2023-03-29 07:41:01 ET
Gordon Haskett downgraded Macy's ( NYSE: M ) to Hold-Rated from Accumulate-Rated on Wednesday.
Analyst Chuck Grom and team commended Macy's ( M ) management team, particularly CEO Jeff Gennette and CFO Adrian Mitchell, for delivering on many company-specific initiatives and doing an excellent job controlling inventory levels - but reminded that no company is immune to the macro pressures that are building. The firm also sees concerning data trends on Macy's ( M ) for the short to medium-term that override the favorable view on the department store operator for the long-term.
"Our data reads through this past Saturday (March 25th) have shown (1) moderating foot traffic trends at Macy's and across the entire department store complex in recent months after some improvement in the December/January timeframe; and (2) moderating digital visits (37.0% e-commerce penetration as of 4Q22), which until March showed positive growth this year versus 2019. Indeed, our data supports government statistics which in February showed similar trends, with department store retail sales decelerating 410 basis points on a 4-year geo-stack."
When combined with evidence affluent consumers are becoming more cautious due to declining asset prices and the recent turmoil in the financial markets, the firm's conclusion is that 2023 same-store sales estimates on Macy's ( M ) may be too high.
Gordon Haskett assigned a price target on Macy's ( M ) of $18.
Shares of Macy's ( MO ) fell 2.14% in premarket action on Wednesday to $16.90.
Earlier on Wednesday, Macy’s ( M ) CEO Jeff Gennette announced his intention to retire by early 2024.
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Macy's is downgraded at Gordon Haskett due to slowing traffic trends