Macy’s was purchased by Bristol Gate’s US Equity Fund in November 2012 and it was sold after the first quarter earnings report in May 2015.
The table below summarizes Macy’s financial results over the last five years. Sales growth has been declining every year since 2011. Macy’s first quarter conference call in 2015 highlighted uncertain sales projections. The dividend growth rate, already declining, was questioned.
| (in Millions) | 2010 | 2011 | 2012 | 2013 | 2014 |
| Sales | 25,003 | 26,405 | 27,686 | 27,931 | 28,105 |
| Sales Growth | 0.5% | 5.6% | 4.8% | 0.9% | 0.6% |
| Operating Profit | 1,894 | 2,411 | 2,661 | 2,678 | 2,800 |
| Cash from Operations | 1,750 | 1,506 | 2,093 | 2,261 | 2,549 |
| Cash Flow from Operations as a % of Operating Profit | 92% | 62% | 79% | 84% | 91% |
| Dividend | 0.20 | 0.30 | 0.70 | 0.90 | 1.12 |
| Dividend Growth | -29.2% | 50.0% | 133.3% | 28.6% | 24.4% |
| EPS (basic) | 2.00 | 2.96 | 3.29 | 3.93 | 4.30 |
| Shares Outstanding (basic) | 423.3 | 424.5 | 405.5 | 378.3 | 355.2 |
| LT Debt/Equity | 126% | 112% | 112% | 107% | 135% |
Analysis of the last several quarters conveys Macy’s financial struggles. Operating profit declined in the first two quarters of 2015 and same stores sales metrics have been negative in four of the last six quarters.
| (in Millions) | 1Q14 | 2Q14 | 3Q14 | 4Q14 | 1Q15 | 2Q15 |
| Sales | 6,279 | 6,267 | 6,195 | 9,360 | 6,230 | 6,100 |
| Operating Profit | 443 | 571 | 422 | 1,364 | 409 | 258 |
| Operating Profit Compared to 1 Year Prior | 1.8% | 6.9% | 17.2% | 1.1% | -7.7% | -54.8% |
| Cash Flow from Operations | 86 | 560 | 777 | 2,709 | 53 | 345 |
| Same Store Sales | -1.6% | 3.4% | -1.4% | 2.00% | -0.7% | -2.1% |
Macy’s first quarter conference call highlighted a number of new sales growth initiatives. These initiatives came across as experimental in nature. Our uneasiness regarding the company’s future growth culminated in the sale of the stock.
