The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Wall Street expects Macy’s Inc to report the best sales among US department stores when it reports holiday quarter results on Tuesday, benefiting from its investments in online business and ability to keep its shelves amply stocked.
Analysts said the company was able to keep its supplies steady during the peak shopping season as it used multiple ports to receive early deliveries of apparel and accessories from overseas suppliers.
That is in contrast to their expectations for rival Nordstrom Inc as struggles at its Rack off-price division, which accounts for a third of its sales, turned Wall Street cautious on its near-term prospects.
“Nordstrom was the original digital strategy store, but Macy’s has caught up and really has done more. Macy’s has embraced a more data-driven, disciplined approach to managing all aspects of the business,” retail analyst Jane Hali said.
ADVERTISEMENT
Analysts also expect Kohl’s Inc, which has seen takeover bids from activist investors, to benefit from lower discounts and its tie-up with Sephora beauty chain, but they doubt the strength of its online business.
The Context
In its last quarter, Macy’s added 4.4 million new customers, up 28 percent from pre-pandemic levels, with around a third of them returning to the brand after months. J.P. Morgan analysts said Macy’s is a primary market share beneficiary, with J.C. Penney and Belk ceding ground.
Macy’s quarterly online sales has grown for nearly two years, thanks to its loyalty program that has attracted million of younger customers. It plans on building on the momentum by launching a marketplace, where third-party sellers could sell brands it does not carry and help expand its customer base.
The Fundamentals
** Analysts polled by Refinitiv expect Macy’s fourth-quarter revenue to jump 25 percent and profit to more than double.
** They expect Nordstrom sales to decline sharply from pre-pandemic levels, although that implies a 24 percent increase from a year earlier when it faced shipping delays.
** Kohl’s revenue is expected to jump 11 percent from a year earlier, but was likely to be roughly flat when compared with pre-pandemic levels.
ADVERTISEMENT
Wall Street Sentiment
** Macy’s current mean price target implies a 35 percent upside to Thursday’s close, while Nordstrom’s and Kohl’s are both roughly 13 percent above their last closing price.
By Praveen Paramasivam; Editing by Arun Koyyur
Learn more:
Macy’s Raises Annual Forecast as People Return to Stores
Macy’s Inc on Tuesday raised its forecast for annual sales and earnings, betting on pent-up demand as shoppers vaccinated for the coronavirus return to stores to upgrade their wardrobes and splurge on luxury goods.
The Japanese apparel chain will be launching its sister brand GU in the US later this year, targeting younger consumers with lower prices and a curated selection of trendy wares.
Canada, France and Ireland are among the countries working with home-grown fashion talent to create uniforms for their teams at this summer’s Olympic Games. For these small labels, it’s an unprecedented opportunity to capitalise on one of sports’ largest events.
The online fashion retailer plans to update China’s securities regulator on the change of the initial public offering venue and file with the London Stock Exchange as soon as this month, a person with knowledge of the matter said.
The company, under siege from Arkhouse Management Co. and Brigade Capital Management, doesn’t need the activists when it can be its own, writes Andrea Felsted.