On Jul 17, 2013, Zacks Investment Research upgraded Macy’s, Inc. (M - Analyst Report) to a Zacks Rank #1 (Strong Buy). Shares of this leading department store retailer in the United States have amassed a year-to-date return of roughly 29.3%.
Why the Upgrade?
Macy’s has been taking prudent steps to augment sales, profitability and cash flow. These 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 to generate long-term profitability, which is well evident from its record of beating the quarterly earnings expectations.
If we look at the company’s earnings surprise history, Macy’s has outperformed the Zacks Consensus Estimate for 12 straight quarters by an average of 35.6%. In the last concluded quarter, the company beat the Zacks Estimate by 3.8%. The company’s relentless endeavors to keep itself on the growth trajectory have paid off despite the lackluster economy.
Macy’s quarterly earnings of 55 cents a share surpassed the Zacks Consensus Estimate by a couple of cents and surged 28% from 43 cents earned in the prior-year quarter. Total sales grew 4% to $6,387 million, and came ahead of the Zacks Consensus Estimate of $6,380 million. The company’s sound fundamentals across its Macy’s and Bloomingdale’s business are mirrored through its strong first-quarter results.
Buoyed by healthy results, management reiterated its fiscal 2013 earnings between $3.90 and $3.95. The Zacks Consensus Estimate for fiscal 2013 rose 1% to $3.95 per share over the last 90 days. For fiscal 2014, the Zacks Consensus Estimate advanced 1.6% over the same timeframe to $4.49 per share.
Other Stocks to Consider
Apart from Macy’s, there are other stocks with a favorable Zacks Rank and capable of continuing with their upbeat performances. These include Bon-Ton Stores, Inc. (BONT - Snapshot Report), B&G Foods Inc. (BGS - Snapshot Report) and Skechers USA Inc. (SKX - Analyst Report) all carrying a Zacks Rank #1 (Strong Buy).