Macy’s Inc. (M) posted better-than-expected sales results for the four-week period ended August 28, 2010, on the heels of strong back-to-school business, driven by robust performances across Material Girl, Madonna’s new apparel line, and American Rag, the private brand.
The company’s comparable-store sales for August 2010 rose 4.3%, following an increase of 7.3% registered in July 2010, a sharp improvement from a decline of 8.1% witnessed in August 2009.
Cincinnati, Ohio-based company, Macy’s, pointed that year-to-date comparable-store sales grew by 5%.
Macy’s, one of the leading department store retailers in the United States, now expects comparable-store sales to rise in the range of 3% to 3.5% in the second half of 2010, which would result in comparable-store sales increase of 4% to 4.2% for fiscal 2010.
Macy’s said that total sales for August jumped 6.2% to $1,638 million from $1,542 million in the same month last year. Year-to-date, sales were up 7.1% to $12,749 million from $11,905 million in the comparable year-ago period.
Online sales, which include macys.com and bloomingdales.com, continued their growth momentum in August and soared 22.2% for the month under review, and were up 29.8% year-to-date. Macy’s is seeking to expand both the Macy’s and Bloomingdale’s brands.
Macy’s department stores sell a wide range of merchandise. Macy’s products include men’s, women’s, and children’s apparel and accessories, cosmetics, home furnishings and other consumer goods.
Macy’s currently operates nearly 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico.
The company is taking steps to increase sales, profitability and cash flow, which include integration of operations, consolidation of divisions and customer-centric localization initiatives. To help drive traffic, Macy’s continues to focus on price optimization, inventory management and merchandise planning. However, intense competition and higher debt-to-capitalization ratio remain concerns.
We have a Neutral rating on Macy’s. Moreover, the Zacks #3 Rank, which translates into a short-term ‘Hold’ rating, correlates with our long-term recommendation.
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