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Several retailers have posted record profits for fiscal year 2014, and retail analysts believe this trend is going to continue in 2015 as the economy continues to grow. Dana Telsey, Telsey Advisory Group CEO and chief research officer, was on CNBC Wednesday to talk about the overall retail sector and why she is bullish on Macy's, Inc. M.
The Year Of Investment Span
“I think overall what we are seeing from a bunch of retailers, 2015 is the year of investment span,” Tesley said. “We are seeing companies try to figure out ways to accelerate their top-line growth.”
She explained, “Macy’s did the same thing; they came in with guidance for '15 of $470 to $480 below the consensus of $483 and certainly what they are doing with the initiatives.”
Top-Line Growth Isn't Speedy
She continued, “It takes time to accelerate that top-line growth, but you have got to put it in place, and we have seen company after company talk about whether it’s online, whether it’s international, whether it’s adjusting their systems to take advantage of
. That’s what they are all trying to do to accelerate top line.”
Non-Buy Ratings: 26/40 Retail Calls
When asked why Telsey has 26 non-buy ratings among its 40 retail calls, Telsey replied, “I have a theme of fewer, but better.”
“I think there are fewer companies that are doing better. I think the valuations of some of these companies have certainly moved higher. I think you have the tailwind of a consumer who could be in a multi-year time period of better spending, but you have got to get them at the right price.
“And when I think of things, 'Where can big become bigger?' I think big can become bigger at companies like Limited, where you continue to have international growth ahead of you. I think you are going to see big become bigger at Macy’s as they keep moving along.”
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