For Immediate Release
Chicago, IL - December 22, 2011 - Zacks.com announces the list
of stocks featured in the Analyst Blog. Every day the Zacks Equity
Research analysts discuss the latest news and events impacting
stocks and the financial markets. Stocks recently featured in the
blog include
Macy's Inc.
(
M
),
J. C. Penney Company Inc.
(
JCP
),
Saks Incorporated
(
SKS
),
Ross Stores Inc.
(
ROST
) and
Limited Brands Inc.
(
LTD
).
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free Profit from the Pros newsletter:
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Here are highlights from Wednesday's Analyst
Blog:
Macy's Thriving Toward End of 2011
Macy's Inc.
(
M
) continues with its positive rhythm as it successfully approaches
the end of another year, and we believe it will sustain the tempo
as it enters 2012. The company's relentless endeavors to keep
itself on a growth trajectory have paid off.
Riding on Positive Comps
From January to November 2011, Macy's has consistently
registered comparable-store sales growth touching a low of 0.9% (in
March) and reaching a high of 10.8% (in April), thereby recording
an average growth of approximately 5.1%.
This is far better than its competitor
J. C. Penney Company Inc.
(
JCP
), which witnessed an average comps growth of a meager 0.8% in the
same period. Between January and November 2011, J. C. Penney's
comparable-store sales fell as low as 2.6% (in October) and rose as
high as 6.4% (in February and April).
Monthly sales data has also been encouraging for Macy's, which
has seen consistent growth. From January through November 2011, the
company registered a minimum sales growth of 1.6% (in March) and a
maximum growth of 10.9% (in April), compared to J. C. Penney, which
experienced a steep sales decline of 6.6% (in October) and an
increase of 3.4% (in April).
Black Friday Sales Bring Cheers
The Black Friday weekend sales brought cheers for retailers such
as Macy's,
Saks Incorporated
(
SKS
),
Ross Stores Inc.
(
ROST
) and
Limited Brands Inc.
(
LTD
), which went on to post better-than-expected November
comparable-store sales growth of 4.8%, 9.3%, 5% and 7%,
respectively. Early hour store openings, huge discounts,
promotional activities and free shipping on online purchases were
enough to woo customers on Black Friday, which turned out to be a
bonanza for both brick-and-mortar as well as e-commerce
retailers.
The saying "early bird catches the worm" goes well with Macy's.
For the first time, the retailer opened its doors at the stroke of
midnight on Black Friday to attract customers. But J. C. Penney
could not make the most of this opportunity. It followed its old
tradition of opening stores at 4 a.m. on Black Friday. The decision
hurt J. C. Penney's November comparable-store sales, which were
down 2%.
Where Lies the Strength
Macy's sustained focus on price optimization, inventory
management, merchandise planning and private label offering
positions it to drive traffic, meet customer-oriented demand and
improve the shopping experience.
In an attempt to increase sales, profitability and cash flows,
the company has been taking steps such as integration of
operations, consolidation of divisions as well as developing the
e-commerce business and online order fulfillment centers.
Online sales, which include sales from macys.com and
bloomingdales.com, continued to show growth momentum in November,
soaring 49.6%. With the innovation of new technologies, consumers
have also advanced and are now using smartphones and tablets to
search for merchandises and grab the best available deal, instead
of going from shop to shop. Consequently, the company seeks to
expand both Macy's and Bloomingdale's brands online. Year-to-date,
online sales were up 40.9%.
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 focused on local customer
needs and preferences.
Let's Wrap Up
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.
After the Black Friday sales blast, there is skepticism in the
market about whether the success of weekend sales will be
replicated during Christmas and New Year, or whether consumers who
have now become more rational about spending will tighten their
purses. However, the efforts of retailers to convert store traffic
into business cannot be decried as they are trying to lure
customers. Given its track record, Macy's appears to be one of the
forerunners.
Macy's currently operates approximately 850 department stores in
45 states, the District of Columbia, Guam and Puerto Rico.
The above analysis supports our affirmative view on the stock,
and therefore we currently have a long-term Outperform
recommendation on it. Moreover, Macy's holds a Zacks #1 Rank that
translates into a short-term 'Strong Buy' rating, and correlates
with our long-term view.
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PENNEY (JC) INC (
JCP
): Free Stock Analysis Report
LIMITED BRANDS (
LTD
): Free Stock Analysis Report
MACYS INC (
M
): Free Stock Analysis Report
ROSS STORES (
ROST
): Free Stock Analysis Report
SAKS INC (
SKS
): Free Stock Analysis Report
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