Macy’s Stock Jumps 7% on Strong Earnings

by Robert Martin | November 13, 2013 9:14 am

Macy’s Stock Jumps 7% on Strong Earnings

MacysLogo e1297955793746 Macys Stock Jumps 7% on Strong Earnings[1]Macy’s (M[2]) 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[3] with some new strategies to draw in customers. One is called My Macy’s[4]. 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[5] of rivals Walmart (WMT[6]) and Amazon (AMZN[7]).

More good news for Macy’s stock investors: A better customer service training program[8] 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[9]).

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.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2010/08/MacysLogo-e1297955793746.jpg
  2. M: http://studio-5.financialcontent.com/investplace/quote?Symbol=M
  3. less-than-stellar Q2: http://investorplace.com/2013/08/macys-earnings-signal-trouble-for-retail-stocks/#.UoN-PCeQOIA
  4. My Macy’s: http://www1.macys.com/campaign/om/mymacys.jsp
  5. site-to-store strategy: http://investorplace.com/2013/03/walmart-to-offer-lockers-for-in-store-pickups/
  6. WMT: http://studio-5.financialcontent.com/investplace/quote?Symbol=WMT
  7. AMZN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMZN
  8. customer service training program: http://online.wsj.com/news/articles/SB10001424052748703362904576219073886407268
  9. JCP: http://studio-5.financialcontent.com/investplace/quote?Symbol=JCP

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