Coming off a disappointing holiday season, Deutsche Bank is throwing in the towel, shoes and handbags on Macy’s
Inc. (NYSE: M). At time of writing, shares were
plummeting over 14 percent on Thursday.
Macy’s announced it would be closing 68 stores and
cutting over 10,000 jobs following a weak showing during the holidays. Same-store sales came in at -2.1 percent.
Analyst Commentary
Commenting on the figures, Deutsche Bank expressed surprise that Macy’s CEO Terry Lundgren guided
2017 comp as in line with holiday results.
“In our view, this discouraging 2017 forecast reflects the realities of market share losses to off-price retail and other online
threats with the pace of store rationalization and monetization just not fast enough,” said Deutsche Bank.
Improvements by off-price retailers TJX Companies Inc (NYSE: TJX) and Ross Stores, Inc. (NASDAQ: ROST), combined with e-commerce growth, have been cannibalizing old-fashion
department stores Macy’s, J C Penney Company Inc (NYSE: JCP) and Sears Holdings Corp (NASDAQ: SHLD), which just announced it would be closing 150 stores as well and
selling the Craftsman tool brand for $900 million.
Deutsche Bank noted that while management did have some good performance in streamlining operations and reducing expenses, core
earnings ex-real estate were declining at “an alarming pace.”
The German bank lowered its price target to $34 from $47 and downgraded the company to a Hold from a Buy.
Latest Ratings for M
Date |
Firm |
Action |
From |
To |
Jan 2017 |
Deutsche Bank |
Downgrades |
Buy |
Hold |
Nov 2016 |
OTR Global |
Upgrades |
Negative |
Mixed |
Oct 2016 |
Deutsche Bank |
Upgrades |
Hold |
Buy |
View More Analyst Ratings for
M
View the Latest Analyst Ratings
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