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How Macy’s is bucking the retail sector’s woes this holiday season

Yahoo Finance's Brian Sozzi discusses what Macy's is doing right this holiday season.

Video transcript

[AUDIO LOGO]

JULIE HYMAN: The biggest weekend in retail officially comes to a close today. Is it still the biggest weekend retail? And of course, Brian Sozzi was paying close attention to everything from sales to the parade.

[MUSIC PLAYING]

And that's where we find his take today. You're finding help in one specific, much maligned retailer.

BRIAN SOZZI: Well, that's me.

JULIE HYMAN: Formally maligned.

BRIAN SOZZI: I find inspiration everywhere. And today on our site-- and this story is shooting up the Yahoo Finance homepage now in our "Morning Brief" newsletter. Looking at Macy's.

And I was really inspired to see Paula Abdul at the Macy's Thanksgiving Day parade. I think she crushed it and so did Mariah Carey at the end. Absolutely, crushed it. That's our lead photo on this.

And that really sent me back to looking at Macy's, a company that I've been super, super critical of the past really three years. They were slow to close stores. The inventory looked absolutely terrible. You couldn't find an associate in this stores to ask basic questions, such as like opening up a fitting room.

But going back and looking at the fundamentals of Macy's, you know, I have to tip my hat to them and give some credit where credit is due. You know, the stock pretty much this year has outperformed the S&P 500 basically, I would say, for 75% of the year. That is a good indication, I think, that you're doing something right.

Next, inventory levels at Macy's are some of the healthiest among rival department stores. And that really reflects, I think, management and CEO Jeff Jennette-- Gennette, drilling down on what should be in these stores, what should not be in the stores. And I think Macy's has been more inclined to stock less in stores just to keep the margins coming into the business and not being under a lot of pressure like they had been.

Same-store sales outperforming rival department stores such as Kohl's. Kohl's is having a horrible year. Now, Macy's sales are still under pressure but, again, relatively outperforming Kohl's in some of its other competitors in the mall.

And then lastly, too, one that has not got talked about enough is Bloomingdale's. Bloomingdale's sales in the most recent quarter were positive, which looks very good compared to the likes of Nordstrom, which shore-- which saw negative same-store sales in its most recent quarter.

Now, people that I've talked to relate for Macy's for this story, point to a couple of factors driving this performance for the company. One, they've gained a lot of market share from JCPenney. I appreciate what Mark Rosen told us a week ago on the JCPenney turnaround. But still, JCPenney has closed hundreds of stores. And finally, it looks like that traffic has been shifting to the likes of Macy's.

Secondarily, experts also point to weakness at Nordstrom just getting their assortment right. And those shoppers have, believe it or not, went from Nordstrom over to Macy's. So that has been a theme within all of this.

My take for Macy's here for this particular story, everyone has it within themselves to change. That is me and that is also Macy's, too. I think they deserve a little bit of credit here for their year that has been this year a pretty good year considering how pressured the consumer has been. That is me, I'm guessing-- I'm guessing at the Thanksgiving Day Macy's Parade. Channeling my inner Mariah. My inner Mariah Carey.

BRAD SMITH: But with the green hair. The green hair Sozz is sticking around.

BRIAN SOZZI: Oh, it is the Grinch. Wow. No, it's not the Grinch. Come on, Macy's had a pretty good year. They're not the Grinch.

BRAD SMITH: Yeah. [LAUGHS] So here's the interesting thing, though, too, on the inventory side, there's still so many of the retailers that are still trying to muddle through or trying to figure out how they can-- where the consumer in the direct to consumer environment, where you've got some of those brands that have decided we're gonna pull back some of the inventory as well. And we're not gonna sell in through you at the same scale that we used to be.

BRIAN SOZZI: Well, Macy's is at the point now it'd be really sad to see vendors not selling in Macy's. I think they've closed a lot of just terrible stores. And they are operating really, in some of the top A and B malls in this country. And just, you know, really quick go back to that Grinch photo. I'm being told that my heart has grown for Macy's this year, hence that Grinch photo right there.

JULIE HYMAN: How many sizes did it grow that day, the Grinch-- the Grinch's heart?

BRIAN SOZZI: Three sizes?

JULIE HYMAN: Three sizes, I think that's right.

BRIAN SOZZI: Oh, it's part of the movie?

JULIE HYMAN: Yeah.

BRIAN SOZZI: I don't remember.

JULIE HYMAN: Yeah.

BRIAN SOZZI: Oh.

BRAD SMITH: Maybe 10.

JULIE HYMAN: Maybe 10. I can't remember.

BRAD SMITH: Somewhere between 3 and 10.

JULIE HYMAN: We're gonna look it up and get back to you.

BRAD SMITH: 3X, 10.

BRIAN SOZZI: I still don't like Kohl's, though. Sorry.