Macy’s: Positioned To Outperform With Compelling Margin Of Safety (M)

Drew Angerer

Intro

Because of recession fears and industry-wide declining monetary efficiency, Macy’s (NYSE:M) share value has fluctuated over the previous yr. In reality, traders have seen Macy’s inventory hit 52 week lows this previous month.

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When

Firm Macy’s Nordstrom (JWN) Kohl’s (KSS)
Internet Gross sales

$24.4B (up 0% y/y)

2023 steering of low single-digit decline

$15.1B (up 5% y/y)

2023 steering of 4% to six% decline

$18.1B (down 6.7% y/y)

2023 steering of two% to 4% decline

Gross Margin

37.4%(2022)

38.9% (2021)

(-150 bps)

33.6% (2022)

35.1% (2021)

(-150 bps)

33.2% (2022)

38.05% (2021)

(-475 bps)

TTM Adjusted EBITDA Margin

$2.648B (10.8%)

-280bps y/y

$1.034B (6.8%)

-40bps y/y

$246M (1.4%)

-729bps y/y

2022 CFO & Capex

$1,615M (CFO)

$888M (Capex)

2023 Capex steering of approx. $1B

$946M (CFO)

$473M (Capex)

2023 Capex steering of $430M to $574M

$282M (CFO)

$826M (Capex)

2023 Capex steering of $600M to $650M

Digital Gross sales as % of Complete Gross sales 34% down from 40% in 2021 38% down from 42% in 2021 32% down from 39% in 2021
LT Debt and Earliest Important Maturity Dates

$3B in LT Debt

($105M due 2028)

($500M due 2029)

($425M due 2030)

$2.86B in LT Debt

($250M due April 2024)

($349M due 2027)

($300M due 2028)

$1.912B in Complete Debt

($164M and $111M due 2023)

($113M and $353M due 2025)

TTM Dil. EPS and TTM P/E

$4.19 (FY22)

3.6 TTM P/E

$1.51 (FY22)

10x TTM P/E

-$0.15 (FY22)

N/A

FWD Dil. EPS Estimate and FWD P/E

$3.75 (FY23)

FWD P/E of ~4x

$1.89 estimate

FWD P/E of ~8x

$2.32

FWD P/E of ~9x

Stock Turnover Down 3% y/y Down 15% y/y Up 4% y/y

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Macy's Forward PE Ratio

Macy’s Earlier Ahead PE Ratios (GuruFocus)

Macy's potential upside

Macy’s ROI (based mostly on EPS steering and historic PE multiples) (Writer)

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