Cowen Largely Positive on Macy's (M) CEO Succession Plans; Affirms at 'Market Perform'

Cowen and Company affirms its Market Perform rating on Macy's (NYSE: M) amid the company's announcement of a CEO transition earlier Thursday.

Analyst Oliver Chen commented today, President Jeff Gennette to start as CEO 1Q17, replacing Terry Lundgren who will remain as Chairman. Mr. Gennette is a 33-yr veteran of Macy's: experience in both merchandising & ops should aid transformation. We expect M to re-focus on rapidly changing customer trends to drive store traffic, expand off-price, increase speed/streamline & execute an evolving omni-channel experience.

Chen extrapolated: Mr. Gennette could potentially be a less good fit if the company has greater need for a new CEO with more explicit supply chain, fast-fashion, & online experience; and a fresh outside and new perspective. Nonetheless, in our view, Mr. Gennette could be a solid fit for the CEO role because we do believe he can be effective in getting things done in a large organization: 1) we think. Mr. Gennette could execute on omni-channel and adjacent growth initiatives (off-price, beauty, and China among others); 2) new CEO’s extensive background in merchandising and retail operations should be a positive and help guide strategy to drive Gen Z. traffic to make the dept. store culturally + commercially significant again; and 3) we believe Mr. Gennette is a cultural fit at Macy's given his long tenure at the company (33 years).

For an analyst ratings summary and ratings history on Macy's click here. For more ratings news on Macy's click here.

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