Macy’s (M) gained some momentum heading into the important holiday shopping season this morning. Strong third-quarter Macy’s earnings sent M stock up 7% in pre-market trading.
Macy’s earnings per share came in at 47 cents per share, up 31% from the year-ago period and 21% above what analysts had forecast for Macy’s stock.
Macy’s Stock Gets Back on Track
Apparently, Macy’s stock was able to brush off a less-than-stellar Q2 with some new strategies to draw in customers. One is called My Macy’s. It tailors store inventory to local market demand, and dovetails with Macy’s omnichannel strategy to make it easy for customers to “shop ahead” and reserve items for pickup in-store through an online portal. The move is very similar to the site-to-store strategy of rivals Walmart (WMT) and Amazon (AMZN).
More good news for Macy’s stock investors: A better customer service training program for employees also helped to boost comparable sales this quarter, up 3.5% from the year-ago quarter.
Driving more customers to their stores through this three-pronged strategy is key for Macy’s to expand its margins and for Macy’s stock to avoid going the way of JCPenney (JCP).
In the report, Macy’s reiterated its guidance from August, projecting a 2.5% to 4% increase in comparable sales in the second half of the year. Management also expects Macy’s earnings per share for the 2013 fiscal year to be in the range of $3.80 to $3.90. This is above the $3.78 earnings per share of M stock that analysts currently forecast for the year.
Going into the holidays, these positive numbers set a bullish tone for both Macy’s stock and retail stocks in general.
As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.