) - one of the leading department store retailers in the U.S. -
posted healthy comparable-store sales as well as sales for the
four-week period ended October 27, 2012. Despite the damage
caused by Hurricane Sandy, the company has raised its comps
guidance for the second half of fiscal 2012 on the back of strong
third-quarter sales along with anticipated positive response from
the upcoming holiday season.
Comparable-store sales improved 4.1% year over year for the
month of October, attributable to continued strength in its
online business. Total sales increased 3.6% to $1.9 billion
compared with $1.8 billion in the prior-year period.
Year-to-date, Macy's sales augmented 3.7% to $18.3 billion
compared with $17.7 billion in the same period last year, whereas
comparable-store sales also witnessed a hike of 3.7%.
Online sales, which include sales from macys.com and
bloomingdales.com, surged 44.6% in October 2012. On a
year-to-date basis, online sales shot up 36.8% from the
comparable period last year. The company remains on track to
expand both Macy's and Bloomingdale's brands online.
Moreover, Macy's revealed total sales and same-store sales for
the third quarter. The company's total sales grew 3.8% to $6.1
billion in the third-quarter 2012 from $5.9 billion in the
prior-year period while comparable-store sales climbed 3.7%.
Online sales during the quarter soared 40.4%.
Buoyed by the robust third-quarter sales, the company raised
its guidance of comparable-store sales for the second half of
fiscal 2012. Management now anticipates an increase of about 4%
in comparable-store sales compared with its earlier guidance of
3.7%. This updated guidance for the second-half for comps
reflects an increase of about 4.2% in the fourth quarter of
Despite secular headwinds, Macy's has been performing well in
the current fiscal. The company has been taking a number of
initiatives in order to bolster its sales, profitability and cash
flows. These steps include integration of operations,
consolidation of divisions as well as developing e-commerce
business and online order fulfillment centers.
We remain optimistic about the company's customer-centric
localization initiative called "My Macy's." The program aims at
improving comparable-store sales and reducing operating expenses,
with stores and merchandise assortments focusing on local
customer needs and preferences.
Macy's, which competes with
J. C. Penney Company Inc
), currently operates approximately 840 department stores in 45
states, the District of Columbia, Guam and Puerto Rico. The
company is expected to release its third quarter financial
results on Wednesday, November 7, 2012.
Currently, we have a long-term Neutral recommendation on the
stock. However, Macy's holds a Zacks #3 Rank that translates into
a short-term Hold rating.
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