Everyone loves a turnaround story, and a compelling one can be found at Macy's Inc (NYSE: M), according to CNBC's Jim Cramer.
What Happened
Macy's delivered an earnings beat in its fourth-quarter
results and a slight sales miss, but comps rose 1.3 percent and management offered a "terrific outlook," Cramer said during his
daily "Mad Money"
show Tuesday. Macy's "believers" were rewarded with a more than 3-percent gain in the stock, although investors who bought
shares below $20 are sitting on a much better profit.
Macy's new CEO Jeff
Gennette is "a bit of a miracle worker," Cramer said. The executive succeeded in remodeling the retailer — accomoodating
regular spenders with platinum-level Star Rewards, and customers who turned to off-price retailers now have Macy's Backstage, the
CNBC host said.
Why It's Important
The most important question surrounding Macy's recent momentum could be whether it's sustainable. Cramer said he certainly
thinks so based on sales of dresses, coats, jewelry, men's tailored clothing, children's shoes and handbags all coming in better
than expected.
"Shop there as I have, embrace it, and you'll see exactly what I mean," the "Mad Money" host said. "The bears blinded themselves
to all of the positives here in the pursuit of a home-run short, and instead it turned out to be a home-run long."
What's Next?
Gennette is an executive who "knows fashion," but also "cares passionately" about fixing Macy's "darned" balance sheet, Cramer
said. The department store chain continues to pay down its debt through the sale of properties and closure of underperforming
stores.
Macy's outlook has greatly improved across multiple metrics, including gross margins and sales, Cramers said.
Related Links:
Macy's Updates
Comp Sales And Store Closures, Raises 2017 EPS Outlook
Macy's
And Kohl's Earn Free Pass In Q3, But Need To Gives Consumers Reason To Shop In Q4
Photo from Wikimedia.
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