Macy's Delivers More Good News Than a Missionary
It would be hard to imagine a better start to Macy's 2014 without including unicorns or at least a lobster buffet in the vision. The company resolved part of its dispute with Martha Stewart Living Omnimedia and J.C. Penney , announced an excellent holiday season, and put a cost-saving program in place that the market fell in love with. Year to date -- that's just a handful of trading days -- the stock is already up 6%.
The Martha Stewart debacle
The year started out with an end to part of the long-standing dispute between Macy's and J.C. Penney about the Martha Stewart brand. Macy's signed an agreement with Stewart's company back in 2006, but things fell apart when Stewart also signed up with J.C. Penney.
All three companies went to court, but Martha Stewart's brand decided that ending up on J.C. Penney's side was ending up on the losing side. As such, it settled with Macy's and the two companies will continue to work together. That doesn't affect the lawsuit against J.C. Penney, which will continue into 2014.
Solid sales for Macy's
Macy's also announced the preliminary results from its holiday season; as comparable sales were up 3.6% over the November-December period in 2012. That was solid growth for a season that was reportedly promotion-heavy, and in which many companies were happy to see an overall revenue increase at all.
If Macy's can keep up the pace in 2014, then it should be an excellent year for the brand. According to the newest forecast, released with the sales update, 2014 should see comparable sales increase in the 2.5% to 3% range, which would keep it near the top of the department store chains, where it landed in 2013.
Macy's cost-cutting program
The final boost for Macy's this year was its announcement of a restructuring and store closures. The main bit of restructuring will see the company's Midwest and North regions combined. The company is also going to "trim" expenses, which is going to result in laying off 2,500 employees. Macy's is also going to be closing five stores in early 2014 in areas across the U.S.
The business hopes that this helps it maintain a strong level of profitability going into 2014. The one thing that investors may be on the lookout for is an increase in tensions between employees and the business, which experienced a small backlash over the holidays when it announced Thanksgiving opening hours. While it's unlikely to make an impact, these sorts of changes have a way of accruing in employee consciousness and building into potential problems. Other than that, Macy's is looking well set for a strong 2014.
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The article Macy's Delivers More Good News Than a Missionary originally appeared on Fool.com.
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