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Can the department stores keep up their recent momentum? Macy's, Inc. (M - Analyst Report) has been on a roll since the Great Recession and recently surprised on the Zacks Consensus yet again. After 2 years of double digit earnings growth it's expected to do it again in 2012. This Zacks #1 Rank (Strong Buy) also remains a value with a forward P/E of 11.3.

Macy's operates 840 department stores under the brands Macy's and Bloomingdale's in 45 states, the District of Columbia, Guam and Puerto Rico.

It also is an online retailer using the websites macys.com and bloomingdales.com.

Macy's Beat Again In Fiscal Q1

On May 9, Macy's reported its fiscal first quarter results and surprised on the Zacks Consensus Estimate by 7.5%. This kept alive its impressive earnings surprise streak which has stretched back to 2007.

Only one other time, in 2010, did it fail to actually beat and in that instance it actually met the estimate.

Sales rose 4.3% to $6.1 billion from $5.9 billion in the year ago quarter. Its same store sales jumped 4.4% year over year.

Online sales continue to be hot, rising 33.7% in the quarter. These are included in the same-store sales calculation and added 1.5% to the first quarter results.

Reiterated Guidance for 2012

Same store sales are expected to grow by about 3.5% for the rest of fiscal 2012. Adding in the first quarter results and Macy's is projecting about 3.7% same store sales growth. Its previous guidance called for 3.5%.

Earnings per share are still expected to be in the range of $3.25 to $3.30.

Fiscal 2012 Zacks Consensus Estimate Falls

Analysts were more bullish than the company going into this earnings report. The 2012 Zacks Consensus was looking for $3.40.

But with Macy's reaffirming the $3.25 to $3.30 range, the estimate has come down to $3.35. That's despite 2 estimates being raised in the last week and none being lowered.

That's still earnings growth of 16.4% over fiscal 2011.

Macy's Is Still A Value Stock

Shares had been on a tear over the last year, nearly doubling in price. But the weaker-than-expected full year guidance spooked some investors who sold off the stock.

The recent sell off has only enhanced Macy's value.

In addition to a P/E of 11.3, which is well under the P/E of competitors like Nordstrom (JWN) which trades at 15.7x, Macy's also has a price-to-book ratio of 2.6. A P/B ratio under 3.0 usually indicates value.

Even more impressive is Macy's price-to-sales ratio which is just 0.6. A P/S ratio under 1.0 can mean a company is undervalued.

Macy's also has other solid fundamentals, including a 1-year return on equity (ROE) of 21.2%.

It continues to reward shareholders with a dividend yielding 2.1%.

For investors looking for a value play among the department store names, Macy's is it.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at traceyryniec.

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