Shelly Banjo is a Bloomberg Gadfly columnist covering industrial companies and conglomerates. She previously was a reporter at Quartz and the Wall Street Journal.

More Pain At Macy's
Year-over-year change in sales at stores open a year or more
Source: Bloomberg

Macy's wants investors to know it's learned its lesson. 

The retailer on Tuesday reported holiday sales that were lackluster, but not as terrible as investors expected, sending the stock up as much as 7 percent in pre-market trading. Still, Macy's isn't claiming any sort of victory. Sales might be improving, but traffic was down 4 percent in the holiday quarter. Macy's doesn't expect sales to turn positive until the fourth quarter of 2016 (and keep in mind the department store chain is already coming off a weak 2015).

Macy's CEO Terry Lundgren struck a humble note in the earnings release: “After the previous six consecutive years of cumulative success, 2015 reminded us that retailing is a dynamic business that requires continuous reinvention as the customer evolves. Today, we are examining every aspect of our business so we can grow profitable sales." 

In other words, when it comes to retail, shoppers are like single folks on Tinder: They have a finite amount of time and money to spend, and the second they lose interest, they'll walk (or swipe) over to what looks like a better offer. 

Make no mistake, consumers have money to spend. It's just that they are being picky with where they spend it, creating a mixed bag of fourth-quarter earnings results from retailers. For instance, while sales at department stores such as Macy's and Nordstrom have left much to be desired, Home Depot on Tuesday reported an astounding 7.1 percent increase in stores open for more than a year, blowing past analysts' 4.3 percent prediction

For now, investors seem to be taking Lundgren's words at face value. The stock, which fell by 47 percent in 2015, is up 18 percent so far this year (even as the S&P 500 has fallen by 5 percent). And the shares remain fairly cheap, trading at 10.6 times the next 12 months' earnings, compared to a forward multiple of 15.6 at Nordstrom. 

Still On Sale
Macy's price to earnings ratio
Source: Bloomberg

Macy's executives on Tuesday said 2015 was merely "a setback" and outlined a laundry list of initiatives to get customers back in its stores, including focusing on fine jewelry and testing out different promotions and coupons. It's betting it will be able to squeeze more money out of its real estate through joint ventures with mall operators or other real estate firms by year-end. It expects its new, lower-priced "Backstage" stores, as well as 42 new Bluemercury stores, to resonate with customers. And it hopes to keep investing in and growing digital sales, while improving profit margins and inventory turnover.

But that's a lot of moving parts to handle, especially while trying to stabilize a $27 billion company. Macy's needs to spend most of its energy on the basic task of presenting an attractive face that will regain shoppers' attention. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Shelly Banjo in New York at

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