What's going on?

Thursday saw a troop of Christmas updates from US retailers. The runt of the litter was department store chain Macy’s: its stock dropped 18%, swooping like a Black Friday price tag.

What does this mean?

Weaker-than-anticipated sales growth in the last two months of 2018 led to Macy�s slashing its annual sales and profit target. The company wasn�t alone: shares of rival Kohl�s fell 5%, thanks to disappointing holiday results of its own.


There were a couple of gifts for investors, however. Retailer Target’s sales grew by 6% compared to last year�s holiday period (if it�s good enough for Beyonc�), and the company told investors it�d meet its planned, er, targets. And things really clicked at Bed Bath & Beyond: shares rose 17% after it announced strong improvements in profitability that offset weaker-than-expected sales growth.

Why should I care?

For markets: Retail�s shakedown shook US stocks.

As investors sold Macy�s shares, they also ditched several other retailers � including some which didn�t give an update this week � weighing on the US stock market overall. Last quarter�s likely to have been tough for retailers everywhere, partly thanks to aggressive discounting; even Amazon�s revenue growth forecast for the all-important holiday quarter wasn�t as prime as investors had come to expect. Airlines may also be showing symptoms of cooling consumer spending: American Airlines warned investors on Thursday that its quarterly profit would be lower than predicted, and others may follow suit.

The bigger picture: It�s a similar story across the Atlantic.

This Christmas was the worst in a decade for UK retailers. Sainsbury�s � Britain�s second-biggest grocery chain, and currently looking to bulk up further with Walmart�s large UK arm � reported a decline in quarterly sales on Wednesday. And at British department store Debenhams, holiday sales fell by more than 3% � leaving it scrambling to hash out a turnaround plan with its lenders in a bid to avoid being sheared like Sears.