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On Mar 18, we upgraded our recommendation on Macy’s Inc. (M - Analyst Report), one of the leading department store retailers in the United States, to Outperform, following better-than-expected fourth-quarter fiscal 2012 results. The company attained a Zacks Rank #1 (Strong Buy) status on Mar 16, after reporting impressive results.

Why the Upgrade?

Over the recent past, Macy’s has been one of the few companies performing well. The company declared impressive results on Feb 26, 2013, wherein earnings of $2.05 per share surpassed the Zacks Consensus Estimate of $1.98 by 3.5%. The company has outperformed the Zacks Consensus Estimate for 11 straight quarters by an average of 38.5%.

The stronger-than-anticipated results came on the back of My Macy's localization initiatives, omnichannel integration, robust online sales and effective cost management. Buoyed by Macy’s healthy results, management now projects fiscal 2013 earnings between $3.90 and $3.95 per share.

Following the sturdy results, the Zacks Consensus Estimates for fiscal 2013 and 2014 increased 2.6% and 1.4% to $3.92 and $4.40, respectively, in the last 30 days.

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.

Other Stocks to Consider

The stocks worth considering in the non-food retail, wholesale sector include New York & Company Inc. (NWY - Snapshot Report), Marinemax Inc. (HZO - Snapshot Report) and Hot Topic Inc. , all of which carry a Zacks Rank #2 (Buy).

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