Cincinnati, Ohio-based Macy’s Inc. (M), one of the leading department store retailers in the U.S., posted lower-than-expected same-store sales for the five-week period ended June 30, 2012.
Comparable store sales inched up 1.2% year over year for the month. Total sales rose marginally to $2.41 billion from $2.39 billion in the comparable prior-year period. Management stated that lower tourist spending and major renovation activities at the Macy’s Herald Square store in New York City negatively impacted sales for the month.
Year-to-date, Macy’s registered a 3.6% increase in comparable store sales with a 3.4% rise in total sales to $10.6 billion.
Online sales, which include sales from macys.com and bloomingdales.com, continued to grow in June, surging 31.8%. On a year-to-date basis, online sales shot up 34.8% from the comparable period last year. The company seeks to expand both Macy's and Bloomingdale's brands online.
Despite near-term pressures, the company stood by its earlier guidance and expects fiscal 2012 earnings in the range of $3.25 to $3.30 per share. Moreover, comparable-store sales are expected to grow by about 3.7%.
Macy’s has been actively managing its cash flows. The company has been repaying debt, making prudent capital expenditures and returning much of its free cash to shareholders via dividend and share repurchases. Macy’s expects to buy back $1 billion shares in fiscal 2012.
Macy’s department stores sell a wide range of merchandise. The company’s products include men’s, women’s and children’s apparel and accessories, cosmetics, home furnishings and other consumer goods.
Currently, we have a long-term ‘Neutral’ recommendation on the stock. Moreover, Macy’s, which competes with J. C. Penney Company Inc. (JCP), carries a Zacks #3 Rank that translates into a short-term Hold rating.Read the Full Research Report on M
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