August 8, 2011 - Macy's, Inc. (M-NYSE), together with its subsidiaries, operates department stores and Internet Web sites in the United States, selling a range of merchandise, including men's, women's, and children's apparel and accessories, cosmetics, home furnishings, and other consumer goods.

As of May 23, 2011, Macy's operated 850 department stores in 45 states, the District of Columbia, Guam, and Puerto Rico under the names of Macy's and Bloomingdale's; and 4 Bloomingdale's Outlet stores, as well as Web sites, including macys.com and bloomingdales.com. The company was formerly known as Federated Department Stores, Inc. and changed its name to Macy's, Inc. in June 2007. Macy's, Inc. was founded in 1820 and is based in Cincinnati, Ohio.

I once bought a shirt at Macy's for one cent. It was tagged for $15 and was on sale at 50% off. But when the cashier put the tag under the scanner, it came up 1 cent. I said that can't be right, that the price was on the tag. He insisted there was nothing he could do about it. The computer said it was 1 cent. That's what he charged me. I left the store wondering if Macy's could ever make money.

I don't wonder any more. Either Macy's has fixed the computer or sales are so strong on all other correctly marked items that profits are flowing in. This company, which emerged from bankruptcy in 1992, is doing just fine, even with an economy that isn't. Though the stock price was hammered in late 2008 to $5.10 a share, it moved up nicely since then with earnings providing all the incentive investors needed for buying.

Earnings grew each year since 2008 when they were $1.29 a share (after hitting $2.18 in 2007). But then they bounced to $1.41, followed by $2.03. This year, 15 analysts have a consensus view of $2.58 a share, then see $2.93 for 2012. Next earnings report will be on August 10. Expect 49 cents a share for the second quarter, up from 35 cents last year in the second. For the third, look for 14 cents compared to 8 cents last year in the third.

Better earnings are being driven by Macy's online presence. Same store sales were up 6.1% in the first 5 months of this year. Internet sales were up 32% on a year over year comparison basis as the company improved the efficiency and ease of use of its Web site. To further help the bottom line, Macy's own brands sold well, ones like Alfani and Tasso Elba. They made up 20% of sales.

Essential numbers: Market cap is $11.06 billion. Forward P/E is 8.83. Price to book is 1.96. Book value is $13.33. Operating margin for the last 12 months was 8.08% and Profit margin was 3.77%. Return on equity was 18.32% and Return on assets was 6.23%. Total revenues were $25.32 billion. There's $1.15 billion in cash for $2.70 a share. Total debt is $7.08 billion. Total debt to equity is 124.54%. Current ratio is 1.26. In the last 52 weeks, the stock is up 32%. There are 426.77 million shares Outstanding with a Float of 426.25 million. Insiders own .13% and Institutions have 89.6% of the Float. The dividend is 40 cents a share for a yield of 1.40%. That's doulbe the payout of last year's 20 cents a share.

Macy's has come a long way since its bankruptcy. Management continues to streamline the operations, increase efficiencies and cut costs. Earnings are growing, even with a tough economic challenge. Just think what the company might do when things get better.

- Company Web site: www.macysinc.com

   Ted Allrich