By Phil Wahba
January 4, 2018

It’s not quite a Miracle on 34th Street, but Macy’s (m) reported much better-than-expected holiday season sales, putting it on track to break a three-year losing streak this quarter.

The department store company, which has reported sales declines in its last 11 quarters despite closing dozens of weak stores, said on Thursday, that comparable sales rose 1% in November and December, a modest increase to be sure, but one that puts Macy’s on track to report its first quarter of growth in three years. Encouragingly, business was up at its namesake and Bloomingdale’s chains and their related discount business, as well as high end Bluemercury beauty shops, during the most important time of year for any department store.

Macy’s CEO Jeff Gennette credited the retailer’s new loyalty program, its online sales and the popularity of exclusive gift items for the improvements. As detailed in a recent feature in Fortune, Macy’s has been ramping up its line-up of gift products, trying to tame the volume of promotions it offers customers, and working on reducing store clutter to win its back into shoppers’ good graces.

Yet despite the numbers, Macy’s stock fell sharply in the morning after rising initially, slipping 7%. Many analysts were unimpressed with the 1% increase considering Macy’s dismal 2016 season which would make comparisons easier to beat, as well as the overall strong holiday season for retailers at large: retail sales in the U.S. rose 4.9% between Nov. 1 and December 24, their best result since, 2011, according to Mastercard SpendingPulse. (Costco Wholesale (cost) an indirect rival to Macy’s reported comparable sales rose 11.5% in December. J.C. Penney reported a 3.4% jump for the November-December period.)

“While Macy’s grew, it did so by far less than the overall sector; as such it is still losing market share both in total and within a number of key categories,” Neil Saunders, Managing Director of GlobalData Retail, wrote in a research note.

Macy’s also announced it will close another 11 stores early this year (part of a previously announced plan to eliminate 100 stores), cut jobs and streamline non-store functions, generating $300 million it will pump back into its business.

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