Macy's is bucking the trend of retail's woes: Morning Brief – Yahoo Finance


- Advertisement -

This article first appeared in the Morning Brief. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe
Monday, November 28, 2022
Today's newsletter is by Brian Sozzi, editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Read this and more market news on the go with Yahoo Finance App.
So I'm watching the Macy's (M) Thanksgiving Day Parade and was pleasantly surprised to see musical performances by icons Paula Abdul and Mariah Carey on the docket.
They both crushed it in my view, and so did Macy's CEO Jeff Gennette sitting behind them in a seasonal bright blue scarf and CEO hair.
Then I see that the parade had 27.7 million viewers between linear and streaming platform Peacock — the most in five years and a slight bump from last year's 27.4 million views.
Those two wins were enough for me to dive back into Macy's fundamentals for this year.
To be clear, I've been super critical of this company for years.
Management was painfully slow to close stores. The stores that were opened looked terrible. You couldn't find associates in the store to ask basic questions (for example: Where is the fitting room?). There was too much inventory in the stores. The website was awful, ditto the mobile app. The company was often more inclined to over-promise and badly under-deliver on earnings.
However, the winds of positive change appear to have been blowing through Macy's this year, which is even more impressive considering the shifts happening in consumer spending — paying up for experiences and buying less stuff — amid the sluggish economy.
Here are a few things that stand out on Macy's fundamentally on this Cyber Monday:
The stock has pretty much out-performed the S&P 500 for the majority of 2022. No small feat given the hate for consumer discretionary stocks with recession fears swirling.
Inventory levels are some of the healthiest among rival department stores, reflecting management efforts to fine-tune assortment planning.
Same-store sales are out-performing rival department stores such as Kohl's.
Bloomingdale's is having a good year despite higher income shoppers pulling back on their spending amid stock market wealth destruction.
I am not alone in spotting a revival in Macy's fortunes.
"Think about what has happened over the last three years," former department store executive and frequent Yahoo Finance Live guest Jan Rogers Kniffen told me.
"First, J.C. Penney completely imploded and reconstituted itself as a much smaller competitor — and the bottom 40% of Macy's business always overlapped JCP's business. Kohl's, which also overlaps the bottom 40% of Macy's business, slowed a lot as a competitor — it lost share, dropped volume and became less competitive. Then, Nordstrom, which has always overlapped the top 25% of Macy's business and more like 50% in some of Macy's best stores, started shooting itself in the foot."
Kniffen also agreed in Macy's doing a better job managing inventory and getting store expenses under wraps.
By no means is Macy's in perfect fundamental shape, something captured in the stock trading at a 65% discount to the S&P 500 on a forward P/E basis. Same-store sales are still under pressure, and the retailer still operates 770 plus physical stores in the age of digital. The short-term margin outlook is murky at best given the promotional intensity in retail right now. The company just cut its 4Q guidance two weeks ago too, owing to a slow start to holiday spending this month.
But I must give Macy's credit where credit is due — they are operating a better department store and it's starting to show up in the financials. How that plays out in the stock price in 2023… is for you to assess.
Happy Trading!
Dallas Fed Manufacturing Activity, November (-23.0 expected, -19.4 during prior month)
Arrowhead (ARWR), AZEK (AZEK)
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube
Related Quotes
U.S. equity investors reeling from a disappointing year in the stock market may not have much to look forward to going into 2023, according to strategists at Goldman Sachs.
U.S. investors returning from a holiday weekend will face a deluge of economic data in the week ahead as Wall Street heads into the final month of 2022.
Goldman Sachs thinks that being defensive on stocks is the best bet headed into a 2023 that may see a long-talked about U.S. recession.
Reuters reported on Friday that the Foxconn-operated plant could see a further drop in November shipments as thousands of employees quit amid discontent over strict COVID-19 restrictions to curb rising infections in China. Separately, a Bloomberg News report citing a source said earlier in the day that there could be a shortfall of 6 million iPhone Pro units this year due to production-related problems. The shortages kept many consumers from buying the high-end phones during Black Friday – the year's busiest shopping period – and are likely to dampen sales in the crucial holiday quarter.
A Mississippi-based furniture company, United Furniture Industries, has become a bad Samaritan for its employees just before Thanksgiving. The company fired almost 2,700 employees in text messages and emails. The company’s employees, spread across North Carolina, Mississippi, and California, were unemployed before Thanksgiving. "At the instruction of the board of directors, we regret to inform you that due to unforeseen business circumstances, the company has been forced to make the difficult de
U.S. stocks descended Monday morning as unrest in China over the nation's restrictive COVID controls weighed on global sentiment and Wall Street returned from a holiday weekend.
In a court filing, New Jersey-based BlockFi said it owes money to more than 100,000 creditors. It listed crypto exchange FTX as its second-largest creditor, with $275 million owed on a loan extended earlier this year.
The average rate on a new vehicle loan is now 5.78%, up from 3.86% in January, according to
Cathie Wood makes big bets on potential huge winners. But Ark Invest's top 10 holdings, including Tesla and Roku, have tumbled in 2022.
(Bloomberg) — The crypto rout has room to run, according to veteran fund manager Mark Mobius. Most Read from BloombergNext Covid-19 Strain May be More Dangerous, Lab Study ShowsApple to Lose 6 Million iPhone Pros From Tumult at China PlantKey Trump 2024 Rivals Silent After His White Supremacist MeetingThe co-founder of Mobius Capital Partners LLP said in an interview Monday in Singapore that his next target for Bitcoin is $10,000. He added he wouldn’t invest his own cash or client money in digi
If you’ve already maxed out your Roth IRA this year but want to stash away more for retirement, here are five other places to put your money.
Investors looking for a guiding hand to steer them safely through the current hazardous stock market landscape could do worse than listen to what billionaire Ken Fisher has to say. The Fisher Investments founder famously started his independent money management firm with $250 in 1979, a company that is now a $197-plus billion going concern, while Fisher’s own net worth stands north of $5 billion. So, for those getting restless from 2022’s unrelenting bear, Fisher has some very simple advice: "Th
CLEVELAND (AP) Seconds from a third straight win, added momentum and a little breathing room atop the below-average NFC South, the Tampa Bay Buccaneers folded. The Bucs gave up a 12-yard touchdown pass with 32 seconds left in regulation, struggled offensively in OT and lost 23-17 when Cleveland's Nick Chubb scored on a 3-yard run with 19 seconds remaining. ''Not closing it out is a sickening feeling,'' said rookie running back Rachaad White.
FTX lied. Regulators in the United States and the Bahamas, where Bankman-Fried lives and where FTX was headquartered, have launched investigations. The Bankman-Fried regime has been heavily criticized by the new FTX CEO in charge of the restructuring John Ray, who said that the former trader and his two associates have failed on every level.
The second round of group stage games concludes on Monday as Groups G and H take to the field again.
Aussies are up in arms over the demise of yet another classic Australian biscuit. Here's what you need to know.
Events begin at 6 p.m. Dec. 3 and mark the city's start to the Christmas season.
In this article, we will be taking a look at 10 Robinhood stocks to buy that are too cheap to ignore. To skip our detailed analysis of these stocks, you can go directly to see the 5 Robinhood Stocks To Buy That Are Too Cheap To Ignore. Robinhood, a commission-free stock trading and investing company, has […]
Financial services are one of the world's largest industries, worth trillions of dollars. Financial technology companies like SoFi Technologies (NASDAQ: SOFI) are trying to do things differently and, as a result, are nipping at the heels of traditional banks. Here is why SoFi's stock could shine like a diamond in 2023.
Hut 8 Mining Corp. (Nasdaq: HUT) (TSX: HUT) ("Hut 8" or the "Company") announces that it has requested mediation proceedings to be commended with Validus Power Corp. ("Validus"), a third-party supplier of energy to the Company's mining facility in North Bay, Ontario.


- Advertisement -


Please enter your comment!
Please enter your name here

Share post:




More like this

Ghana, creditor panel agree on debt restructuring, paving way for IMF cash

Ghana has finalised a pact with its official creditor...

Nigeria strikes deal with Shell to supply $3.8 billion methanol project

Nigeria has struck a deal for Shell (SHEL.L), opens new...

Africa’s $824 billion debt burden and opaque resource-backed loans hinder its potential, AfDB president warns

Africa's immense economic potential is being undermined by non-transparent...

IMF: South Africa needs decisive efforts to cut spending

South Africa needs more decisive efforts to cut spending...