Macy's Just Had Its Strongest Q1 in 4 Years. Here Are 3 Ways the Struggling Retailer Is Tackling Its Turnaround.
Written by Dave Kovaleski for The Motley Fool -> Macy's stock is up about 85% over the past 12 months. Berkshire Hathaway just added Macy's to its portfolio. There are a handful of reasons the stock is moving higher, including store redesigns. Malls and department stores are
There are a handful of reasons the stock is moving higher, including store redesigns.
Malls and department stores are seen by many as fading relics of the past, but don't tell that to Macy's (NYSE: M) .
The clothing retail store chain just had its best first quarter in years, and its stock price is up 85% over the past 12 months. It even caught the attention of Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) , which added its first-ever stake in Macy's in the first quarter.
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Revenue increased 2% in the quarter to $4.9 billion, while its comparable (or same-store) sales rose 3%. Macy's store comp sales were up 1.6%, but the company's Bloomingdale stores saw comp sales surge 10.2% while its beauty property, Blue Mercury, saw same-store sales jump 6.4%.
Net income rose 66% to $63 million while earnings per share increased 77% to $0.23 per share.
The retailer has now had two straight quarters of earnings growth after declining earnings for much of the previous three years. Here are three reasons why Macy's stock is headed in the right direction.
Much of the improvement stems from its Bold New Chapter initiative, launched two years ago. It focused on cutting costs by reducing the number of underperforming stores and focusing on a core group of 350 stores. That meant closing roughly 150 locations.
