Macy’s Inc (NYSE: M) stock has been facing pressure since the second half of 2015 and this weakness continued till 2017. The stock lost over 26.5% in 2017 and started 2018 also on a weak note with the stock falling over 3.3% on Jan 4th, 2017. Macy’s operations have been under pressure due to several factors like rising online competition, off-price stores, and specialty stores, mass merchandisers, coupled with falling consumer spending levels. The stock has 2% downside based on seven analysts consensus target price of $24 (Source: tipranks.com)
For the third quarter of 2017, net sales fell $345 million or 6.1% against pcp due to weak comparable sales, hurricane activity impact and warmer than expected fall weather. Decline in international tourism sales have hurt the performance. But the group’s digital business continued to show solid growth with double digit gains in the third quarter of 2017.
Despite a positive holiday season performance, Macys is closing 11 more stores, leading to a total of 81 out of over 100 planned store closures as announced by them in August 2016. The company aims to close over 19 further stores as leases or operating covenants expire or sale transactions are finished. The group narrowed their 2017 guidance forecasting a comparable sales on an owned basis to fall in the range of 2.4 percent and 2.7 percent, with comparable sales on an owned plus licensed basis to decrease in the range of 2.0 percent and 2.3 percent. Overall sales are expected to be fall in the range of 3.6 percent and 3.9 percent in fiscal 2017.
The group reported a comparable sales rise of 1% in November and December 2017 combined months against the same period last year. Comparable sales rose 1.1 percent in the combined November/December period. Fresher inventory, a curated gift assortment coupled with customer experience focus drove the overall performance. The group witnessed a better sales trends in their stores and saw a double-digit growth on their digital platforms. Macy’s Backstage, Bloomingdale’s, Bloomingdale’s The Outlet and Bluemercury, delivered a solid performance. The group intends to continue to focus on digital and mobile experience, stabilize their brick & mortar business.