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Here's Why Macy's (M) Appears a Solid Investment Bet for 2022
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The year 2022 might be a bit challenging for the stock market, thanks to rising inflation, supply chain bottlenecks and the new Omicron variant that may decelerate the speed of the economic recovery at least in the first half. So, you need to be smart when it comes to investment. The right choice of stock may fetch you higher returns even amid changing market dynamics. We present you with one such stock, Macy's, Inc. (M - Free Report) , that looks well-poised, given its sound fundamentals and growth efforts.
Macy's, one of the nation’s premier omnichannel retailers, has exhibited a decent run on the bourses in the past year. Thanks to its operational initiatives — strengthening of omni-channel solutions, expanding customer reach and focus on brand innovation — the stock has outpaced the Zacks Retail - Regional Department Stores industry. In the said period, shares of this New York-based company have risen about 92.1% compared with the industry’s rise of 63.1%.
Additionally, an uptrend in the Zacks Consensus Estimate echoes the same sentiment. The consensus estimates for the current and next financial year have increased about 1% and 3.3% to $4.87 and $4.08, respectively, over the past 30 days. This Zacks Rank #1 (Strong Buy) stock’s long-term earnings growth rate of 12% highlights its inherent strength. You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Growth Drivers
Macy's has been benefiting from efforts undertaken as part of the Polaris Strategy including boosting assortments, strengthening customer relations, accelerating digital growth, optimizing store portfolio and reducing costs. The company has been witnessing sturdy growth across all three brands namely, Macy’s, Bloomingdale’s and Bluemercury.
Management is on track to strengthen its omni-channel capabilities with investments toward online shopping experiences, data and analytics, technology infrastructure as well as better fulfillment capabilities. Macy’s expanded omni-channel offerings such as curbside, store pickup and same-day delivery bode well.
During the third quarter of fiscal 2021, the company’s digital sales increased 19% from the year-ago quarter’s figure. The metric was up 49% from third-quarter fiscal 2019 levels. Digital sales represented 33% of net sales. Approximately, 60% of digital demand sales came from mobile devices. Stores fulfilled 24% of the digital sales in the quarter.
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The company has come up with a host of initiatives to deliver customers a seamless shopping experience. Its tie-up with DoorDash for expediting delivery service is yielding results. It also collaborated with Sweden-based buy-now, pay-later group — Klarna — to offer financial ease and payment flexibility to online customers. It has added PayPal and Venmo payment options. The company is constantly improving its mobile and website features to enhance the shopping experience.
Macy’s plans to launch a curated digital marketplace to strengthen its omni-channel retailing capabilities. The new marketplace will expand Macy’s assortment significantly, and help introduce new categories and brands, by enabling third-party merchants to sell products on macys.com and bloomingdales.com. To power the platform, Macy’s has partnered with Mirakl — a leading enterprise marketplace technology company. The platform is anticipated to be launched in the second half of 2022.
Management cited that the marketplace platform will accelerate Polaris Strategy and help tap new opportunities. Macy’s foresees its digital business to generate $10 billion in sales by fiscal 2023, and the new digital marketplace platform is expected to produce incremental revenues on top of that target.
Meanwhile, Macy’s continues to invest in physical stores to support the digitally-led omnichannel business model and added five off-mall, smaller format stores (Market by Macy’s, freestanding Macy’s Backstage locations, and Bloomingdale’s new off-mall, smaller store format concept, Bloomies) across Dallas, Atlanta and Washington D.C. markets in the third quarter.
Kohl's Corporation, an omnichannel retailer, flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 114.5%, on average.
The Zacks Consensus Estimate for Kohl's Corporation’s current financial year sales and EPS suggests growth of 24.1% and 704.1%, respectively, from the year-ago period. KSS has an expected EPS growth rate of 8% for three-five years.
Costco, which operates membership warehouses, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 8.3%, on average.
The Zacks Consensus Estimate for Costco’s current financial year sales and EPS suggests growth of 10.8% and 13.9%, respectively, from the year-ago period. COST has an expected EPS growth rate of 8.8% for three-five years.
Capri Holdings, a global fashion luxury group, carries a Zacks Rank #2 (Buy). The company’s bottom line has outperformed the Zacks Consensus Estimate by a wide margin in the trailing four quarters.
The Zacks Consensus Estimate for Capri Holdings’ current financial year sales and EPS suggests growth of 33.2% and 181.1%, respectively, from the year-ago period. CPRI has an expected EPS growth rate of 32.2% for three-five years.
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Here's Why Macy's (M) Appears a Solid Investment Bet for 2022
The year 2022 might be a bit challenging for the stock market, thanks to rising inflation, supply chain bottlenecks and the new Omicron variant that may decelerate the speed of the economic recovery at least in the first half. So, you need to be smart when it comes to investment. The right choice of stock may fetch you higher returns even amid changing market dynamics. We present you with one such stock, Macy's, Inc. (M - Free Report) , that looks well-poised, given its sound fundamentals and growth efforts.
Macy's, one of the nation’s premier omnichannel retailers, has exhibited a decent run on the bourses in the past year. Thanks to its operational initiatives — strengthening of omni-channel solutions, expanding customer reach and focus on brand innovation — the stock has outpaced the Zacks Retail - Regional Department Stores industry. In the said period, shares of this New York-based company have risen about 92.1% compared with the industry’s rise of 63.1%.
Additionally, an uptrend in the Zacks Consensus Estimate echoes the same sentiment. The consensus estimates for the current and next financial year have increased about 1% and 3.3% to $4.87 and $4.08, respectively, over the past 30 days. This Zacks Rank #1 (Strong Buy) stock’s long-term earnings growth rate of 12% highlights its inherent strength. You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Growth Drivers
Macy's has been benefiting from efforts undertaken as part of the Polaris Strategy including boosting assortments, strengthening customer relations, accelerating digital growth, optimizing store portfolio and reducing costs. The company has been witnessing sturdy growth across all three brands namely, Macy’s, Bloomingdale’s and Bluemercury.
Management is on track to strengthen its omni-channel capabilities with investments toward online shopping experiences, data and analytics, technology infrastructure as well as better fulfillment capabilities. Macy’s expanded omni-channel offerings such as curbside, store pickup and same-day delivery bode well.
During the third quarter of fiscal 2021, the company’s digital sales increased 19% from the year-ago quarter’s figure. The metric was up 49% from third-quarter fiscal 2019 levels. Digital sales represented 33% of net sales. Approximately, 60% of digital demand sales came from mobile devices. Stores fulfilled 24% of the digital sales in the quarter.
The company has come up with a host of initiatives to deliver customers a seamless shopping experience. Its tie-up with DoorDash for expediting delivery service is yielding results. It also collaborated with Sweden-based buy-now, pay-later group — Klarna — to offer financial ease and payment flexibility to online customers. It has added PayPal and Venmo payment options. The company is constantly improving its mobile and website features to enhance the shopping experience.
Macy’s plans to launch a curated digital marketplace to strengthen its omni-channel retailing capabilities. The new marketplace will expand Macy’s assortment significantly, and help introduce new categories and brands, by enabling third-party merchants to sell products on macys.com and bloomingdales.com. To power the platform, Macy’s has partnered with Mirakl — a leading enterprise marketplace technology company. The platform is anticipated to be launched in the second half of 2022.
Management cited that the marketplace platform will accelerate Polaris Strategy and help tap new opportunities. Macy’s foresees its digital business to generate $10 billion in sales by fiscal 2023, and the new digital marketplace platform is expected to produce incremental revenues on top of that target.
Meanwhile, Macy’s continues to invest in physical stores to support the digitally-led omnichannel business model and added five off-mall, smaller format stores (Market by Macy’s, freestanding Macy’s Backstage locations, and Bloomingdale’s new off-mall, smaller store format concept, Bloomies) across Dallas, Atlanta and Washington D.C. markets in the third quarter.
3 More Stocks Looking Red Hot
Here are three more favorably ranked stocks — Kohl's Corporation (KSS - Free Report) , Costco (COST - Free Report) and Capri Holdings (CPRI - Free Report) .
Kohl's Corporation, an omnichannel retailer, flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 114.5%, on average.
The Zacks Consensus Estimate for Kohl's Corporation’s current financial year sales and EPS suggests growth of 24.1% and 704.1%, respectively, from the year-ago period. KSS has an expected EPS growth rate of 8% for three-five years.
Costco, which operates membership warehouses, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 8.3%, on average.
The Zacks Consensus Estimate for Costco’s current financial year sales and EPS suggests growth of 10.8% and 13.9%, respectively, from the year-ago period. COST has an expected EPS growth rate of 8.8% for three-five years.
Capri Holdings, a global fashion luxury group, carries a Zacks Rank #2 (Buy). The company’s bottom line has outperformed the Zacks Consensus Estimate by a wide margin in the trailing four quarters.
The Zacks Consensus Estimate for Capri Holdings’ current financial year sales and EPS suggests growth of 33.2% and 181.1%, respectively, from the year-ago period. CPRI has an expected EPS growth rate of 32.2% for three-five years.