Macy’s Inc.’s relentless endeavors to keep itself on the growth trajectory have paid off well in an economy, which is gradually making its way out of the woods. The company has been moving on and keeping its upbeat note, as evident from the healthy sales results for the five-week period ended March 31, 2012.
The leading department store retailer in the U.S. saw its comparable-store sales rising 7.3% in March 2012, following an increase of 4.6% in February 2012 and compared with a marginal growth of 0.9% in March 2011.
Cincinnati, Ohio-based Macy’s said that its total sales for March grew 6.9% to $2,358 million from $2,206 million in the same month last year.
Online sales, which include sales from macys.com and bloomingdales.com, continued to show growth momentum in March, soaring 39%. The company seeks to expand both Macy's and Bloomingdale's brands online.
As of March 31, 2012, comparable-store sales climbed 6.1%, whereas total sales rose 6.3% to $4,218 million from $3,969 million in the same period last year. Online sales surged 35.6% during the period.
Macy’s hinted that comparable-store sales benefitted from early Easter and a calendar shift in a cosmetics show to March this year compared to April in the prior year.
Buoyed by better-than-expected March sales results, management hinted that comparable-store sales for the combined March and April period is expected to rise between 4.3% and 4.5%, up from 3% to 3.5% projected earlier. The guidance considers comps growth of 1% to 1.3% expected for the month of April.
Macy’s also informed that sales for the month of April are likely to be softer than March due to rush in shops in March on account of early Easter and a shift in the cosmetic event. Moreover, Mother’s Day in the later part of May will also prove unfavorable for April sales.
Macy’s department stores sell a wide range of merchandise. Its products include men’s, women’s, and children’s apparel and accessories, cosmetics, home furnishings and other consumer goods.
Macy’s, which competes with J. C. Penney Company Inc. , Dillard’s Inc. and Saks Incorporated , currently operates approximately 840 department stores in 45 states, the District of Columbia, Guam and Puerto Rico.
In an attempt to increase sales, profitability and cash flow, the company has been taking steps such as integration of operations, consolidation of divisions, customer-centric localization initiatives, as well as developing e-commerce business and online order fulfillment centers. Moreover, Macy’s continues to focus on price optimization, inventory management and merchandise planning to drive traffic.
Currently, we have a long-term ‘Outperform’ rating on the stock. However, Macy’s holds a Zacks #3 Rank that translates into a short-term ‘Hold’ rating, and defines the weaker sales expectation for the month of April.