If there's one retailer out there worthy enough to shrug off the winter weather's effects on retail sales as well as sluggish economic recovery in general, it's Macy's.
Total revenue in 2010 was up 6 percent on year at $25 billion, while profits more than doubled to $847 million. Sales have been climbing in 2011 as well.
Total sales hit $2.207 billion for the five weeks ended April 2, 2011, an increase of 1.6 percent compared with total sales of $2.172 billion in the five weeks ended April 3, 2010.
On a same-store basis, sales were up 0.9 percent in March.
Online sales (Macys.com and Bloomingdales.com combined) were up 34.8 percent in March and 33 percent year-to-date, the company reports.
The company credits its sales increases to good old common sense: picking products consumers want and selling them at the right price.
"March sales exceeded our expectations and demonstrated that our spring fashion assortments are hitting the mark with customers. We generated same-store sales increases at both Macy's and Bloomingdale's, despite a calendar shift in which the pre-Easter period and a planned cosmetics promotion at Macy's fall into April this year versus March last year," Terry J. Lundgren, chairman, president and chief executive officer, says in a company statement.
The company has raised its forecast. Same-store sales in April are expected to be up between 8 percent and 9 percent, the company says, mainly due to expected strong demand for Easter-season promotions.
That figure would translate to an increase of 4 percent to 4.5 percent for the combined March-April period. Previously, the company said it expected combined March-April sales to be up by approximately 3 percent.
Analysts see Macy's (M) stock as a buy, as the company is performing well against its peers and valuation models indicate stock prices can rise. Credit Suisse, for instance, has the stock at outperform and calls it a top pick.
Of 14 brokers tracking the stock, the mean target price is $30.75, according to Thompson/First Call, which would be a better than 27 percent gain from recent prices.
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