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Macy's (M) on Track to Enhance Its Backstage Locations

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Macy's, Inc. (M - Free Report) continues to deepen its focus on growing as a digitally-led omnichannel retailer and executing its Polaris Strategy. This strategy mainly aims at strengthening customer relationships, expanding assortments, accelerating digital growth, optimizing store portfolio and reducing costs. In latest developments, management looks forward to extending its Backstage locations across the country this spring.

M will introduce 37 Macy’s store-within-store Backstage locations starting Apr 9 through Jun 2022. These stores, ranging from 11,000 to 16,000 square feet, will offer guests on-trend assortments and quality merchandise to fit their personal style. Guests can shop off-price and luxury items under one roof. Here, consumers can find fashion for apparel with a broader range of toys, housewares, beauty items, gifts, handbags, activewear and a lot more.

Last year, M expanded its off-mall, small format stores, including free-standing Backstage outlets in Dallas, TX, and three Market by Macy’s stores in Dallas, TX and Atlanta, GA. Such stores are efficiently catering to the needs of changing consumer behaviors and boosting higher sales. Management successfully introduced Macy’s Backstage in about 300 stores, nationwide. During the fourth quarter of fiscal 2021, Backstage locations exceeded Macy’s stores by more than three times.

Going forward, management intends to open more off-mall locations throughout this year. M will introduce a Backstage inside the iconic Macy’s State Street flagship store in Chicago on Apr 9, expanding to Macy’s New York City flagship store, Herald Square in May. These stores are offering a seamless shopping experience, allowing customers to earn and redeem Star Rewards, and use Macy’s credit card at all the locations.

What’s More?

Recently, Macy’s introduced its brand platform Own Your Style to give a valuable meaning to individual style. M offers a curated assortment of the top brands with the latest trends. Launch of this platform highlights a major step within the Polaris strategy to win fashion via digital and social-first experiences, branded content, expert advice, personalized suggestions and so on. Management is on track to fully integrate Own Your Style at macys.com, Macy’s app, social media and stores.

Macy's’ Polaris Strategy to better adapt to the retail ecosystem appears encouraging. In addition, management has been enhancing M’s digital offerings for a while to deliver customers a seamless shopping experience. M’s collaboration with the Swedish buy now, pay later group Klarna is enabling it to offer shoppers the financial ease and payment flexibility with their online purchases. Its tie-up with DoorDash for expediting delivery service is also encouraging. During the fiscal fourth quarter, digital sales increased 12% from the prior fiscal-year quarter’s level and surged 36% from fourth-quarter fiscal 2019 levels. Digital penetration was 39% of net sales in the quarter under review.

This currently Zacks Rank #3 (Hold) player’s shares have surged 32.5% in the past year, outperforming the industry’s 19.6% rally.

Key Picks in Retail

Some better-ranked stocks are Capri Holdings (CPRI - Free Report) , Boot Barn Holdings (BOOT - Free Report) and Tapestry (TPR - Free Report) .

Capri Holdings, which offers accessories and footwear, has a Zacks Rank #2 (Buy) at present. CPRI has an expected earnings per share (EPS) growth rate of 53.9% for three-five years. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Capri Holdings’ current financial-year EPS suggests growth of 215.8% from the year-ago corresponding figure. CPRI has a trailing four-quarter earnings surprise of 1,018.2%, on average.

Boot Barn Holdings, a lifestyle retailer of western and work-related footwear, apparel and accessories, presently has a Zacks Rank of 2. BOOT has an expected EPS growth rate of 20% for three-five years.

The Zacks Consensus Estimate for Boot Barn Holdings’ current financial-year sales and EPS suggests growth of 62.6% and 220.8%, respectively, from the year-ago corresponding figures. BOOT has a trailing four-quarter earnings surprise of 47.1%, on average.

Tapestry, a renowned designer of fine accessories, presently carries a Zacks Rank #2. TPR has a trailing four-quarter earnings surprise of 28.2%, on average.

The Zacks Consensus Estimate for Tapestry’s current-year sales and EPS suggests growth of 17.5% and 22.9%, respectively, from the corresponding year-ago levels. TPR has an expected EPS growth rate of 12.5% for three-five years.