Macy's Pullback Means Opportunity

The holiday season is upon us and many retailers, such as Walmart (WT) and JC Penney (JCP), are trying to get a jump on it. However, they are not alone. With the concerns of inflation and gas prices on the move upwards once again, retailers are trying to reel in the consumer before they start clicking the checkout button with their mouse.

The reality is that the Internet has made it so much easier for consumers to shop, and believe it or not rising gas prices are a deterrent to a consumer actually getting in their car to buy little Jimmy the latest Sony Playstation video game when it's just a click away.

So today, one retailer that I actually like more since they shifted the focus from Federated Department Stores to plain old Macy's (M), is announcing their earnings. Since July the stock has fallen from a high of over $43 to a low in the $28 range. It's been choppy trading since the summer but every time the stock slipped it just dropped a pinch lower before bouncing back up.

The Street is looking for an EPS of 7 cents per share but I think that even if they hit the mark we may see it drop down into the low $29 range; if they miss then we may see it in the low to mid $28 range. I wish this wasn't my outlook as I am really hoping that Macy's proves me wrong but based on what retail is looking like nowadays I think that this is what they will be facing today.

Long term this is truly a $45 stock so a pullback may just present a nice opportunity for investors.

Disclosure: none