Macy’s announced recently that it had a healthier inventory position for the year and it looks forward to increasingits customer base. The company has also experienced a boost from the international tourism. The shares of the company closed up to over 10% yesterday and its shares have risen more than 30% since the beginning of the year.
Macy’s commenced the year on a higher notch as it reports an increase in sales, earnings, and cash flow that were realized during the last year’s holiday season activities. The company surpassed all the Wall Street’s estimation prompting it to raise its expectations for the year 2018.
According to the report, Macy’s recorded 48 cent earnings per share up from the expected 37 cents. The firm was expecting $5.4 billion revenue, it attained $5.5 billion. In addition, the firm reported an increase of 4.2% on same-store sales compared to its expected 1.4%. In addition, revenues from tourists increased by 10% compared to the previous year.
The company is currently reorganizing its operations strategies and it expects to terminate its joint venture with Fung Retailing limited based in China in order to focus on the Alibaba’s TMall online platform. Macy’s international markets include China, the UK, andBrazil. According to the company, the best-selling categories are fine jewelry and dresses. The company is enjoying all the benefits of having a healthy consumer spending.
Several market analysts including Morgan Stanley and Deutsche Bank recently downgraded the company shares quoting the declining sales and profit demands from the online players. But the latest results from the Macy’s reveal a better picture than it was expected. However, the company is facing stiff competition from Amazon to become the leading apparel retailer by the end of the year.
Macy’s Unique Strategy
To outperform its rivals, the firm is focusing on launching its new concepts in stores such as branded pop-up shops and enhancing its off-price business known as Macy’s Backstage. Macy has already opened 20 Backstage prime locations and plans are underway to introduce over 100 Backstage sites before the end of the year.
Recently, Macy’s announced its plans to acquire the Story, a concept shop based in New York City and the company intends to bring the founder of the Story, Rachel Shechtman to lead the team in developing the unique business strategy.
Furthermore, Macy’s has launched its loyalty program for its customers to allow shoppers to redeem rack up points on their purchases for both online and physical stores. In the past, the firm was limited to the retailer’s credit card holders.
In addition, the company is planning to roll out mobile checkout services to all its prime locations before the year ends and it also plans to add a virtual reality shopping experience to a selection of its stores as part of its long-term strategy to expand its presence across the globe.