Shares of Macy’s, Inc. M rose 2.4% during the trading session on Jan 8 following the department store retailer’s decent holiday sales number that reflected an improvement in trend from the third quarter. Comparable sales on an owned plus licensed basis declined 0.6% during November and December period combined, while on an owned basis, comparable sales fell 0.7%.
Strong digital business and impressive performance at Growth150 stores contributed to results. Moreover, customers responded well to the company’s gifting assortment and marketing strategy. Industry experts pointed that a favorable consumer environment courtesy of a solid labor market and steady wage gains also worked in favor of Macy’s.
Certainly, better-than-expected performance during the festive season, which coincides with the fourth quarter, instills optimism regarding Macy’s quarterly results.
The company has been in a spot of bother for quite some time, thanks to soft mall traffic due to increasing online shopping, stiff competition from discount retailers and threat of tariffs on consumer goods. Experts even pointed that Macy's scrambled to keep pace with the fast-changing fashion trends and scored lower in offering customers with a better bargain option.
With fewer consumers visiting shopping malls and spending more time on e-commerce platforms, some of the brands sold within Macy’s stores started preferring their own standalone stores and making investments to reach consumers directly. All these have been taking a toll on the company. In the third quarter of fiscal 2019, comparable sales on an owned plus licensed basis had fallen 3.5%, while on an owned basis, the metric had decreased 3.9%.
Nonetheless, Macy’s has left no stone unturned to lift performance. From revamping stores to bringing in loyalty program and from embracing new technologies to providing fast delivery options on online purchase or via apps, Macy’s has been looking at every nook and cranny for solutions to stay afloat.
Macy's off-price Backstage locations, Vendor Direct, Store Pickup, Loyalty Program and Growth150 stores are key catalysts. The company also introduced STORY, a concept store and partnered with thredUP, a fashion resale website for consumers to buy and sell secondhand clothing online. The company has added new features to its mobile app — My Wallet, My Store and My Stylist.
Shares of this Zacks Rank #3 (Hold) company have increased 18.3%, compared with the industry’s growth of 3.6%.
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