Macy’s Posts Lackluster 2014 Results (Part 4 of 9)
Same-store sales
Same-store sales, or comparable-store sales, is an important metric to assess the performance of department stores like Macy’s (M). The metric measures the sales generated by the existing stores over a certain time period, excluding the impact of stores opened or closed during the period. Department stores make up about 6.44% of the SPDR S&P Retail ETF (XRT). Macy’s makes up 0.95% of XRT.
Fiscal 2014 same-store sales
Macy’s same-store sales growth slowed down to 0.7% in fiscal 2014 compared to 1.9% in fiscal 2013 and 3.70% in fiscal 2012. Including sales from third-party licensed departments, same-store sales were up 1.4%. In 4Q14, Macy’s same-store sales increased by 2.0%, excluding licensed departments. Same-store sales, inclusive of third-party licensed departments, were up 2.5% in 4Q14. The company opened five outlets and closed 22 locations. The company ended the year with 823 stores, compared to 840 in fiscal 2013.
Competitors perform well
Peers like Dillard’s (DDS), Kohl’s (KSS), and TJX Companies (TJX) registered strong same-store sales growth of 3%, 3.7%, and 4%, respectively, in 4Q14. Nordstrom (JWN) performed better than its mid-tier peers and posted same-store sales growth of 4.7%, driven by its off-price Rack store sales.
Update on store openings
In fiscal 2015, Macy’s plans to open a new Macy’s store in Ponce, Puerto Rico, and a Bloomingdale’s store in Honolulu, Hawaii. The company plans to close 14 Macy’s stores in early spring 2015. Macy’s is closing unprofitable stores as part of its restructuring plan.
In fiscal 2016, the company will open a Macy’s store in Kapolei, Hawaii, and also replace its existing Macy’s store in Los Angeles with a new 155,000-square-foot store on two levels. In fiscal 2017, the company anticipates opening one Macy’s and one Bloomingdale’s store in Miami, Florida, as well as a 150,000-square-foot Bloomingdale’s store in San Jose, California. The company’s international Macy’s and Bloomingdale’s stores in Abu Dhabi are slated to open in fiscal 2018. Macy’s also intends to test off-price stores similar to Nordstrom’s Rack stores and TJX’s stores.
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