Macy’s Inc. (M - Analyst Report) , one of the leading department store retailers in the U.S., posted healthy comparable-store sales for the five-week period ended September 29, 2012.
Comparable-store sales improved 2.5% year over year for the month of September, attributable to continued strength in its online business. Total sales increased 2.7% to $2.4 billion compared with $2.3 billion in the comparable prior-year period.
The company stated that the comparable store sales for August/September combined, marked an elevation of 3.6% year over year, reflecting strong back-to-school sales. Year-to-date, Macy’s sales augmented 3.7% to $16.4 billion compared with $15.8 billion in the same period last year, while, same-store sales increased 3.6%.
Online sales, which include sales from macys.com and bloomingdales.com, surged 39% in September 2012. On a year-to-date basis, online sales shot up 35.8% from the comparable period last year. The company remains on track to expand both Macy's and Bloomingdale's brands online.
Despite secular headwinds, Macy’s has been performing well in the current fiscal. The company has been taking a number of initiatives in order to bolster its sales, profitability and cash flows. These steps include integration of operations, consolidation of divisions as well as developing e-commerce business and online order fulfillment centers.
We remain optimistic about the company’s customer-centric localization initiative called “My Macy’s.” The program aims at improving comparable-store sales and reducing operating expenses, with stores and merchandise assortments focusing on local customer needs and preferences.
Macy’s, which competes with J. C. Penney Company Inc. (JCP - Analyst Report) , Dillard’s Inc. (DDS - Analyst Report) and Saks Incorporated , currently operates approximately 840 department stores in 45 states, the District of Columbia, Guam and Puerto Rico.
Currently, we have a long-term ‘Neutral’ recommendation on the stock. However, Macy’s holds a Zacks #2 Rank that translates into a short-term ‘Buy’ rating.