Macy's Sales Rise - Analyst Blog


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Macy's Inc. 's ( M ) relentless pursuit to keep itself on the growth trajectory have paid off well in an economy, which is gradually making its way out of the woods. The company has been moving on and keeping its upbeat note, as evident from the healthy sales results for the four-week period ended February 25, 2012.

The leading department store retailer in the U.S. saw its comparable-store sales rising 4.6% in February 2012, following an increase of 2.4% registered in January 2012 and 5.8% in February 2011.

Cincinnati, Ohio-based Macy's said that its total sales for February grew 5.5% to $1,860 million from $1,763 million in the same month last year. Apparel, accessories, shoes and cosmetics continues to show robust trends.

Online sales, which include sales from and, continued to show growth momentum in February, soaring 31.3%. The company seeks to expand both Macy's and Bloomingdale's brands online.

Macy's hinted that comparable-store sales for the combined March and April period are expected to rise between 3% and 3.5%. With the pre-Easter period falling in March 2012, instead of April, as in the last year, the sales are expected to remain healthy in the month of March.

Consumer Confidence on High

Consumers seem to have gained confidence this year, and are opening their wallets, which led to a surge in sales at stores in February. Conference Board data suggests that Consumer Confidence Index rose to 70.8 in February 2012 from 61.5 in January, the highest level attained since February 2011, when the index touched 70.4.

The U.S. economy is showing some signs of resurrection, as evident from an improving job market, fall in the count of Americans claiming unemployment benefits and boost in consumer spending, which represents over 70% of the economy.

The unemployment rate dropped to 8.3% in January 2012, the lowest figure attained since February 2009. Moreover, according to Labor Department, the number of people seeking unemployment benefit fell by 2,000 to 351,000.

Let's Conclude

Macy's department stores sell a wide range of merchandise. Its products include men's, women's and children's apparel and accessories, cosmetics, home furnishings and other consumer goods.

Macy's, which competes with J. C. Penney Company Inc. ( JCP ), Dillard's Inc. ( DDS ) and Saks Incorporated ( SKS ), currently operates approximately 840 department stores in 45 states, the District of Columbia, Guam and Puerto Rico.

In an attempt to increase sales, profitability and cash flows, the company has been taking steps 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.

These helped Macy's to post better-than-expected fourth-quarter 2011 results. The quarterly earnings of $1.70 per share outperformed the Zacks Consensus Estimate of $1.65, and rose 6.9% from $1.59 earned in the prior-year quarter buoyed by My Macy's localization initiatives, omnichannel integration and robust online sales.

Macy's said that total sales grew 5.5% to $8,724 million in the quarter, and comfortably surpassed the Zacks Consensus Estimate of $8,696 million.

The company's sound fundamentals across its Macy's and Bloomingdale's businesses, are mirrored through strong fourth quarter results and management believes that it will sustain the rhythm in 2012, as the year presents ample opportunities to enhance market share.

Currently, we have a long-term Outperform rating on the stock. Moreover, Macy's holds a Zacks #2 Rank that translates into a short-term Buy 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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