This analysis compares a portion of the balance sheets for these retailers: Macy's (M), Sears (SHLD), Wal-Mart (WMT) and JC Penney (JCP). I’ve also included a word about the circumstances of Eddie Bauer (EBHI) compared to Macy's.
Based on these numbers, Macy's ratio of debt to revenue looks out of proportion compared to its competitors:
- Macy's: .35 (8.85B/25B)
- Sears: .07
- Wal-Mart: .10
- JC Penney: .19
In other words, Macy's has almost twice the comparable debt load of JCP and five times the debt load of Sears.
Yes, this debt load difference is reflected in the relative prices of the stock of the companies but the recent Chapter 11 filing of Eddie Bauer (EBHI) brings the Macy’s debt into question.
At the time of filing, EBHI reported 1B in revenue with 222M in debt and 206M in cash. This is a debt/revenue ratio of .22, considerably less than the Macy's number. While JCP may at first glance look weak, consider its 2.14B of cash.
Finally, earnings/share for the industry is -1 dollar. Macy's earnings/share is -11
Disclosure: I do not have a position in any of the stocks mentioned in this analysis.
