Macy’s (NYSE:M) has been managing its inventory levels well compared to its peer group, according to a Wall Street Journal report. Likewise, Macy’s stock has been trending higher over the last week, gaining over 8% in the last five trading days.
The report highlighted that Macy’s inventory increased 7% year-over-year in Q2 versus the much higher levels of its peer group: 37% at Gap Inc. (NYSE:GPS), 44% at Nike (NYSE:NKE) and 48% at Kohl’s (NYSE:KSS).
Moreover, Macy’s inventory declined about 8% compared to 2019, reflecting its disciplined inventory management.
Retail giants started building inventory in anticipation of higher demand in 2022. However, high inflation and macro uncertainty played spoilsport.
Likewise, retailers like Nike are increasingly offering discounts on their offing, especially on the old inventory, as they are concerned by inflated inventory volumes as well as a visible cut in consumer spending.
On the contrary, Macy’s senior management kept a very close watch on the demand and supply scenario this year, as well as spending trends based on credit card data. It cut orders at the right time for apparel and home shopping and made necessary changes to its order book.
How High will Macy’s Stock go?
On TipRanks, Macy’s stock has an average price forecast is $23.10, which implies 31.77% upside potential. Further, the highest price target of $30 implies a 71.14% upside potential, while the lowest price target of $13 presents a downside of 25.8%.
Overall, the stock currently has a Hold consensus rating based on three Buy, six Hold, and two Sell recommendations.
Concluding Thoughts
Better inventory management versus its peers is a competitive advantage for Macy’s. Investors will get a better picture from the company’s Q3 earnings, slated to release on November 17.
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