Macy’s Inc. (M), one of the leading department store retailers in the United States, plans two new stores openings in Chicago and Milwaukee markets. Both stores will trade in a wide range of merchandise, including men’s, women’s and children’s apparel and accessories as well as home textiles, housewares and luggage.
The Cincinnati, Ohio-based Macy’s plans to open one store in Gurnee Mills in Gurnee by spring 2013 and the other store at Southridge Mall in Greendale by spring 2012, and recruit around 200 and 160 personnel, respectively. Both these shopping centers are currently being revamped by Simon Property Group.
Management at Macy’s believes that Chicago and Milwaukee markets provide significant growth opportunities.
Macy’s posted first-quarter 2011 results recently. The quarterly earnings of 30 cents a share outperformed the Zacks Consensus Estimate of 18 cents, and jumped 6 times from 5 cents earned in the prior-year quarter on the heels of healthy sales, improved operating margin and effective cost management.
Macy’s guided fiscal 2011 earnings in the range of $2.40 to $2.45 per share, up from $2.25 to $2.30 forecast earlier.
The company has been taking prudent steps to increase sales, profitability and cash flows. These include integration of operations, consolidation of divisions and customer-centric localization initiatives. To help drive traffic, Macy’s continues to focus on price optimization, inventory management and merchandise planning.
Macy’s said that total sales grew 5.7% to $5,889 million in the quarter from $5,574 million in the prior-year period. Total revenue also came well ahead of the Zacks Consensus Estimate of $5,844 million. Comparable-store sales for the quarter climbed 5.4%.
Management expects comparable-store sales growth of 4.3% in fiscal 2011, up from 3% projected previously.
Currently, we have a long-term ‘Neutral’ rating on the stock. However, Macy’s, which competes with Dillard’s Inc. (DDS), holds a Zacks #1 Rank, which translates into a short-term ‘Strong Buy’ recommendation.
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