Macy's Inc.
(
M
), an S&P 500 company and one of the leading department store
retailers in the U.S., is scheduled to report its second-quarter
2012 financial results on Wednesday, August 8, before the market
opens.
The current Zacks Consensus Estimate for the quarter is 64 cents
a share. The estimates in the current Zacks Consensus range between
a low of 62 cents and a high of 66 cents a share. The Zacks
Consensus estimates revenue at $6,104 million for the second
quarter.
Recap of First-Quarter 2012
On May 9, 2012, Macy's delivered first-quarter 2012 results. The
quarterly earnings of 43 cents a share beat the Zacks Consensus
Estimate of 40 cents, and soared 43.3% from 30 cents earned in the
prior-year quarter on the back of My Macy's localization
initiatives, omnichannel integration and robust online sales.
Macy's said that total sales grew 4.3% to $6,143 million in the
quarter from $5,889 million in the prior-year period, and
comfortably surpassed the Zacks Consensus Estimate of $6,123
million. Comparable-store sales for the quarter climbed 4.4%.
Zacks Agreement & Magnitude
The Zacks Consensus Estimate for the second quarter of 2012
remained static in both the last 7 and 30 days, despite revisions
in estimates made by 2 out of 14 analysts covering the stock in the
respective periods. These revisions did not however, materially
impact the Estimate.
The upward revision in the estimates was due to
better-than-expected July comparable-store sales, which rose 4.1%
despite the macroeconomic headwinds and a temporary suspension in
sales due to refurbishment of flagship stores in New York City.
Positive Earnings Surprise History
With respect to earnings surprises, Macy's topped the Zacks
Consensus Estimate over the last four quarters in the range of 3%
to 100%. The average remained at 31.9%, indicating that the company
surpassed the Zacks Consensus Estimate by the same magnitude in the
trailing four quarters.
Closing Comment
Macy's department stores sell a wide range of merchandises. Its
products include men's, women's, and children's apparel and
accessories, cosmetics, home furnishings and other consumer
goods.
In an attempt to increase sales, profitability and cash flows,
the company has been taking various initiatives such as integration
of operations, consolidation of divisions, customer-centric
localization initiatives, as well as developing e-commerce business
and online order fulfillment centers. Moreover, Macy's continues to
focus on price optimization, inventory management and merchandise
planning to drive traffic.
However, the company's expansion in regions where it already
serves could cannibalize its sales performance and bring down
traffic counts at its existing stores in these areas. Consequently,
this may have a negative impact on the company's overall
performance. Moreover, sluggish economic recovery and erratic
consumer behavior also remain the causes for concern.
Currently, we maintain our long-term 'Neutral' recommendation on
the stock. However, Macy's, which competes with
J. C. Penney Company Inc.
(
JCP
)
, Dillard's Inc.
(
DDS
) and
Saks Incorporated
(
SKS
), carries a Zacks #4 Rank that translates into a short-term 'Sell'
rating.
DILLARDS INC-A (DDS): Free Stock Analysis
Report
PENNEY (JC) INC (JCP): Free Stock Analysis
Report
MACYS INC (M): Free Stock Analysis Report
SAKS INC (SKS): Free Stock Analysis Report
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