|Bid||16.03 x 1400|
|Ask||16.05 x 4000|
|Day's Range||15.97 - 16.09|
|52 Week Range||14.11 - 26.33|
|Beta (5Y Monthly)||0.67|
|PE Ratio (TTM)||5.17|
|Earnings Date||Feb 24, 2020|
|Forward Dividend & Yield||1.51 (9.06%)|
|Ex-Dividend Date||Dec 11, 2019|
|1y Target Est||16.19|
Macy’s has struggled to compete vs. Amazon and off-price retailers. Do a strong economic backdrop and cheap valuation make Macy’s stock a buy?
(Bloomberg) -- The credit-rating downgrades of Macy’s Inc. and Renault SA to junk status are rekindling fears among investors of a potential uptick in so-called fallen angels after a run of relative tranquility in the U.S. corporate bond market.The American retailer and French carmaker each lost an investment-grade rating Tuesday, affecting billions of dollars of debt. They follow Kraft Heinz Co., the iconic U.S. packaged-food company, which was downgraded to junk by two credit raters on Friday as its turnaround shows little signs of progress.Even though Macy’s and Renault were downgraded for idiosyncratic reasons and will still trade in investment-grade indexes unless another credit-rating company follows suit, their cuts bring back to the fore what had been a central concern among investors less than two years ago: That a slowing global economy could hamper companies’ ability to service their obligations, especially those that had taken on significant debt loads to finance deals.While many firms took actions to reduce debt levels in 2019, several are still proving to be susceptible to ratings risk. Kraft Heinz alone, with around $21 billion of debt leaving the Bloomberg Barclays investment-grade index at the end of this month, nearly eclipses last year’s fallen angel volume of just under $22 billion, according to Bank of America Corp. strategists. Macy’s has about $8 billion of total debt, while Renault’s roughly $66 billion is predominantly denominated in euros and yen, according to data compiled by Bloomberg.By year-end, the volume of fallen angels is likely to dwarf that of 2019, according UBS Group AG strategists led by Matthew Mish. They predict there could be as much as $90 billion of investment-grade debt downgraded to high yield this year. Guggenheim Partners has said as much as 20% of BBBs in the U.S., or $660 billion, will get cut to junk in the next downgrade wave.Macy’s was cut one notch to BB+ by S&P Global Ratings, which said the department store chain is failing to keep up with changing consumer habits. Of its total debt outstanding, just under $2 billion trades in the Bloomberg Barclays investment-grade index. Renault was downgraded to an equivalent Ba1 rating at Moody’s Investors Service after the company posted its first annual loss in a decade.To contact the reporter on this story: Molly Smith in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Nikolaj Gammeltoft at email@example.com, Boris Korby, Dawn McCartyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
S&P Global Ratings cut Macy's Inc's credit rating to "junk" on Tuesday, citing considerable execution risks in the company's new plan to revive its business, sending its shares down as much as 4.7%. The ratings agency said Macy's improvement trajectory is weaker than its prior expectations and that the company's operating performance would deteriorate over the next several quarters, with declines in comparable same-store sales. BB level, or "junk", rating for companies is seen as having higher risk to lenders.
(Bloomberg) -- Macy’s Inc. was cut to junk by S&P Global Ratings, which said the department-store chain falls on the wrong side of changing consumer preferences.The company’s credit rating was lowered one notch to BB+ from BBB-, S&P said in a statement, citing its “excess stores.” The outlook is stable. Macy’s shares extended losses after the announcement.“Pressure is mounting on Macy’s to adapt to the rapidly changing retail environment,” S&P said. “Its Polaris strategy, which includes meaningful restructuring and renewed focus on loyalty programs, private labels, and e-commerce, will be a challenge to implement successfully amid increasing competition from retailers that are ahead in many of these areas.”The credit-rating company was referring to a new three-year strategy that includes eliminating 2,000 jobs and closing 125 stores -- or almost a quarter of its total locations. Macy’s said those stores account for about $1.4 billion in annual sales. The department store chain also said with its plan, it expects its annual gross cost savings to be $1.5 billion by the end of 2022.While department stores have struggled in the era of online shopping, S&P said that Macy’s has “unique challenges” among its large national department store peers.“A long history of acquisitions and expansion has saddled it with excess stores as shoppers’ shifting preferences move away from mall-based locations and toward more value oriented offerings,” S&P said. “Profitability under the plan is weaker than our prior expectation,” S&P said in a statement Tuesday. “This leads us to view Macy’s competitive position as less favorable.”Macy’s shares fell as much as 4% to $15.95 at 12:43 p.m. in New York. They had declined about 2% this year through Friday’s close.To contact the reporters on this story: Jonathan Roeder in Chicago at firstname.lastname@example.org;Jordyn Holman in New York at email@example.comTo contact the editors responsible for this story: Sally Bakewell at firstname.lastname@example.org, Lisa WolfsonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Shares of Macy's Inc. took an midday dive Tuesday, after S&P Global Ratings downgraded the department store chain's credit to "junk" status, citing a weaker profitability outlook after the company unveiled its three-year strategic plan. The stock was down 3.9%, after being down about 1.4% prior to the downgrade. S&P cut its rating one notch to BB+, which is the highest speculative grade rating, from BBB-. The rating's outlook is stable. S&P said Macy's three-year "Polaris" plan, which includes a significant reduction of the store network, focus on growth in private label brands and off-price stores and cost cutting, has "considerable" execution risks. "While we believe management's strategic plan is a necessary step toward rightsizing the enterprise, it demonstrates to us that the company's competitive advantage has diminished more than we expected, and to a point that we no longer believe is consistent with an investment-grade rating," S&P wrote in a research note. "We now project operating performance will deteriorate over the next several quarters, with declines in comparable same-store sales." Fellow rating agencies Moody's Investors Service rates Macy's at Baa3, the lowest investment-grade rating, and said last week that the strategic plan was "credit positive." Macy's stock has lost 5.1% over the past three months, while the SPDR S&P Retail ETF has eased 0.1% and the S&P 500 has gained 7.8%.
Rating Action: Moody's affirms seven CMBS classes of CGCMT 2017- B1. Global Credit Research- 18 Feb 2020. Approximately $704 million of structured securities affected.
Pier 1 Imports will shutter one Orlando area store as part of nearly 400 U.S. closures after its Chapter 11 bankruptcy filing. The Fort Worth, Texas-based retailer said in a statement on Monday it will put itself up for sale as part of the bankruptcy process and that it already has the approval of its lenders to do so. Before its Feb. 18 filing in the U.S. Bankruptcy Court for the Eastern District of Virginia, the retailer previously said it would close around half of its U.S. stores.
American Eagle Outfitters Inc. stock slid 2% in Tuesday premarket trading after its shares were downgraded to market perform from outperform at Cowen based on merchandise stumbles and mall pressure. Cowen lowered its price target to $14 from $15. American Eagle had execution issues in its tops assortment, which Cowen estimates at about 20% of revenue. It's working through styling and inventory, which analysts say will take time. Moreover, mall traffic could suffer further now that Macy's Inc. has announced more than 100 store closures. Cowen notes that 95% of American Eagle stores are profitable. "While tariff risk has waned, we are concerned around American Eagle's ability to drive sustainable traffic without sacrificing merchandise margin especially in the face of tops' underperformance and general mall traffic headwinds," analysts said. American Eagle stock has fallen 26.2% over the last year while the S&P 500 index has gained 21.8% for the period.
Macy’s credit rating was cut to junk status at S&P Global Ratings, two weeks after it unveiled a $1.5bn cost-cutting plan amid pressure to adapt to declining mall traffic and consumers’ growing appetite for online shopping. S&P on Tuesday lowered its rating for Macy’s to BB+ — one notch below investment grade — from BBB-, saying it viewed Macy’s turnround plan as necessary but also a sign that the department-store chain’s “competitive advantage has diminished more than we expected”. Like its brick-and-mortar peers, Macy’s has grappled with changing consumer habits as more people choose to spend money online rather than shop in traditional stores — a trend that has led to the closure of thousands of retail outlets across the US.
Naveen Krishna, the company's chief technology officer, spoke to Atlanta Business Chronicle following Macy’s Feb. 14 confirmation it will open a $14 million U.S. tech hub in Midtown.
U.S. consumer spending slowed further in January, with sales at clothing stores declining by the most since 2009, a trend that could raise concerns about the economy's ability to continue expanding at a moderate pace. The economy's outlook was also dimmed by other data on Friday showing industrial production decreased for a second straight month in January as unseasonably mild weather depressed demand for utilities, and Boeing suspended production of it troubled 737 MAX plane.
After 75 years of calling the Queen City home, retail giant Macy’s Inc. – America’s department store – is pulling up roots and declaring New York City its sole headquarters. Macy’s is a Fortune 500 company, and with that comes prestige, philanthropy and a large local workforce. Local business leaders say the loss will cost the city dearly.
As e-commerce has eroded its retailing business, owners of the stock have held out hopes for Macy’s real estate. Events moved in their favor last week.
Department store chain Kohl’s Corp. is laying off 250 employees as part of a restructuring plan. The move is part of the retailer’s efforts to have a “more customer-centric focus,” according to a statement from Jen Johnson, the company’s senior vice president of communications. Menomonee Falls-based Kohl’s (NYSE: KSS) expects the restructuring to position the company for long-term success, Johnson said.
The ratings on six P&I classes were affirmed because the transaction's key metrics, including Moody's loan-to-value (LTV) ratio, Moody's stressed debt service coverage ratio (DSCR) and the transaction's Herfindahl Index (Herf), are within acceptable ranges. The rating on one interest only (IO) class, Class X-A, was affirmed based on the credit quality of its referenced classes.
The 435,000-square-foot space that covers the first three floors of the Wanamaker building at 1300 Market St. that is occupied by Macy’s sold for $40 million, according to Philadelphia property records. The Philadelphia Business Journal reported on the transaction in December but the sale price was not yet public. TF Cornerstone Inc., a New York real estate company that owns real estate throughout New York and Washington D.C., bought the retail space.
(Bloomberg Opinion) -- Nordstrom Inc.’s seven-story New York flagship at Broadway and 57th Street is home to a velvet-lined Nike boutique, a facial massage studio, a martini bar in the heart of the shoe floor and lots of expensive new merchandise. That’s how it’s always been at Nordstrom. But last month brought something new with the opening of See You Tomorrow, a luxury apparel resale boutique inside the flagship. Shoppers will find returned and damaged goods sourced from other Nordstrom stores and — because it’s a resale shop — they’re welcome to sell their own high-end apparel for store credit.Nordstrom isn’t the first department store to try resale. In 2019, Macy’s Inc. and J.C.Penney Co. Inc. preceded Nordstrom into the business, lured by younger shoppers concerned with the environmental footprint of their consumption. But long term, resale’s biggest impact on retailing won’t be the growing sections of department stores devoted to used clothes. The most profound shift will be if manufacturers are compelled to make better quality, more durable clothes that consumers perceive as having value in the secondhand economy.Consumers have complained about the declining quality and durability of clothing for decades. But the complaints became louder and more serious as (primarily) Asian manufacturers became adept at quickly meeting consumer demand for low-cost versions of the latest trends. To do so, the manufacturers skimp on quality. For example, they’ll reduce thread counts, making garments more flimsy and less likely to survive multiple wears and washes. Those low-quality garments have no market in resale shops or on resale apps. And the stuff that can’t be resold or recycled is growing faster than the stuff that can. Between 2003 and 2017, the amount of apparel sold globally nearly doubled, while the number of times a garment was worn dropped by more than a third. All that unworn and ultimately unwanted apparel piles up: In 2017, 14.3 million tons of textiles were landfilled or incinerated in the U.S. — a 623% increase over 1970.These facts are increasingly well-known to American consumers, many of whom say they want to buy purpose-driven, sustainable brands. According to ThredUp Inc., a major online fashion resale platform and the primary source for the resale industry’s data, 59% of consumers expect retailers to create clothes ethically and sustainably. It’s impossible to objectively judge how many retailers meet that expectation. More likely than not, it’s a small number and they charge premium prices. So, in the absence of certainty and a willingness to spend, increasing numbers of consumers are opting for a secondhand retail experience. According to ThredUp’s data, the secondhand apparel market — everything from thrift stores to Nordstrom to ThredUp itself — more than doubled between 2012 and 2018, to $24 billion, and should exceed the fast fashion market by 2028. That expansion is being driven across demographics, but especially among those 18-24, 37% of whom said they would buy secondhand in 2019.However, all of this growth is theoretically constrained by two supply bottlenecks. First, consumers need incentives to sell stuff from their own closets. Second, there needs to be enough decent apparel worth selling to keep the market going. The first problem has largely been solved by online platforms like ThredUp and PoshMark Inc., which enable selling (and buying) through intuitive apps.Historically, the second question has been solved by the market. For example, the resale value of a new car is such a crucial consideration for buyers that automakers advertise how well their models retain it — and manufacture accordingly. Today, 40% of consumers say, according to the ThredUp report, that they incorporate resale value into their purchasing decisions beyond just cars, to include items like furniture to apparel. That’s a major shift in consumer behavior.Last year, Ikea announced a rental program that — among other benefits — is giving the cheap flat-pack furniture maker insights into wear and tear. It’s incorporating that information back into its designs, so items can be sold or rented, over and over again. Similarly, clothing rental juggernaut Rent the Runway Inc. shares its data with designers so that they can learn from it. One fashion label executive summarized the findings as: “How many times do our dresses get dry-cleaned and still come back as new?” The answer won’t only affect Rent the Runway. Last month, Nordstrom announced that it would begin selling garments pulled from Rent the Runway circulation at its discount Nordstrom Rack stores. Presumably, they’ll be able to last a few more dry cleans.Of course, shoppers at Nordstrom’s New York flagship can take resale value for granted. But the mere fact that Nordstrom is offering the option to sell back apparel in the same store from which it was purchased marks a profound shift in how consumers, retailers and manufacturers will perceive shopping and ownership. In coming years, that shift should result in better quality stuff for everyone.To contact the author of this story: Adam Minter at email@example.comTo contact the editor responsible for this story: Stacey Shick at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Adam Minter is a Bloomberg Opinion columnist. He is the author of “Junkyard Planet: Travels in the Billion-Dollar Trash Trade” and the forthcoming "Secondhand: Travels in the New Global Garage Sale."For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.