What's going on?

Macy�s announced better-than-expected earnings on Thursday, but the department store chain doesn’t have nearly as much to celebrate as you’d think.

What does this mean?

Shoppers have been cutting back their spending at department stores, it�s true, but Macy�s wasn�t hit quite as badly as expected: its sales at stores that have been open for more than a year �only� fell by 20% compared to the same time last year. And better yet, online sales grew by 27%. But let�s not get ahead of ourselves: that�s half as much growth as the quarter before at a time when everyone’s shopping online. That�s worried investors � especially with retail�s busiest time of the year just around the corner�

Why should I care?

For markets: Think inside the box.

Macy�s is facing tougher competition these days from the likes of Walmart and Target, both of which reported better-than-expected results earlier this week. Those �big-box retailers� aren�t just roomy enough for some socially distant browsing, they have a huge variety of products too. And with those product ranges only getting wider � and trips to out-of-town mall complexes only getting less appealing � it�s easy to see why folks would want a one-stop shop for� well, shopping.

The bigger picture: L hath no fury.�

L Brands � owner of Bath & Body Works and Victoria�s Secret � beat expectations in its earnings update on Thursday too. But unlike Macy�s, its sales were heading in the right direction: they climbed 14% versus the same time last year, on the back of a surge in demand for Bath & Body Works soap and sanitizers. You can’t compete with Eau De 2020, Macy�s�