Macy's (M) Moves Higher as CEO Lundgren Sees 'Good' Chance of Record Holiday Sales
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Price: $19.92 +1.94%
Overall Analyst Rating:
NEUTRAL (
Down)
Dividend Yield: 3.2%
EPS Growth %: -71.4%
Overall Analyst Rating:
NEUTRAL (
Down)Dividend Yield: 3.2%
EPS Growth %: -71.4%
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Macy's (NYSE: M) is higher on the session Monday following a positive look at CEO Terry Lundgren in Barron's over the weekend, though it might be more for the comments rather than the brief bio.
Barron's notes that Lundgren doesn't appear to be a person that could cut out 7,000 positions to save a company, but that's exactly what he did back in 2009 as the financial muck piled up. Now, shares of Macy's are trading stronger than ever, up at least 18 percent in 2012 while EPS is up 47 percent.
Since Lundgren took over in 2003, sales have climbed 80 percent while net income doubled. EPS this year is expected to hit $3.40 and grow to $3.76 next year. Shares also go for about 10 times earnings, well below the average for the S&P Retail Select Industry index.
One aspect that has helped Macy's along the way has been exclusivity. Along with a strong store-brand program, Macy's have been a leader in private-label merchandising and forges strong, exclusive relationships with designers. The effort has helped to separate Macy's from the likes of Target (NYSE: TGT), J.C. Penney (NYSE: JCP), and Kohl's (NYSE: KSS), amongst others.
This holiday, Macy's is expected to see upside stemming from its recent shift from regional to a more-localized operating structure. The MyMacy's initiative also allowed shoppers to order whatever they wanted from any Macy's location. The retailer also pushed online sales this year, fulfilling orders from 322 stores and a new warehouse in West Virginia (as big as 46 football fields, Barron's notes).
For the current quarter, Lundgren thinks there is a good chance that Macy's will smash previous holiday sales results. He's also looking for a 4.2 percent increase in fourth-quarter comps to boot.
Shares of Macy's are up 3.3 percent.
Barron's notes that Lundgren doesn't appear to be a person that could cut out 7,000 positions to save a company, but that's exactly what he did back in 2009 as the financial muck piled up. Now, shares of Macy's are trading stronger than ever, up at least 18 percent in 2012 while EPS is up 47 percent.
Since Lundgren took over in 2003, sales have climbed 80 percent while net income doubled. EPS this year is expected to hit $3.40 and grow to $3.76 next year. Shares also go for about 10 times earnings, well below the average for the S&P Retail Select Industry index.
One aspect that has helped Macy's along the way has been exclusivity. Along with a strong store-brand program, Macy's have been a leader in private-label merchandising and forges strong, exclusive relationships with designers. The effort has helped to separate Macy's from the likes of Target (NYSE: TGT), J.C. Penney (NYSE: JCP), and Kohl's (NYSE: KSS), amongst others.
This holiday, Macy's is expected to see upside stemming from its recent shift from regional to a more-localized operating structure. The MyMacy's initiative also allowed shoppers to order whatever they wanted from any Macy's location. The retailer also pushed online sales this year, fulfilling orders from 322 stores and a new warehouse in West Virginia (as big as 46 football fields, Barron's notes).
For the current quarter, Lundgren thinks there is a good chance that Macy's will smash previous holiday sales results. He's also looking for a 4.2 percent increase in fourth-quarter comps to boot.
Shares of Macy's are up 3.3 percent.
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