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Macy's Financial Analysis

1021 Words5 Pages

Introduction
Sears Holdings Corporation and Macy’s Incorporated are parent companies of two of the most popular chains of department stores in the United States. Both have numerous store throughout the country and have expanded their services online as well. Regardless of their popularity, there are many other retails stores that offer similar products which increases the competition. Competition, competitive offers, merchandise availability and many others are some of the main concerns these companies face. Technology and increase in popularity of competitor’s store has affected Sears and lowered the stock price of the company. On the other hand, Macy’s has been struggling with maintaining continues high sales. This paper will explore these …show more content…

Both companies’ have gad a decrease in revenue in the past reported cycle. Sear’s decrease is greater and Macy’s and having a negative income is not favorable for the company either. The company had a 1% increase in cash, but is not enough for the size of the company. Macy’s revenue has been increasing the las few years, but like Sears, the cycle that ended in January 28, 2017 reflected a decrease profit. The company had a 2% decrease in Net Income. The company’s Assets and Stockholder’s Equity decreased as well. However, Macy’s is in a better financial status than …show more content…

The company was formed in connection with the March 24, 2005 Merger of these two companies. Holdings is an integrated retailer that operates a national network of stores, with 1,430 full-line and specialty retail stores in the United States, operating as Kmart and Sears (Sears Holdings Corporation. 2017). Sears Holding recorded a net loss attributable to Holdings' shareholders and $1.1 billion for 2016 and 2015, respectively. The total net loss was $887 million for 2016 and $953 million for 2015. According to management, the decrease in adjusted net loss for the year primarily reflected a decrease in selling and administrative expenses, partially offset by a decline in gross margin, which was driven by the decline in revenues and a decline in gross margin rate (Sears Holdings Corporation.

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decreased from 5.62 in 2016 to 3.59 in 2017. The company’s income decreased from 5.62 times greater than its annual interest expense to 3.59 times greater than its annual interest. It shows Macy’s can afford to pay interest plus principal with current operations. Although the numbers being greater than 1 shows Macy’s can very well afford to pay the interest plus principal, compared to the industry Macy’s is on the lower end. For example, Macy’s competitor Dillard’s time ratio for 2017 was 5.07, and Kohls was at 4.07.

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Annual Reports and Press releases The annual reports and press releases of both companies slightly differ though with a portion of similarity. Although, Home Depot’s annual report is composed at the headquarters of giving an inclusive report on all of the retail stores in the world, through the company’s website these reports posted can be found. Therefore, this being impartial and all-inclusive to an extent of analysis it would have to be done on the contrasts, similarities, profitability, and performance of different retail stores in different regions or countries. However, the shareholders and customers analyze the summary provided to know the general performance.

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Macy’s, on the other hand, thrived during its post-recession years. By taking advantage of its competitors woes. Although, its retailers have been struggling. Investors have been clamoring for Macy’s to unlock

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Furthermore, he is also listed as owning 23.7 percent of Sears (Peters, 2014). Because of Lampert’s action, this has raised some concerns whether this has been a conflict of interest. According to Sears Holdings’ Third Quarter Nov 2014 report, they had a net loss attributable to Sears Holdings’ shareholders at $5.15 loss per share compared to $ 5.03 loss per share for the previous year third quarter. Investors are bailing out because they see instability within Sear.

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