Finanzas: Macy’s Inc.: Taking A Page From Amazon’s Playbook

 

Like most brick and mortar stores M has been getting hit hard by Amazon.com.

M has been aggressively working to figure out the changing retail landscape.

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The retailer’s pricing trends suggest it has a handle on the issue.

A recent Wall Street Journal article suggests that Macy’s (NYSE:M) may have figured out how to deal with the online onslaught typified by Amazon.com’s (NASDAQ:AMZN) aggressive pricing. Macy’s, one of this country’s largest retails, has been struggling to find the right way to handle the changing retail landscape. It hasn’t been easy going, but the company’s discounting trends this holiday season hint that things could be getting better.

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Deal or no deal?

To be honest, the financial trends at Macy’s aren’t very compelling. The top line has been pretty much stagnant for around five years. Although there’s been a lot of activity underneath that number, including a shifting store base, the top line can’t remain moribund if Macy’s wants to grow. Adding a bit of urgency to those numbers, earnings had a nice run after the end of the 2007 to 2009 recession, but turned lower last year and look like they won’t be too great this year, either.

That said, Macy’s yield is around 4%, that’s around twice its five year average. This fact alone should interest dividend investors. And while the trailing PE is above average for the retailer, the forward PE paints a different picture. The forward PE, which includes often fallible analyst estimates, is nearly 25% below the five year average. Here’s the thing, though… that number is backed up by a price to book that’s inline with the longer-term average and price to sales and price to cash flow ratios that are below their respective averages by 40% and 33%.

Put it all together and Macy’s looks like it could be cheap today. Of course a sale price for Macy’s is only a good price if it can figure out a way to deal with the online threat typified by Amazon.com. But if the Journal’s tracking of recent sales trends is any indication, it’s probably worth watching Macy’s today.

Fuente: Seeking Alpha


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