Why Isn’t This Better Known?

Analyst Targets

• Macy’s (M): Citigroup, Neutral, $16 | JPMorgan, Neutral, $16 | Telsey Advisory Group, Market Perform, $17
• RH (RH): Telsey Advisory Group, Outperform, $255 | Citigroup, Neutral, $233 | Zelman & Associates, Outperform, $251

What Lands Thursday

Two companies that have almost nothing in common beyond their sector will report within hours of each other on September 10. Macy’s posts Q2 2026 results before the open, with a call at 8:00 a.m. ET. RH releases its fiscal Q2 results after market close. One is a broadline department store executing a multi-year turnaround. The other is a luxury home brand betting on gallery expansion and aspirational pricing. Both reports land in a sector that investors have spent nine months punishing.

The Numbers to Beat

For Macy’s, Wall Street is modeling EPS of $0.37, a year-over-year decline of 9.8%, on revenue of $4.82 billion. That revenue estimate implies essentially flat year-over-year growth. Macy’s own Q2 guidance called for net sales of approximately $4.75 billion to $4.80 billion. The consensus sits near the top of that range, which means the company needs to show momentum, not just hit its own bar.

For RH, analysts expect earnings of $3.18 per share on revenue of $906.6 million. The problem is that RH’s Q2 revenue outlook already trails analyst expectations by about 3.5%, a gap the company flagged itself when it provided full-year guidance. That full-year outlook projects revenue growth of 4.5% to 8%, with adjusted EBITDA margin of 14.2% to 16%. International gallery pre-opening costs are eating into near-term margins; RH guided that those costs would impact adjusted EBITDA margin by roughly 380 basis points in Q2 specifically.

The Sector Read-Through

Before either company speaks, the sector has already delivered a verdict. Lululemon guided Q3 EPS to $0.93-$0.98 against a $2.41 consensus, while projecting Q3 revenue of $2.29 billion to $2.32 billion, a decline of 10% to 11% year-over-year. The stock fell roughly 15% the next day. The Q2 EPS beat was largely cosmetic, with tariff-refund benefits inflating the headline number.

Nike’s situation is structurally worse. Shares closed at $39.09 at a 12-year low, down 38.6% year-to-date in 2026, as the turnaround under CEO Elliott Hill fails to gain traction at the pace investors expected. Greater China has recorded eight consecutive quarters of declining sales.

Together, these results frame Thursday’s question: is what Lululemon and Nike are experiencing idiosyncratic product-cycle failure, or a genuine demand-side break across the American discretionary consumer?

Consumer discretionary is down on the year and among the only losing S&P 500 sectors in 2026. Fuel costs add pressure on top. The national average for regular gasoline remained above $4 per gallon every day in August, poised to set a new record as the most expensive August at the pump, surpassing the previous record set in 2022.

Bull / Base / Bear

Bull: Macy’s beats on comparable sales and raises full-year guidance, demonstrating its “First 50” store strategy is pulling traffic. RH delivers above-consensus revenue and management signals housing-driven demand improvement in the second half. Both stocks rally as investors adjust valuations on the surviving discretionary franchises.

Base: Macy’s meets revenue consensus but EPS lands near the low end on margin pressure. RH misses slightly on revenue while holding its full-year range, crediting second-half store openings. Stocks move modestly in each direction, with sector sentiment unchanged.

Bear: RH’s full-year guidance of 4.5% to 8% revenue growth gets trimmed, and management cannot credibly defend the second-half acceleration thesis. Macy’s comparable sales disappoint, particularly in home categories where the consensus already models Home/Other revenue of $682.9 million, a 7.2% year-over-year decline. XLY extends its losing streak into autumn.

Technical Overlay

RH shares have been under significant pressure in 2026, with a 30-day return down 24.2% and a year-to-date return down 23.5%. The stock approaches Thursday’s report without a technical floor established. Macy’s has moved the other way: the stock has posted a one-year total shareholder return of 88.6%, which means any disappointment Thursday faces an elevated setup with limited short interest to cushion a gap lower.

What to Watch

• Macy’s comparable sales for its “First 50” flagship locations, the clearest metric of whether the turnaround is translating to traffic
• RH’s order backlog commentary and any language on housing market inflection
• Gross margin trajectory at both companies, given persistent input cost pressure
• Whether either management team addresses the Lululemon guide explicitly as a consumer read or dismisses it as brand-specific

Bottom Line

Macy’s and RH are not in the same business, but Thursday they share the same problem: they report into a sector that has already been told the American consumer is pulling back. The broader discretionary picture, reinforced by Lululemon and others, suggests the earnings story for premium retail has shifted from “resilient high-end consumer” to something more complicated. For Macy’s, the question is whether its turnaround is durable enough to absorb that pressure. For RH, the question is simpler and more urgent: can it grow revenue at all before the housing cycle gives it permission to?