The U.S. economy is reeling under the ongoing financial crisis,
which has gradually engulfed the global market. Amid this unstable
) has been able to maintain a decent sales run so far in 2012, and
we believe it will carry the same momentum throughout the year. The
company has been relentlessly striving to keep itself on the growth
trajectory, while keeping an upbeat note amidst the lackluster
Riding on Positive Comps
Between January to July 2012, Macy's has consistently registered
comparable-store sales growth. In that period, comps growth touched
a low of 1.2% and hit a high of 7.3%, thereby recording an average
growth of approximately 3.6%.
In the first seven months of 2012, comps increased 2.4% in
January, 4.6% in February, 7.3% in March, 1.2% in April, 4.2% in
May, 1.2% in June and 4.1% in July.
Given the soft economic retrieval, monthly sales data for Macy's
also portrayed a decent performance. The company, in the span of
January to July 2012, registered a minimum sales growth of 0.4% and
a maximum growth of 6.9%, reflecting an average growth of
approximately 3.5% for the period. In the first seven months, sales
growth was 2% in January, 5.5% in February, 6.9% in March, 0.4% in
April, 4.1% in May, 0.8% in June and 5.1% in July.
Macy's departmental 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
In an attempt to increase sales, profitability and cash flow,
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.
However, the company's customers remain sensitive to
macroeconomic factors including interest rate hikes, increase in
fuel and energy costs, credit availability, unemployment levels and
high household debt levels, which may negatively impact their
discretionary spending, and in turn the company's growth and
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.
Currently, we have a long-term Neutral recommendation on the
stock. Moreover, Macy's holds a Zacks #3 Rank that translates into
a short-term Hold rating.
PENNEY (JC) INC (JCP): Free Stock Analysis
MACYS INC (M): Free Stock Analysis Report
SAKS INC (SKS): Free Stock Analysis Report
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