Macy's Omnichannel Future


27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


 

Macy's Inc (NYSE: M) is a good long term investment stock based on its long term price chart analysis as being an outperformer the past few years. Investors are bullish. Omnichannel retail will transform the consumer shopping experience. Omnichannel brings good opportunities for investors. Organizations that execute the right omni-channel strategy today can be an important driver of growth for brick-and-mortar retailers.

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How is Macy’s capitalizing in omnichannel? There are some key strategic insights for investors to know.


Macys.com's customer-centric philosophy lifts sales, satisfaction and pays off. As mobile and localization become even more vital pieces to the shopper marketing puzzle, retailers are utilizing strategies to reach and communicate with consumers in more relevant ways. Macy's will continue to communicate the best it can with consumers across the mobile channel. The company has been strongly committed to strengthening its online presence of its brands.


Omnichannel Retail

Major retailers including Macy’s have made significant technology investments in this area which is being led by consumer demand. Omnichannel retail has reached a tipping point. Retail technology is rapidly evolving from serving customers through bricks-and-mortar stores to now having to serve them from through a number of different channels. Macy’s clearly understands generating increases in revenue is paramount and the key to success.




Retail Competition


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Macy's top competitors are with companies Dillard's Inc. (NYSE: DDS) and Saks Incorporated (NYSE: SKS). Macy’s faces strong competition in retail from these retailers in their geographic areas, including other traditional, moderate or luxury department stores, general merchandise stores, off-price and discount stores and other forms of shopping including the Internet , mail order catalogs and television. Dillards, Inc. reported solid returns for fourth quarter with a 30 percent increase in earning per share. The company has a market cap of $3.96 billion; its shares trading around $81.77 with a P/E ratio of 14.9. Dillard's is one of the nation's largest fashion apparel and home furnishing retailers.


Saks, Inc. operates as a luxury retailer, at a higher price point for affluent consumers. Omnichannel initiatives are aggressive and strong for Saks in 2013. Saks has invested tens of millions of dollars into updating online technology, omnichannel and e-commerce systems. Macy's also sells goods at a higher price point. Macy's Inc and Saks both beat 2012 holiday quarter profit estimates. Both retailers continue investing in online technology this year.


Saks continues to execute core merchandising, service, and marketing strategies while building critically important omni-channel capabilities this year. Several new initiatives were announced which include Project Evolution, the re-launch of the SaksFirst loyalty program, along with the opening of several new stores.


Price / Sales Ratio Comparison

Macy's Price / Sales Ratio TTM: 0.6303

Saks Price / Sales Ratio TTM: 0.6623

Dillards Price / Sales Ratio TTM


Investment Summary

Macy’s growth expectations continue towards same-store sales growth. Quarter revenue totaled $9.4 billion.  Macy’s shares currently trade at $40. Its 2013 earnings closed at $2.05 per share. Macy’s omnichannel strategies resulted in higher profits for last year with a strong outlook for 2013. Macy's also ended 2012 quite well, beating its own and analyst expectations with its fourth-quarter earnings. Revenue, improved earnings and prices are expected to rise.


Macy's wants to be at the cutting edge of all technology changes and innovations taking place in retail. The company shows no signs of slowing its pace delivering excellent turnaround however the market is still in recovery. Strategic outlook to expand its markets could bring challenges to its sales performance and company performance.


27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


Posted In: Consumer DiscretionaryDepartment Stores