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What Is Macy's Improving Financial Performance

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The Company had its fifth consecutive year of improved financial performance in 2014 and attained its long-term profitability target. These improvements have been driven by successful implementation of the Company's key strategies (AR 2014). Macy’s current financial position was accessed by a review of their performance activity from 2010 to 2014. The results of this analysis indicated that Macy’s is the strongest competitor in the retail industry. Macy’s Activity Ratios in comparison to Target and Kohl’s reflect that Macy’s surpasses its competitors in profitability and efficiency. Liquidity is not as strong in comparison to profitability and efficiency ratios; however Macy’s is showing progression by increasing net income and decreasing …show more content…

ROA increased to 6.99 compared to the previous year’s ROA of 6.10, due to annual net income growth of 1,526 million. Macy’s Return on Equity (ROE) in (FY 2014) improved to 24.23 compared to the previous year, due to net income growth. Macy’s overall profitability is higher than their competitors Dillard’s, Kohl’s, and Target. Macy’s gross margin is 3.24 higher than the next leading competitor. The company’s ROE is 7.85 higher than Dillard’s and with the ability to increase ROE gives Macy’s an advantage over competitors in the retail market because they are able to consistently reward …show more content…

The operating gross profit margin increases yearly which results in higher profitability for the company. To increase gross profit margin, Macy’s needs to manage their cost of goods sold while continuing to increase yearly sales. Net income for 2014 increased compared to 2013, reflecting the benefits of the key strategies at Macy's as well as lower retirement expenses, higher income from credit operations and gains on the sale of certain store locations and surplus properties, partially offset by greater investments in the Company's Omnichannel operations and higher depreciation and amortization expense. Net sales for 2014 increased $174 million or 0.6% compared to 2013. The increase in comparable sales on an owned basis for 2014 was 0.7% compared to 2013. Cost of sales for 2014 increased $138 million from 2013. The cost of sales rate as a percent to net sales of 60.0% was higher in 2014, as compared to 59.9% in 2013, primarily due to continued growth of the Omnichannel businesses and the resulting impact of free

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This is especially because it is facing increased competition from Kohl’s Corp. and Macy Inc who have excellent marketing strategy. For example, Kohl’s give good deals and coupons as a way of attracting customers. On the other hand Macy markets its store around its celebrity

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