Macy's Rally Leaves Valuation Debate Open After Better Execution

Earnings

โดย Zacks Investment Research·Read original

Summary · why it matters

Macy's shares have rallied sharply, gaining 10.4% year to date and 123.9% over the trailing 12 months, but the valuation debate remains active. The stock trades at 10.90 times forward 12-month earnings, a discount to its Zacks sub-industry at 13.46 times, the Zacks sector at 23.43 times, and the S&P 500 at 21.65 times. First-quarter enterprise comparable sales rose 3%, with Bloomingdale's up 10.2% and Bluemercury up 6.4%, while other revenues grew 8.2% to $210 million, including an 11.7% increase in credit card revenues to $172 million. However, gross margin fell 30 basis points to 38.9%, partly due to tariffs, and store closures reduced sales by about $40 million. Macy's ended the quarter with $1.3 billion in cash and nearly $2 billion in borrowing capacity, and operating cash flow swung to a $292 million inflow from a $64 million outflow a year earlier. The stock carries a Zacks Rank #3, or Hold, reflecting a middle-ground view rather than a high-conviction buy call.

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