Backed by the success witnessed last year, Macy’s Inc. (M), one of the leading department store retailers in the U.S., announced that it will open its stores at midnight on Black Friday.
Further, to enliven the shopping spirit, the company will offer block-buster deals, which include lucrative discounts. Besides this, Macy’s will provide its patrons the ease of shopping through smartphones and tablets.
Of late, the retail industry has been experiencing a shift in consumers shopping pattern. Shoppers are spending a sizeable portion of their money to buy essentials and looking for value-adds. Shoppers rank value-for-price as the most important aspect of store purchases. Thus, retailers are coming up with numerous strategic measures as the key holiday season is around the corner.
As for Macy’s, the company has been witnessing healthy sales trends due to the number of initiatives taken by it to bolster its sales, profitability and cash flows, which include, integration of operations, consolidation of divisions, developing e-commerce business and expansion of product offerings.
Last week, Macy’s announced that its key sales metric (comparable-store sales) improved 4.1% year over year for the month of October, attributable to continued strength in its online business. Moreover, total sales for the period increased 3.6% year over year to $1.9 billion.
The company also stated that total sales strengthened 3.8% to $6.1 billion for the third quarter of 2012, while comparable-store sales climbed 3.7%. Online sales during the quarter soared 40.4%.
Following the strong results, the company raised its guidance of comparable-store sales for fiscal 2012. Management now anticipates an augmentation of about 4% in comparable-store sales compared with its earlier guidance of 3.7%.
The company is slated to report its third-quarter 2012 financial results on November 7, 2012. The current Zacks Consensus Estimate for the quarter stands at 28 cents a share, reflecting an estimated year-over-year decrease of about 12%.
Currently, we have a long-term “Neutral” recommendation on the stock. Moreover, Macy’s, which competes with Dillard’s Inc. (DDS) and Saks Incorporated (SKS), holds a Zacks #3 Rank that translates into a short-term “Hold” rating.
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