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Monday, November 29, 2021

Macy’s Analysts Disclosed Q3 Revenue: “Potential for New Value Discovery”

Macy’s on Thursday reported third-quarter adjusted earnings per share (EPS) of $ 1.23 on revenue of $ 5.4 billion. Both metrics topped the analyst consensus estimate of 31 cents and $ 5.2 billion, respectively. Revenue increased by 35.3 percent over last year.

Macy’s reported growth in like-store sales of 35.6 percent, beating analysts’ estimates of 29.3 percent. Online sales were up 19 percent over the same period last year and 49 percent over the previous year. Online sales currently account for 33 percent of total sales, up from 23 percent in 2019, according to Macy’s.

Perhaps the most optimistic news from Macy’s is that the company has hired consulting firm AlixPartners to rethink its business model. Activist investor Jana Partners is pressuring Macy’s to spin off its e-commerce business in order to potentially make a profit.

Voices from the street

Morgan Stanley analyst Kimberly Greenberger said rising costs and margin risks are forcing her to be wary of Macy’s.

“Rising costs and the difficulty of balancing sustained full-price sales could impact 22-year results, especially if demand slows,” Greenberger wrote in a note.

Credit Suisse analyst Michael Benetti said US consumers are strong, and that strength is reflected in sales growth and profitability for the same stores.

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“While we have concerns that industry pressures will resume in the long term by the end of 2022, our increased target reflects Macy’s better short-term performance and the potential for new value discoveries (such as a larger market model) in 2022 and beyond. beyond, ”Benetti said. wrote.

Telsey Advisory Group analyst Dana Telsi said Macy’s third quarter was impressive, but long-term traffic problems remain.

“The fourth quarter earnings per share forecast is slightly below the current consensus, despite strong third quarter trends, impacted by supply chain constraints, a tight labor market and additional shipping fees that are foreseen in the forecast,” Telsi wrote.

Ratings and target prices

  • Morgan Stanley has a below-normal rating with a target of $ 23.
  • Credit Suisse is below expected rating with a target of $ 32.
  • Telsey Advisory Group has a market performance rating and a $ 40 target.

Wayne Duggan

© 2021 The Epoch Times. The Epoch Times does not provide investment advice. All rights reserved.

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