 days to 77 cents per share. The consensus estimate indicates a significant 133% rise from the year-ago quarter’s actual. VSXY has an average trailing four-quarter earnings surprise of 81.9%.Macy's Inc. M currently has an Earnings ESP of +20.81% and a Zacks Rank of 2. The company is likely to register growth in the top line when it reports second-quarter fiscal 2026 results. The consensus mark for M’s quarterly revenues is pegged at $4.8 billion, which indicates a 0.2% rise from the figure reported in the prior-year quarter. The consensus mark for Macy's quarterly earnings has moved up 5.7% in the past 30 days to 37 cents per share. However, the consensus estimate indicates a decline of 9.8% from the year-ago quarter’s actual. M has an average trailing four-quarter earnings surprise of 211%.NIKE Inc. NKE currently has an Earnings ESP of +0.55% and a Zacks Rank of 3. NIKE is likely to register top- and bottom-line declines when it reports first-quarter fiscal 2027 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $11.5 billion, which indicates a 2.2% decline from the prior-year quarter’s actual.The consensus estimate for earnings has moved up by a penny in the past 30 days to 44 cents per share, which implies a 10.2% decline from the year-ago quarter's actual. NKE has an average trailing four-quarter earnings surprise of 56.8%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report lululemon athletica inc. (LULU) : Free Stock Analysis Report NIKE, Inc. (NKE) : Free Stock Analysis Report Macy's, Inc. (M) : Free Stock Analysis Report Victoria's Secret & Co. (VSXY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Kohl's (KSS) came out with quarterly earnings of $1.28 per share, beating the Zacks Consensus Estimate of $0.55 per share. This compares to earnings of $0.56 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +132.73%. A quarter ago, it was expected that this department store operator would post a loss of $0.18 per share when it actually produced a loss of $0.13, delivering a surprise of +27.78%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Kohl's, which belongs to the Zacks Retail - Regional Department Stores industry, posted revenues of $3.52 billion for the quarter ended July 2026, missing the Zacks Consensus Estimate by 0.02%. This compares to year-ago revenues of $3.55 billion. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Kohl's shares have lost about 13.4% since the beginning of the year versus the S&P 500's gain of 12.2%. While Kohl's has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Kohl's was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.05 on $3.54 billion in revenues for the coming quarter and $1.38 on $15.38 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Retail - Regional Department Stores is currently in the top 14% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Macy's (M), is yet to report results for the quarter ended July 2026. The results are expected to be released on September 10. This department store operator is expected to post quarterly earnings of $0.37 per share in its upcoming report, which represents a year-over-year change of -9.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Macy's' revenues are expected to be $4.82 billion, up 0.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Kohl's Corporation (KSS) : Free Stock Analysis Report Macy's, Inc. (M) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Williams-Sonoma, Inc. WSM is scheduled to release its second-quarter fiscal 2026 results on Aug. 26, before the opening bell.In the last reported quarter, the company’s earnings and net revenues topped the Zacks Consensus Estimate by 7.2% and 0.1%, respectively. Year over year, the metrics grew 4.3% and 4.4%, respectively.Williams-Sonoma reported better-than-expected earnings in each of the last four quarters, the average surprise being 7.2%. For the fiscal second quarter, the Zacks Consensus Estimate for earnings per share (EPS) has moved upward to $2.05 from $2.04 over the past 30 days. The estimated figure indicates an improvement of 2.5% from $2.00 per share reported in the year-ago quarter.The consensus mark for net revenues is pegged at $1.91 billion, indicating year-over-year growth of 4.1% from $1.84 billion. Williams-Sonoma, Inc. price-eps-surprise | Williams-Sonoma, Inc. Quote RevenuesWilliams-Sonoma’s top-line performance is expected to have improved year over year because of its diversified brand portfolio, strategic collaborations, focus on global expansion and digital upgrades. Moreover, incremental sales trends in furniture and non-furniture business lines, robust performance across its retail and e-commerce channels and integration of AI across digital platforms are expected to have supported growth in the upcoming period.During the fiscal second quarter, WSM’s Pottery Barn (39.2% of the first quarter of fiscal 2026 net revenues) and West Elm (26.1% of the first quarter of fiscal 2026 net revenues) brands are likely to have gained on the back of refurbished holiday décor items and notable collaborations, alongside expansion in seasonal products and accessories. The home-furnishing company’s namesake brand, Williams-Sonoma (15% of the first quarter of fiscal 2026 net revenues), is expected to have witnessed demand growth across kitchen and related products, with the Pottery Barn Kids and Teen (13.3% of the first quarter of fiscal 2026 net revenues) brand likely to have gained on back-to-school sales.Although the challenging environment because of continued weakness in the U.S. housing market is concerning, WSM’s in-house capabilities have more than offset these headwinds. Segment-wise, our Zacks model predicts fiscal second-quarter revenues in the Pottery Barn and West Elm brands to be $741.2 million and $493.7 million, up 2.3% and 5.4%, respectively, from the prior-year quarter level. Revenues for the namesake brand and the Pottery Barn Kids and Teen brand are also expected to be up year over year by 5.8% to $263.4 million and 4.9% to $300.8 million, respectively.MarginsIn the quarter to be reported, Williams-Sonoma’s bottom line and margins are likely to have improved year over year because of supply-chain efficiencies and cost savings. Also, WSM’s efforts in clearing its inventory and minimizing marketing and promotional costs are expected to have aided the metric. However, tariff-related costs and ongoing geopolitical uncertainties are expected to have somewhat restricted the profitability prospects in the fiscal second quarter.Our model expects selling, general and administrative expenses (as a percentage of net revenues) to contract 40 basis points year over year to 28.8% during the quarter to be reported.CompsFavorable impact from diversified product lines, new product introductions and collaborations is expected to have boosted comps growth across all Williams-Sonoma’s key brands.We expect Pottery Barn’s comps to grow 2.3% year over year. The same inched up 1.1% a year ago and 1% in the previously reported quarter. Our model predicts West Elm’s comps to increase 5.8% year over year in the fiscal second quarter. The metric witnessed a 3.3% increase a year ago, with an 8.5% surge in the last reported quarter.We expect the namesake brand’s comps to be up 6.1% year over year. The metric witnessed 5.1% growth a year ago and a rise of 5% in the previously reported quarter. Our model expects Pottery Barn Kids and Teen’s comps growth to be 4.9%. The metric witnessed a 5.3% increase a year ago and a rise of 4.5% in the previously reported quarter. Our proven model conclusively predicts an earnings beat for Williams-Sonoma this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.WSM’s Earnings ESP: The company has an Earnings ESP of +3.05%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.WSM’s Zacks Rank: The stock currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here. According to our model, the following peer companies also possess the right combination of elements to post an earnings beat in the upcoming quarter.Macy's, Inc. M has an Earnings ESP of +20.8% and a Zacks Rank of 2 at present.Macy's reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 211%. The company’s earnings for the second quarter of fiscal 2026 are expected to be down year over year by 9.8%.Wayfair Inc. W currently has an Earnings ESP of +2.40% and a Zacks Rank of 3.Wayfair’s earnings for the third quarter of 2026 are expected to increase 15.7% year over year. The company reported better-than-expected earnings in three of the last four quarters and met on the remaining occasion, the average surprise being 21.5%.RH RH currently has an Earnings ESP of +127.49% and a Zacks Rank of 3.RH reported better-than-expected earnings in one of the trailing four quarters and missed on the remaining three occasions, the average negative surprise being 12.8%. The company’s earnings for the second quarter of fiscal 2026 are expected to decline year over year by 85.7%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Williams-Sonoma, Inc. (WSM) : Free Stock Analysis Report Macy's, Inc. (M) : Free Stock Analysis Report RH (RH) : Free Stock Analysis Report Wayfair Inc. (W) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

In an environment where most stocks are uncomfortably expensive, finding a cheap one raises questions. Should you act on your luck before the rest of the crowd finds it, or is that stock cheap for good reason? Enter department store chain Macy's (NYSE: M). Priced at less than 10 times its trailing earnings of $2.42 per share and just over 10 times next year's expected bottom line of $2.33, this retailer's stock is oddly inexpensive. What gives? Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Despite glimmers of hope, investors are pricing in expectations of continued deterioration in its business. The so-called "retail apocalypse" isn't complicated -- the advent of e-commerce has been steadily chipping away at brick-and-mortar retailers' revenue since the early 2000s. It's been particularly tough on department stores, and Macy's has been no exception. That's why the stock's down 66% from its 2015 peak, back to where it traded in the late 1990s. But the bears have overshot their target? That's not an entirely unreasonable argument. Investors familiar with Macy's probably know it's one of the few retailers that outright owns much of the real estate where its remaining 665 stores operate. Although estimates of the value of its real estate portfolio vary widely from $5 billion to $15 billion, the low end of that range is near the company's market cap of $6 billion. In the meantime, its retail operation as it stands -- which turned $22.6 billion in sales into pretax income of $849 million last year -- is obviously worth at least a little something. Even subtracting the company's current liabilities from its current assets (about $7 billion each), Macy's market cap still doesn't reflect its presumed value. Except, maybe it shouldn't. Maybe simply being in the brick-and-mortar retail business right now is a liability in and of itself that's weighing on the company's actual value. On paper, Macy's real estate portfolio may be worth several billion dollars. In reality, that theoretical value means nothing if selling it also means Macy's must sacrifice the revenue that particular store site generates. Besides, simply shutting down any retail store can be surprisingly expensive. Meanwhile, although not the case for all of its locations, the only prospective buyers for many of its sites would be other retailers still dealing with the aforementioned retail apocalypse. To this end, retail research outfit Coresight says store closings in the United States are on pace to reach 7,900 this year, versus only 5,500 openings. Connect the dots. Genuine interest in much of Macy's real estate is apt to be limited. In the meantime, the company must continue nursing its own still-lethargic retail business, which has been shrinking since 2015. Never say never. It's possible the brick-and-mortar retail business will eventually reach its absolute floor. Ditto for Macy's. We're even seeing modest evidence that it's happening right now. The market's still not quite ready to count on such recovery, though, and understandably so. Investors are still mostly pricing in the notion that the department store retail business will continue to struggle, and Macy's with it. It's probably not a bad call either. Before you buy stock in Macy's, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Macy's wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $432,621!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,314!* Now, it’s worth noting Stock Advisor’s total average return is 973% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 21, 2026. James Brumley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Macy's Stock Trades at Just 10 Times Earnings. There's Only 1 Explanation for Why Macy's Is This Cheap. was originally published by The Motley Fool

Dillard's Inc. DDS delivered a mixed second-quarter fiscal 2026 performance, with earnings comfortably surpassing the Zacks Consensus Estimate despite a modest revenue miss. Improving retail sales, positive comparable-store sales and gross-margin expansion supported the bottom line, while a sizable tariff refund provided an additional boost. The department-store operator also exited the quarter with more than $1.2 billion in cash and short-term investments after reducing debt.Dillard's shares have gained 11.6% over the past three months compared with the Retail - Regional Department Stores industry's 12.1% rise. Image Source: Zacks Investment Research Dillard's reported second-quarter fiscal 2026 earnings of $6.25 per share, which increased 34.1% from $4.66 in the year-ago quarter and surpassed the Zacks Consensus Estimate of $4.04 by 54.7%. Net income increased to $97.7 million from $72.8 million a year earlier.Net sales of $1.508 billion declined slightly from $1.514 billion in the prior-year quarter and missed the Zacks Consensus Estimate by roughly 0.7%. However, the company's core retail business remained resilient. Total retail sales, which exclude the CDI Contractors construction business, increased 1% to $1.455 billion, while comparable-store sales also advanced 1%.Performance across merchandise categories was mixed. Ladies' accessories and lingerie registered significant sales growth, while home and furniture posted moderate increases. Shoes, men's apparel and accessories, and cosmetics recorded slight gains. Conversely, juniors' and children's apparel and ladies' apparel witnessed moderate declines.Profitability was one of the major highlights of the quarter. Retail gross margin expanded to 40.9% of sales from 38.1% in the prior-year quarter. However, the improvement received a substantial 260-basis-point benefit from $37.2 million in refunds associated with International Emergency Economic Powers Act tariffs. Dillard's does not expect additional significant IEEPA tariff refunds.Dillard's financial position remains one of the strongest elements of its investment case. The company ended the fiscal second quarter with $763.1 million in cash and cash equivalents and $497.7 million in short-term investments, bringing combined liquidity from these two categories to roughly $1.26 billion. Dillard's continues to demonstrate resilience despite an uncertain consumer environment. A 1% increase in both total retail sales and comparable-store sales indicates that demand remains stable, even as performance varies across merchandise categories. Management described the consumer as "somewhat resilient," with sales growth and higher gross margin supporting cash generation during the quarter.The company's merchandise strategy also remains positive. Significant sales growth in ladies' accessories and lingerie, along with gains in home and furniture, shoes, men's apparel and accessories, and cosmetics, demonstrates that Dillard's continues to find pockets of demand across its assortment.Another important strength is Dillard's track record of earnings outperformance. Following the second-quarter beat, the company has surpassed consensus earnings estimates in each of the past several quarters. The latest quarter delivered a 54.7% positive earnings surprise, following a 58.3% beat in the fiscal first quarter.Dillard's cash-heavy balance sheet adds another layer of protection. More than $1.2 billion in cash and short-term investments, combined with ongoing debt reduction, gives management considerable flexibility to navigate an uneven retail environment while continuing to invest in the business. Despite the encouraging second-quarter performance, several risks warrant attention.First, the quality of the gross-margin improvement requires some caution. The $37.2 million tariff refund boosted retail gross margin by 260 basis points and added $1.82 per share to fiscal second-quarter earnings. Since management does not expect additional significant IEEPA refunds, Dillard's will need underlying merchandising and pricing performance to carry a greater share of profit growth in upcoming quarters.Second, operating costs are rising. SG&A expenses increased 2.2% year over year, while operating expenses as a percentage of sales increased 70 basis points to 29.4%. Continued increases in payroll and related costs could pressure operating leverage if sales growth remains modest.Inventory also deserves attention. Merchandise inventories increased roughly 5% year over year compared with just 1% growth in quarterly retail sales. If consumer demand slows, elevated inventory levels could result in heavier promotional activity and create pressure on future gross margins.Finally, broader risks remain, including inflation, shifts in consumer spending, competitive pressure from specialty, off-price and online retailers, higher labor costs, tariffs and potential disruptions to international trade and supply chains. Dillard's exited the fiscal second quarter with several positives working in its favor. Comparable sales remained positive, retail gross margin improved, earnings comfortably topped expectations and the company maintained an exceptionally strong liquidity position while paying down debt.The investment case is not without risks. A meaningful portion of fiscal second-quarter profit improvement came from a tariff refund that is unlikely to recur, while inventory growth and higher payroll expenses warrant monitoring. Uneven category trends and continued uncertainty surrounding consumer spending also limit the visibility of sustained top-line acceleration.Still, Dillard's healthy balance sheet, resilient retail demand, strong earnings-surprise history, reasonable forward valuation and improving earnings outlook provide a favorable risk-reward setup. With DDS currently carrying a Zacks Rank #2 (Buy), the stock appears worth buying for investors seeking exposure to a financially strong retailer while keeping a close watch on underlying gross margins and inventory trends in the quarters ahead. Macy's Inc. M is an omnichannel retail organization operating stores, websites and mobile applications under three nameplates: Macy’s, Bloomingdale’s and Bluemercury. The company currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for Macy's current financial-year sales and earnings indicates a decline of 0.01% and 5.6%, respectively, from the year-ago numbers. Macy's delivered a trailing four-quarter earnings surprise of 211%, on average.Urban Outfitters Inc. URBN is a lifestyle products and services company that sells fashion apparel, accessories, footwear, home goods and related offerings through a portfolio of global consumer brands. The company currently carries a Zacks Rank of 2.The Zacks Consensus Estimate for Urban Outfitters’ current financial-year sales and earnings indicates growth of 8.8% and 12.7%, respectively, from the year-ago reported numbers. URBN delivered a trailing four-quarter earnings surprise of 12.2%, on average.Boot Barn Holdings, Inc. BOOT is the largest lifestyle retailer in the United States, specializing in western and work-related footwear, apparel and accessories. The company currently carries a Zacks Rank of 2.The Zacks Consensus Estimate for Boot Barn’s current financial-year sales and earnings is expected to rise 15.7% and 22.6%, respectively, from the year-ago reported figures. BOOT delivered a trailing four-quarter earnings surprise of 11.4%, on average. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dillard's, Inc. (DDS) : Free Stock Analysis Report Macy's, Inc. (M) : Free Stock Analysis Report Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report Boot Barn Holdings, Inc. (BOOT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research