Macy’s (M) is heading into the all-important holiday selling period already hampered by disappointing sales, but a promising same-store sales forecast allayed fears of a fourth-quarter flop.

Macy’s stock is having a good year, but that will change if holiday sales don’t meet expectations. True, the nation’s largest department-store chain blew past analysts’ average profit estimate, but sales came up short.

Macy’s stock has been a market-beater almost all year long. And even after a selloff ahead of earnings, Macy’s stock was lagging the S&P 500 by less than a percentage point. Cut to today and Macy’s stock is back to outperforming the broader market.

Macy’s can thank its same-store sales forecast for Wednesday’s gain even after dodgy earnings. Macy’s now expects same-store sales — a critical measure of a retailer’s health — to rise 1.8% to 2.8% after excluding third-party business. Same-store sales rose 1.4% in last year’s fourth quarter.

It’s important for retailers to go into the holiday selling period on a winning streak, if only for the sake of perceptions, and that makes Macy’s top-line miss another worrisome data point for the sector.

Stocks are hitting record highs and employment is growing at more than 200,000 per month, but consumer discretionary spending is still in a funk. Just ask Gap (GPS) or Kohl’s (KSS). The specialty retailer and discount-department store hybrid both issued sales warnings recently. Indeed, department store sales are off 2.5% through the first nine months of the year, according to the Commerce Department.

Macy’s Pops on Holiday Optimism

Retailers carry heavy inventory for the holiday shopping season, and if they have to run discounts to move it, margins get crushed and so does profitability.

Macy’s has now warned on net sales for two consecutive quarters, so it really needs holiday sales to grow smartly for Macy’s stock to maintain its market-beating ways.

For the most recent quarter, Macy’s earnings came to $217 million, or 61 cents per share. Analysts surveyed by Thomson Reuters were looking for earnings of 50 cents. That’s a big beat, but only because Macy’s was able to aggressively cut costs.

Revenue, however, fell more than 1% to $6.2 billion, missing Wall Street forecasts for $6.34 billion. Most worrisome is that same-store sales missed estimates after falling 0.7% even after including departments operated by third parties. Exclude receipts from those stores within the store, and Macy’s same-store sales fell twice as far — by 1.4%.

But the market gave Macy’s the benefit of the doubt after it said fourth-quarter same-store sales would rise faster than last year. That’s as good a reason as any for Macy’s stock to pop after earnings.

Macy’s remains optimistic about the holiday selling season, and that’s all the market needed to hear. After all, when a company misses estimates and trims its forecast, ugly things tend to happen to its shares.

Maybe consumers are conserving cash to splurge on the holidays. The early forecasts talk of strong seasonal growth, but that a risky bet.

Macy’s is one of the better consumer discretionary stocks heading into the holidays, but hat doesn’t make it a surefire winner. It’s easy to issue a rosy forecast. Getting reluctant consumers to open their wallets is another matter entirely.

Without recent sales strength to back up its optimism, Macy’s stock is a hold at best.

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As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.