group 7 macy, nordstrom and kohl

Group 7

Nordstrom- Ashley

Kohl’s- Eduardo

Macy’s-Hewitt

Industry Overview

Department Store Department store chains offering multiple lines of products…

4 trendsSimplicity

Transparency

Social Media

Customer Service

𝑆𝑎𝑙𝑒𝑠𝐺𝑟𝑜𝑠𝑠 𝑠𝑞𝑎𝑟𝑒 𝑓𝑜𝑜𝑡𝑎𝑔𝑒

𝑆𝑎𝑙𝑒𝑠𝑇𝑜𝑡𝑎𝑙𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠

Nordstrom

10.35 billions in market capitalization

61000 employees

242 stores in 31 states

Apparel, Cosmetic, Shoes, Accessories

Retail and Credit are two main business segments

Affordable luxury is target market

25,290,000 square foot

Macy’s19.25 billions in market capitalization

171,000 employees

840 Stores in 45 states, 50% are wholly owned

Apparel, Cosmetic, Shoes, Accessories, Home and Miscellaneous

FDS Bank Credit Service, Merchandise Group, IT & Logistics are subsidiaries

Macy’s and Bloomingdale’s brand focus on mid-tier market and upper-tier market, respectively


Kohl’s

11.6 billions in market capitalization

81,000 employees equivalent

1,127 stores

Apparel, Cosmetic, Shoes, Accessories, Home and Miscellaneous

Discount Store


Income Statementin millions Kohl's

Net Sales as Base 2011 2010 2009 2011 2010 2009 2011 2010 2009

Net sales 100% 100% 100% 100% 100% 100% 100% 100% 100%

COGS 60.6% 60.8% 61.8% 59.6% 59.3% 59.5% 61.8% 61.8% 62.2%

Gross Margin 39.4% 39.2% 38.2% 40.4% 40.7% 40.5% 38.2% 38.2% 37.8%

GSA Expense 27.9% 27.7% 28.6% 31.4% 33.0% 34.3% 26.7% 26.9% 27.0%0.0% 0.0% 0.0% 0.1% -0.1% -1.7% 0.0% 0.0% 0.0%

EBIT 11.5% 11.5% 9.7% 9.1% 7.6% 4.5% 11.5% 11.4% 10.8%

Interest expense, net 1.2% 1.3% 1.6% 1.7% 2.3% 2.4% 1.6% 1.7% 1.8%

EBT 10.3% 10.2% 8.1% 7.5% 5.3% 2.2% 9.9% 9.7% 9.1%

Income tax expense 4.0% 3.9% 3.0% 2.7% 1.9% 0.8% 3.7% 3.6% 3.4%

Net earnings 6.3% 6.3% 5.1% 4.8% 3.4% 1.4% 6.2% 6.1% 5.7%

Nordstrom Macy

Balance SheetsASSETS: 2011 2010 2009 2011 2010 2009 2011 2010 2009Current assets:Cash and cash equivalents 22.1% 20.2% 12.1% 12.8% 7.1% 7.9% 8.5% 15.3% 17.2%Accounts receivable, net 23.9% 27.2% 30.9% 1.7% 1.9% 1.7% 0.0% 0.0% 0.0%Merchandise inventories 13.5% 13.1% 13.6% 23.4% 23.1% 21.7% 22.7% 20.4% 22.2%Current deferred tax assets, net 2.6% 3.2% 3.6% 0.0% 0.0% 0.0% 0.5% 0.5% 0.6%Prepaid expenses and other 3.3% 1.1% 1.3% 2.1% 1.4% 1.0% 2.1% 1.7% 1.7%Total current assets 65.5% 64.6% 61.6% 39.9% 33.4% 32.3% 33.9% 38.0% 41.7%Land, buildings and equipment, net 29.1% 31.1% 34.1% 38.0% 42.7% 44.6% 63.2% 58.5% 53.3%Goodwill 2.1% 0.7% 0.8% 16.9% 18.1% 17.6% 2.9% 3.5% 5.0%Other assets(add prepaid exp and deferred tax asset) 3.4% 3.6% 3.5% 5.2% 5.7% 5.5% 0.0% 0.0% 0.0%Total assets 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Nordstrom Macy's Kohl's

Balance Sheet cont.Current liabilities:Accounts payable 10.8% 11.3% 11.0% 7.2% 6.9% 6.2% 8.7% 7.7% 9.0%Accrued salaries, wages and related benefits (accrued liability) 4.6% 5.0% 5.1% 3.5% 2.9% 1.3% 8.0% 6.9% 7.6%Other current liabilities 15.0% 8.8% 14.5% 17.6% 14.4% 13.5% 1.6% 4.1% 1.5%Total current liabilities 30.3% 25.2% 30.6% 28.3% 24.2% 20.9% 18.4% 18.7% 18.2%Long-term debt, net 37.0% 37.2% 34.3% 30.0% 33.8% 39.7% 15.2% 10.1% 15.6%Other liabilities (add deferred prop incentives) 9.6% 10.5% 11.2% 14.9% 15.2% 17.5% 20.3% 18.3% 6.6%Total noncurrent liability 46.6% 47.7% 45.5% 45.0% 49.0% 57.2% 35.4% 28.4% 22.2%Total liability 77.0% 72.9% 76.1% 73.2% 73.2% 78.2% 53.8% 47.1% 40.3%Shareholders’ equity:Common stock& APIC 17.5% 15.7% 16.2% 24.4% 27.6% 26.7% 16.6% 15.0% 15.9%Retained earnings 6.1% 11.8% 8.0% 18.1% 14.5% 10.5% 72.3% 62.6% 64.1%Treasury Stock 0.0% 0.0% 0.0% -11.0% -11.8% -11.8% -42.4% -24.5% -20.1%Accumulated other comprehensive loss -0.5% -0.4% -0.3% -4.8% -3.5% -3.5% -0.4% -0.2% -0.3%Total shareholders’ equity 23.0% 27.1% 23.9% 26.8% 26.8% 21.8% 46.2% 52.9% 59.7%Total liabilities and shareholders’ equity 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Nordstrom Macy's Kohl's

Liquidity

2009 2010 20110

1

2

3

4

5

6

NordstromMacy'sKohl's

2009 2010 20110

0.5

1

1.5

2

2.5

3

Nordstrom

Macy's

Kohl's

2009 2010 20110

0.5

1

1.5

2

2.5


Inventory Turnover

Current Ratio

Quick Ratio

Long-term Debt Paying

2009 2010 201102468

1012


2009 2010 20110

0.51

1.52

2.53

3.54

NordstromMacy's Kohl's

2009 2010 20110

0.10.20.30.40.50.60.70.80.9


Times Interest Earned

Debt to Equity

Debt Ratio

Profitability

2009 2010 20110.36

0.37

0.38

0.39

0.4

0.41

0.42

NordstromMacy's Kohl's

2009 2010 20110

0.01

0.02

0.03

0.04

0.05

0.06

0.07


2009 2010 20110

0.05

0.1

0.15

0.2

0.25


Gross Profit Margin

Net Profit Margin

Return on Investment

Investor Analysis

2009 2010 20110

100

200

300

400

500

Nordstrom

Macy's

Kohl's

2009 2010 2011 -

50,000

100,000

150,000

200,000

250,000


Revenue per square feet

Revenue per employee

Investor Analysis

2009 2010 201102468

1012141618


2009 2010 201102468

101214161820


Market Cap(In billions)

Price/Earnings

Recommendation Rationale

Net profit Margin

Gross Margin

Inventory Turnover

Current Ratio

Acid Test

Debt Ratio

P/E

Revenues per sqr ft

Rev per employees

Sales growth rate

2 3 1

1 2 3

1 3 2

1 3 2

1 3 2

3 2 1

1 3 2

1 3 2

1 2 3

1 2 3

Nordstrom Macy’s Kohl’s Ranking3

2

1

1

1

3

3

2

2

1

28 49 37

Post PeriodNordstrom Macy's Kohl's

Inventory Turnover 5.93 3.17 3.54Current Ratio 2.28 1.55 1.86Acid Test 1.53 0.43 0.21Times Interest Earned 8.41 6.26 NEDebt Ratio 0.76 0.71 0.56Gross margin 38.82 40.26 36.25Net Profit Margin 6.24 4.82 5.1Return on Assets 8.72 6.1 6.93Market Cap(in billions) 12.23 19.22 11.72

group 7 macy, nordstrom and kohl

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