), one of the leading department store retailers in the U.S.,
posted strong comparable-store sales (comps) for the four-week
period ended August 25, 2012, surpassing managements'
Comparable-store sales improved 5.1% year over year for the
month of August, while, total sales increased 5.7% to $1.81 billion
compared with $1.71 billion in the comparable prior-year
The increase in comps was attributable to continued strength in
its online business. Moreover, results were boosted by healthy
back-to-school sales along with enhanced sales in Men's apparel,
beauty products, women's shoes, home furnishings and
Year-to-date, Macy's sales increased 3.9% to $14.1 billion
compared with $13.5 billion in the same period last year, while,
same-store sales increased 3.8%.
Online sales, which include sales from macys.com and
bloomingdales.com, surged 37.4% in August. On a year-to-date basis,
online sales shot up 35.2% from the comparable period last year.
The company seeks to expand both Macy's and Bloomingdale's brands
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 increase 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.
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.
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