) recent announcement of trimming its fourth-quarter fiscal 2012
earnings guidance triggered a downward trend in the Zacks
Consensus Estimates. A negative sentiment was palpable among the
analysts covering the stock who tweak their estimates to better
align with the company's projection.
The Cincinnati, Ohio-based company, which saw its December
2012 comparable-store sales rising 4.1%, now expects its fourth
quarter earnings between $1.91 and $1.96 per share, down from
$1.94 to $1.99, forecasted earlier. This department store
retailer also lowered its comparable-store sales guidance to a
range of 3% to 3.5% from 4.2% predicted previously.
Management stated that sales for the first two months of the
fourth quarter remained below expectations as results were
dampened by the impact of Hurricane Sandy and lingering economic
concerns. This compelled management to revisit their earnings
Consequently, the Zacks Consensus Estimates have been
portraying a downtrend. The Zacks Consensus Estimate for the
fourth quarter dropped 2% to $1.95 per share, as 5 out of 7
estimates were revised downwards in the last 7 days. For fiscal
2012, 3 of 13 estimates were lowered over the same timeframe,
leading to a marginal decline of 0.3% in the Zacks Consensus
Estimate to $3.39 per share.
Macy's, which competes with
J. C. Penney Company Inc.
), holds a Zacks #3 Rank that translates into a short-term Hold
rating. We believe that the downward revision in the Zacks
Consensus Estimates may push the Zacks Rank down in the coming
Currently, we maintain our long-term Neutral recommendation on
Macy's with a target price of $43.00, as frugal shoppers and a
soft economic recovery still remain causes of concern. However,
the company has been initiating several strategies to bolster its
sales, profitability and cash flow, which include Omnichannel
strategy, integration of operations, developing e-Commerce
business, and expansion of product offerings.
The company also remains committed to strengthening the online
presence of both its Macy's and Bloomingdale's brands. Online
sales, which include sales from macys.com and bloomingdales.com,
surged 51.7% in December 2012.
Macy's currently operates approximately 840 department stores
in 45 states, the District of Columbia, Guam and Puerto Rico.
DILLARDS INC-A (DDS): Free Stock Analysis
PENNEY (JC) INC (JCP): Free Stock Analysis
MACYS INC (M): Free Stock Analysis Report
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