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Morningstar’s Analysis

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Economic Moat

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Capital Allocation

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No-Moat Macy’s Outperformed Low Expectations in Q4; Shares Slightly Undervalued

David Swartz Equity Analyst

Analyst Note

| David Swartz |

No-moat Macy’s reported a same-store sales decline of 17% in the fourth quarter of 2020, slightly outpacing our forecast of a 21% drop. We expect to increase our per share fair value estimate of $16.30 by a mid-single-digit percentage and view shares as slightly undervalued.

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Company Profile

Business Description

Founded in 1858, Macy’s operates nearly 600 stores under the Macy’s brand, 55 stores under the Bloomingdale’s brand, and about 162 freestanding Bluemercury specialty beauty stores. Macy’s also operates e-commerce sites, owns 65% of a Chinese e-commerce joint venture, and licenses two Bloomingdale’s stores in the United Arab Emirates and Kuwait. Women’s apparel, accessories, shoes, cosmetics, and fragrances constituted 58% of Macy’s 2020 sales. The retailer recently consolidated its headquarters in New York City.

Contact
151 West 34th Street
New York, NY, 10001
T +1 513 579-7780
Sector Consumer Cyclical
Industry Department Stores
Most Recent Earnings Jan 31, 2021
Fiscal Year End Jan 29, 2022
Stock Type Distressed
Employees 75,711

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