Facing high inflation, the Zacks Retail and Wholesale sector has struggled in 2022, down more than 20% and lagging behind the general market by a notable margin.
A titan in the realm, Macy’s, Inc. M, is on deck to unveil quarterly earnings on November 17th, before the market open.
Macy’s is an omnichannel retail organization with a wide range of merchandise, including men’s, women’s, and children’s apparel and accessories, cosmetics, home furnishings, and other consumer goods.
Currently, the retail titan carries a Zacks Rank #3 (Hold) paired with an overall VGM Score of an A. How does everything else stack up?
Let’s take a closer look.
Share Performance & Valuation
Year-to-date, Macy’s shares are down roughly 18%, lagging behind the general market’s performance modestly.
Image Source: Zacks Investment Research
However, over the last month, the story has changed dramatically; M shares are up more than 14%, outperforming the S&P 500 by a notable margin.
Image Source: Zacks Investment Research
The company’s forward price-to-sales ratio currently sits at a small 0.2X, well below 0.5X highs in 2021 and representing a steep 81% discount relative to the Zacks Retail and Wholesale sector average of 1.2X.
Macy’s sports a Style Score of an A for Value.
Image Source: Zacks Investment Research
Quarterly Estimates
A singular analyst has upped their earnings outlook over the last several months, with the Zacks Consensus EPS Estimate of $0.19 indicating an 85% Y/Y drop in quarterly earnings.
Image Source: Zacks Investment Research
M’s top-line also appears to be undergoing some turbulence; the Zacks Consensus Sales Estimate of $5.2 billion suggests roughly a 4.8% decrease in revenue from year-ago sales of $5.4 billion.
Quarterly Performance
Macy’s earnings track record is more than impressive – the company has exceeded earnings and revenue estimates in eleven consecutive quarters.
Just in its latest release, the retailer penciled in a sizable 17.6% EPS beat paired with a 2% sales surprise. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Putting Everything Together
M shares have witnessed adverse price action year-to-date but have outperformed the general market by a fair margin over the last month, indicating that buyers have stepped up.
The company’s forward price-to-sales ratio is on the lower end of the spectrum, representing a sizable discount relative to the Zacks Retail and Wholesale sector average.
One analyst has upped their earnings outlook as of late, with estimates suggesting Y/Y decreases in revenue and earnings.
The company has been the definition of consistency within its quarterly results, regularly exceeding estimates.
Heading into the release, Macy’s Inc. M carries a Zacks Rank #3 (Hold) paired with an Earnings ESP Score of 19%.
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