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Macy's (M) Up More Than 20% YTD, Stock Well Poised for 2019

Macy’s, Inc. M) has been taking up several initiatives to adapt to the changing dynamics of its industry. Notably, this Cincinnati, OH-based company looks well poised to enter 2019 on a solid note on steady economic growth, buoyant consumer confidence and rising disposable income.

Investments in long-term endeavors may exert pressure on margins in the near term. Nonetheless, looking beyond the short-term impediments, these steps are vital for attaining long-term goals. Clearly, this Zacks Rank #2 (Buy) company has managed a decent run on the bourses year to date. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We note shares of this department store retailer have risen roughly 21.5% so far this year. The stock has not only fared better than the Zacks Retail-Regional Department Stores industry that climbed 10.7% but also the Zacks Retail-Wholesale sector that rose a meagre 1%. Meanwhile, shares of other stocks in the industry like Kohl's KSS, Dillard's, Inc. DDS and J. C. Penney JCP have gained 13% and 2.4%, and lost 62%, respectively.


A Sneak Peek

Macy's sustained focus on price optimization, inventory management, merchandise planning and private label offering are the primary catalysts aiding the company in catering to customer-oriented demand and improving in-store shopping experience. In an attempt to increase sales, profitability and cash flows, the company has been taking steps such as integration of operations as well as developing omni-channel capabilities and online order fulfillment centers.

Moreover, the company has undertaken initiatives — Macy’s Backstage off-price business, the launch of Bronze Program, Growth50 stores, Vendor Direct and expansion of Bluemercury — to keep itself on the growth trajectory. Management intends to expand Growth 50 stores strategy to another 100 stores in fiscal 2019.

The company also introduced various innovative services including Apple Pay, Same Day Delivery, Enhanced Shopping Apps, Innovation in Stores Selling Technology, Macy’s Image Search and Macy’s Wallet/Bloomingdale’s Wallet. The company’s “Buy Online Pickup in Store” initiative is also gaining traction. Macy’s added a new feature to its mobile app called Mobile Checkout, which enables customers to scan bar codes of items and pay via smartphones.

Macy’s acquired STORY, a concept store, to enhance in-store customer experience. Further, it has taken a minority stake in b8ta, a technology retailer that enables customers to try, buy and learn about new tech products. The company’s investment is seen as part of enhancing customer shopping experience at its The Market @ Macy's, a store-within-a-store retail concept.

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J. C. Penney Company, Inc. (JCP) : Free Stock Analysis Report
 
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