Macy’s, Inc. ([stock]M[/stock]), one of the leading department store retailers in the United States, recently posted sales results for the five-week period ended April 2, 2011.
Macy’s comparable-store sales for March 2011 rose marginally by 0.9%, following an increase of 5.8% registered in February 2011, and compared with a 10.8% jump witnessed in March 2010. Management had earlier anticipated March sales to be down. Year-to-date comparable-store sales climbed 3%.
Management now forecasts comparable-store sales in April to rise between 8% and 9%, reflecting an increase of 4% to 4.5% for the combined March-April period. Earlier, Macy’s had predicted comparable-store sales growth of 3% for the combined March-April period.
Cincinnati, Ohio-based Macy’s said that total sales for March jumped 1.6% to $ 2,207 million from $ 2,172 million in the same month last year. Year-to-date, sales rose 3.4% to $ 3,969 million from $ 3,839 million reported in the prior-year period.
Online sales, which include macys.com and bloomingdales.com, continued their growth momentum in March and soared 34.8% during the month. Macy’s is seeking to expand both the Macy's and Bloomingdale's brands. Year-to-date, online sales were up 33%.
Macy’s department stores sell a wide range of merchandise. Macy’s products include men’s, women’s and children’s apparel and accessories, cosmetics, home furnishings and other consumer goods.
Macy’s, which competes with J. C. Penney Company Inc. ([stock]JCP[/stock]), currently operates approximately 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico.
The company is taking steps to increase sales, profitability and cash flows, which include integration of operations, consolidation of divisions, customer-centric localization initiatives, as well as developing the e-commerce business and online order fulfillment centers. To help drive traffic Macy’s continues to focus on price optimization, inventory management and merchandise planning.
However, intense competition and higher debt-to-capitalization ratio remain concerns. Moreover, Macy’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 profitability.
Currently, we have a long-term Neutral rating on the stock. Moreover, Macy’s holds a Zacks #3 Rank, which translates into a short-term Hold rating.
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