VFC VF Corporation

Macy's, Inc. (M) sales managed to gather momentum in April, although severe weather disruptions had a telling effect on its sales earlier this year. The department retailer’s April sales were driven by demand for summer wear as weather began to improve in the northern climatic zones.

However, the perked up April sales were not enough, as the company posted lower-than-expected revenues for the first quarter of fiscal 2014. Apart from the harsh winter, the shift in timing of Macy’s popular Friends & Family event and tough year-over-year comparisons also added to the woes.

Total sales of this Cincinnati, OH-based company tumbled 1.7% to $6,279 million in the quarter from $6,387 million in the year-ago comparable period and also fell short of the Zacks Consensus Estimate of $6,460 million.

Comparable-store sales (comps) for the quarter declined 1.6%, while including sales generated from third party licensed departments, comps fell 0.8%.

However, effective cost management and share repurchase activity provided cushion to the bottom line. Macy’s posted first-quarter fiscal 2014 results, wherein earnings of 60 cents a share came a penny ahead of the Zacks Consensus Estimate, and rose 9% from the prior-year period.

Despite a dip in revenues, Macy’s reiterated its full year guidance as it sees the momentum picked up in April to continue in the second quarter and ahead. Management continues to anticipate comps growth of 2.5% to 3% and full-year earnings of $4.40 to $4.50 per share in fiscal 2014. The current Zacks Consensus Estimate for the fiscal year is $4.47 per share.

Currently, Macy’s holds a Zacks Rank #3 (Hold).

Other Stocks to Consider

Other well performing stocks in the retail sector include Hanesbrands Inc. (HBI), V.F. Corp. (VFC) and Columbia Sportswear Co. (COLM) all sporting a Zacks Rank #2 (Buy).
 

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