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Macy's (M) Up 79% in 6 Months, Focuses on Polaris Strategy
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Efficient operating strategies and investments to enhance digital capabilities have helped Macy's, Inc. (M - Free Report) stay afloat, despite challenges in the retail landscape. This well-known retailer of a wide range of consumer goods is gaining from efforts undertaken as part of the Polaris Strategy, which includes rationalizing store base, revamping assortments as well as managing costs prudently. Moreover, efforts undertaken to boost onmni-channel strength have been yielding. Shares of this Zacks Rank #3 (Hold) stock have gained 78.7% in the past six months compared with the industry’s rise of 66.9%. That said, let’s take a closer look at the factors bearing an impact on the company.
Polaris Strategy Paves Way for Growth
Macy's is on track with its three-year Polaris strategy, which focuses on strengthening customer relationships, expanding assortments, accelerate digital growth, optimizing store portfolio and reducing costs. In respect to cost management, the company expects that the Polaris strategy will help it attain gross savings of nearly $2.1 billion by 2022. Additionally, the company is on track with expanding brand offerings to support customer self-expression at all price points. Apart from these, the company is committed toward boosting supply chain infrastructure. It also strives to drive value across product categories and boost merchandise margins by adopting effective pricing as well as reduced promotions.
Moreover, the company’s expanded Star Rewards Loyalty program, which was initiated in 2018, is driving better customer engagement. Macy’s is evaluating its store portfolio and is on track with plans to shutter stores in lower tier malls that are least productive, while upgrading the rest. Apart from these, the company’s focus on inventory management and private label offering is helping it meet customer-oriented demand as well as enhance in-store shopping experience.
Image Source: Zacks Investment Research
Sturdy Digital Wing
Macy’s digital platform is a constant feather on its cap. During first-quarter fiscal 2020, the company’s digital sales surged 34% from the year-ago quarter’s figure and contributed 37% to net sales. Nearly 22% of online sales were generated from stores, including curbside pickup and same-day delivery. Moreover, management highlighted that 47% of new customers acquired during the quarter came from the digital channel. Additionally, 82% of the digital orders came from repeat customers. Mobile devices contributed nearly 60% to digital demand sales.
Management continues to focus on extending the availability of online assortments as well as the expansion of omni-channel capabilities. In this respect, its tie up with DoorDash for expediting delivery service is encouraging. It also collaborated with Sweden-based buy-now, pay-later group — Klarna — for offering online shoppers financial ease and payment flexibility. The company is constantly improving its mobile and website features to enhance shopping experience. Markedly, expanding digital capabilities is a vital component of the company’s Polaris Growth Strategy. The company anticipates online sales to reach nearly $10 billion by fiscal 2023.
Wrapping Up
Although higher online sales has been a boon for the company, it has however led to the added disadvantage of rise in delivery expenses. Markedly, rise in delivery expenses were a drag on the company’s gross margin during the first quarter. Moreover, a tough operating environment amid the pandemic has been causing supply chain disruptions, leading to port delays and hampering inventory levels.
Nevertheless, the company is undertaking measures such as the use of regional carriers to make deliveries more efficient. To address supply chain disruptions’, the company is adjusting its freight strategies and working closely with overseas carriers as well as brand partners. Such efforts along with the aforementioned prudent operational strategies are likely to keep the company well-placed for growth in the forthcoming periods.
Target Corporation (TGT - Free Report) , also sporting a Zacks Rank #1, has a long-term earnings growth rate of 13.3%.
Costco Wholesale Corporation (COST - Free Report) has a long-term earnings growth rate of 9.1%. It currently carries a Zacks Rank #2 (Buy).
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Macy's (M) Up 79% in 6 Months, Focuses on Polaris Strategy
Efficient operating strategies and investments to enhance digital capabilities have helped Macy's, Inc. (M - Free Report) stay afloat, despite challenges in the retail landscape. This well-known retailer of a wide range of consumer goods is gaining from efforts undertaken as part of the Polaris Strategy, which includes rationalizing store base, revamping assortments as well as managing costs prudently. Moreover, efforts undertaken to boost onmni-channel strength have been yielding. Shares of this Zacks Rank #3 (Hold) stock have gained 78.7% in the past six months compared with the industry’s rise of 66.9%. That said, let’s take a closer look at the factors bearing an impact on the company.
Polaris Strategy Paves Way for Growth
Macy's is on track with its three-year Polaris strategy, which focuses on strengthening customer relationships, expanding assortments, accelerate digital growth, optimizing store portfolio and reducing costs. In respect to cost management, the company expects that the Polaris strategy will help it attain gross savings of nearly $2.1 billion by 2022. Additionally, the company is on track with expanding brand offerings to support customer self-expression at all price points. Apart from these, the company is committed toward boosting supply chain infrastructure. It also strives to drive value across product categories and boost merchandise margins by adopting effective pricing as well as reduced promotions.
Moreover, the company’s expanded Star Rewards Loyalty program, which was initiated in 2018, is driving better customer engagement. Macy’s is evaluating its store portfolio and is on track with plans to shutter stores in lower tier malls that are least productive, while upgrading the rest. Apart from these, the company’s focus on inventory management and private label offering is helping it meet customer-oriented demand as well as enhance in-store shopping experience.
Sturdy Digital Wing
Macy’s digital platform is a constant feather on its cap. During first-quarter fiscal 2020, the company’s digital sales surged 34% from the year-ago quarter’s figure and contributed 37% to net sales. Nearly 22% of online sales were generated from stores, including curbside pickup and same-day delivery. Moreover, management highlighted that 47% of new customers acquired during the quarter came from the digital channel. Additionally, 82% of the digital orders came from repeat customers. Mobile devices contributed nearly 60% to digital demand sales.
Management continues to focus on extending the availability of online assortments as well as the expansion of omni-channel capabilities. In this respect, its tie up with DoorDash for expediting delivery service is encouraging. It also collaborated with Sweden-based buy-now, pay-later group — Klarna — for offering online shoppers financial ease and payment flexibility. The company is constantly improving its mobile and website features to enhance shopping experience. Markedly, expanding digital capabilities is a vital component of the company’s Polaris Growth Strategy. The company anticipates online sales to reach nearly $10 billion by fiscal 2023.
Wrapping Up
Although higher online sales has been a boon for the company, it has however led to the added disadvantage of rise in delivery expenses. Markedly, rise in delivery expenses were a drag on the company’s gross margin during the first quarter. Moreover, a tough operating environment amid the pandemic has been causing supply chain disruptions, leading to port delays and hampering inventory levels.
Nevertheless, the company is undertaking measures such as the use of regional carriers to make deliveries more efficient. To address supply chain disruptions’, the company is adjusting its freight strategies and working closely with overseas carriers as well as brand partners. Such efforts along with the aforementioned prudent operational strategies are likely to keep the company well-placed for growth in the forthcoming periods.
Here are 3 Key Stocks for You
Dillards, Inc. (DDS - Free Report) , flaunting a Zacks Rank #1 (Strong Buy), has a long-term earnings growth rate of 24.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Target Corporation (TGT - Free Report) , also sporting a Zacks Rank #1, has a long-term earnings growth rate of 13.3%.
Costco Wholesale Corporation (COST - Free Report) has a long-term earnings growth rate of 9.1%. It currently carries a Zacks Rank #2 (Buy).
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%.
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
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