-->M down 10% at 5 month low just above the 32 level premarket.
Macy's: Color on guidance cut
- Deutsche Bank downgrades to Hold
- TAG lowers tgt to $38 from $42. While all of these incremental initiatives are encouraging, comparable store sales are now expected to decline for the third year in a row, as the co is now planning 2017 to be relatively consistent with the November/December trend. Collectively, they believe these factors create low visibility on the trajectory of earnings, especially given the uncertainty around the timing and ultimate impact of real estate activities.
- RBC Capital Mkts lowers their M tgt to $35 from $43. M's holiday update is particularly disappointing, as easier Q4 compares with opportunity to return to topline momentum and significant margin recapture were the reason to own the department store group, despite the secular bear case. Although M's ongoing real estate and cost rationalization initiatives provide some downside support, they are now more concerned about its core business (FY17 guidance suggest no improvement).
- Stifel believes that the pattern of strong sales during highly promotional holiday periods (Thanksgiving week and Christmas week) offset by weakness during the interim period was particularly strong this year, as customers shopped smart, which contributed to margin pressure. Also pressuring results are the trends that they have been observing for the past year, including a shift in spending away from apparel due to priorities changing and demographics shifting as well as the cannibalization of e-commerce; $39 tgt.
- Goldman tgt to $39 from $44
- Jefferies tgt to $35 from $40
- Dept store peers: KSS -15% (also warned), JWN -7%, DDS -4%, JCP -1.5%