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Macy's to Fight Retail Woes With Digitalization, Cost Control
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Retail is no more constrained to its brick-&-mortar existence. Instead it is rapidly accepting the concepts of an increasingly digitized world as advancing technology and digital transformation are playing key roles in evolving consumer shopping patterns. Retailers are now focusing more on enhancing omni-channel capabilities, optimizing store fleet and restructuring activities. Although Macy's, Inc. (M - Free Report) is not fully immune to retail headwinds, this department store retailer is leaving no stone unturned to be on growth trajectory.
This is well reflected by this Zacks Rank #1 (Strong Buy) stock’s bullish run in the past three months in a market that fell victim to escalating trade war between the United States and China. In the said period, shares of this seller of apparel and accessories, cosmetics, home furnishings and other consumer goods surged 23.1% compared with the industry’s growth of 18.1%.
Macy’s Get its Act Together
Macy’s has announced a slew of measures revolving around store closures, cost containment, real estate strategy and investment in omni-channel capabilities to enhance sales, profitability and cash flows. Additionally, management is developing e-commerce business, Macy’s Backstage off-price business along with expanding Bluemercury and online order fulfillment centers.
Moreover, the company had introduced various innovative services including Apple Pay, Same Day Delivery, Enhanced Shopping Apps, Innovation in Stores Selling Technology, Macy’s Image Search and Macy’s Wallet/Bloomingdale’s Wallet. The company’s “Buy Online Pickup in Store” initiative is also gaining traction. The company has added a new feature to its mobile app called Mobile Checkout, which allows customers to scan bar codes of items and pay via smartphones.
Management is realigning operations and focusing on curtailing costs. The company has closed 81 Macy’s stores, as part of its planned closure of about 100 stores announced in August 2016, and plans to shutter about 19 more stores. Further, the company will streamline some of the non-functional stores.
These efforts will result in annual cost saving of $300 million beginning 2018 and would allow the company to invest the same in enhancing digital business and store-related growth initiatives. Macy’s had earlier announced the restructuring of its merchandising operations that includes combining of merchandising, planning and private brands divisions into one segment.
Wrapping Up
Amid a competitive retail scenario, Macy’s has taken several strategic initiatives to adapt to the ongoing changes in the industry. These initiatives have aided the company to post earnings beat for the third straight quarter, when it reported fourth-quarter fiscal 2017 results. The big take away from the quarter was rise in comparable sales after witnessing a decline the past few quarters. Further, management hinted that strategic investments across stores, technology and merchandising are likely to increase comparable sales in fiscal 2018.
Kohl's Corporation (KSS - Free Report) delivered an average positive earnings surprise of 11.6% in the trailing four quarters. It has a long-term earnings growth rate of 6.7% and a Zacks Rank #2.
Nordstrom, Inc. (JWN - Free Report) delivered an average positive earnings surprise of 16.8% in the trailing four quarters. It has a long-term earnings growth rate of 6% and a Zacks Rank #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Macy's to Fight Retail Woes With Digitalization, Cost Control
Retail is no more constrained to its brick-&-mortar existence. Instead it is rapidly accepting the concepts of an increasingly digitized world as advancing technology and digital transformation are playing key roles in evolving consumer shopping patterns. Retailers are now focusing more on enhancing omni-channel capabilities, optimizing store fleet and restructuring activities. Although Macy's, Inc. (M - Free Report) is not fully immune to retail headwinds, this department store retailer is leaving no stone unturned to be on growth trajectory.
This is well reflected by this Zacks Rank #1 (Strong Buy) stock’s bullish run in the past three months in a market that fell victim to escalating trade war between the United States and China. In the said period, shares of this seller of apparel and accessories, cosmetics, home furnishings and other consumer goods surged 23.1% compared with the industry’s growth of 18.1%.
Macy’s Get its Act Together
Macy’s has announced a slew of measures revolving around store closures, cost containment, real estate strategy and investment in omni-channel capabilities to enhance sales, profitability and cash flows. Additionally, management is developing e-commerce business, Macy’s Backstage off-price business along with expanding Bluemercury and online order fulfillment centers.
Moreover, the company had introduced various innovative services including Apple Pay, Same Day Delivery, Enhanced Shopping Apps, Innovation in Stores Selling Technology, Macy’s Image Search and Macy’s Wallet/Bloomingdale’s Wallet. The company’s “Buy Online Pickup in Store” initiative is also gaining traction. The company has added a new feature to its mobile app called Mobile Checkout, which allows customers to scan bar codes of items and pay via smartphones.
Management is realigning operations and focusing on curtailing costs. The company has closed 81 Macy’s stores, as part of its planned closure of about 100 stores announced in August 2016, and plans to shutter about 19 more stores. Further, the company will streamline some of the non-functional stores.
These efforts will result in annual cost saving of $300 million beginning 2018 and would allow the company to invest the same in enhancing digital business and store-related growth initiatives. Macy’s had earlier announced the restructuring of its merchandising operations that includes combining of merchandising, planning and private brands divisions into one segment.
Wrapping Up
Amid a competitive retail scenario, Macy’s has taken several strategic initiatives to adapt to the ongoing changes in the industry. These initiatives have aided the company to post earnings beat for the third straight quarter, when it reported fourth-quarter fiscal 2017 results. The big take away from the quarter was rise in comparable sales after witnessing a decline the past few quarters. Further, management hinted that strategic investments across stores, technology and merchandising are likely to increase comparable sales in fiscal 2018.
Interested in the Retail Space, Check These
Urban Outfitters, Inc. (URBN - Free Report) delivered an average positive earnings surprise of 8.5% in the trailing four quarters. It has a long-term earnings growth rate of 12% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kohl's Corporation (KSS - Free Report) delivered an average positive earnings surprise of 11.6% in the trailing four quarters. It has a long-term earnings growth rate of 6.7% and a Zacks Rank #2.
Nordstrom, Inc. (JWN - Free Report) delivered an average positive earnings surprise of 16.8% in the trailing four quarters. It has a long-term earnings growth rate of 6% and a Zacks Rank #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>