Macy's (M) Expands Small-Format Store Strategy With New Stores
Macy's, Inc. M recently announced the expansion of its small-format store strategy as it constantly aims to cater to customers looking for more convenient locations.
The company plans to add up to an additional 30 small-format stores across the United States through fall 2025, bringing the overall count of such stores to 42. This move will enable Macy's to boost its store portfolio with the combination of best on-and off-mall locations, allowing it to deliver sustainable long-term sales growth.
M’s small-format stores are designed to offer a best-in-class shopping experience in an open environment, which is about one-fifth the size of its full-line stores. Although the company did not disclose the locations, additional stores will start opening next year. These smaller stores will likely be opened at high-traffic shopping locations and will feature a mix of Macy's’ private brands and other popular market brands. The new stores will also complement about 15 small-format stores currently operational under the Macy's and Bloomie's banners.
The company’s small-format stores have been an integral part of its omnichannel ecosystem and growth initiative, which focuses on expanding its footprint in existing markets, entering new markets and replacing unproductive stores. The company strategically locates its small-format stores in off-mall shopping centers to reach out to a greater number of customers and boost frequent visits. Year-to-date, the company’s small-format stores, which have been open for more than a fiscal year, have generated comparable sales growth on an owned-plus-licensed basis.
In addition, Bloomingdale's, with its smaller store concept named Bloomie's, is also on track to open its first West Coast location in Seattle, WA, in November. This will be Bloomie's third location, complementing its other stores based in Fairfax, Virginia and the Chicagoland area.
What’s More?
Macy’s is on track to strengthen its omni-channel capabilities with investments in online shopping experiences, data and analytics, technology infrastructure, as well as better fulfillment capabilities. Incidentally, Macy’s expanded omni-channel offerings, such as curbside, store pickup and same-day delivery, bode well. However, of late, M has been grappling with a tough macroeconomic backdrop, waning consumer confidence and a pullback in spending activity.
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The Zacks Rank #4 (Sell) company’s shares have declined 30.2% in the past three months compared with the industry’s decline of 16.5%.
Three Solid Picks
A few better-ranked stocks from the same space are Dillard's, Inc. DDS, Abercrombie & Fitch Co. ANF and American Eagle Outfitters, Inc. AEO.
Dillard's, a department store retailer, currently sports a Zacks Rank #1 (Strong Buy). DDS has a trailing four-quarter earnings surprise of 77.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Dillard's fiscal 2024 sales indicates growth of 0.3% from the year-ago period’s reported figure.
Abercrombie & Fitch is a specialty retailer of premium, high-quality casual apparel. The company currently flaunts a Zacks Rank #1. ANF delivered a significant earnings surprise in the last reported quarter.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year sales implies growth of 10.4% from the previous year’s reported number. ANF has a trailing four-quarter average earnings surprise of 724.8%.
American Eagle Outfitters is a specialty retailer of casual apparel, accessories and footwear. It sports a Zacks Rank #1 at present.
The Zacks Consensus Estimate for American Eagle Outfitters’ current fiscal-year earnings and sales indicates growth of 33% and 2.2% from the year-ago period’s reported figures. AEO has a trailing four-quarter average earnings surprise of 43.2%.
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Macy's, Inc. (M) : Free Stock Analysis Report
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