Should Macy’s, Inc. (M) Fear a J.C. Penney Company, Inc. (JCP) Revival?

The most impressive revenue stream for Nordstrom is its online segment, which has grown by leaps and bounds and now comprises 10.8% of the company’s net sales. Over the past two years, online revenue has jumped 80% from $705 million in fiscal 2011 to approximately $1.3 billion in fiscal 2013. In Macy’s latest SEC filing, revenue from its online segment is not reported separately, which probably means that it is not doing well.

With respect to lawsuits against both Martha Stewart Living Omnimedia and J.C. Penney, I think Macy’s gained more from the free publicity than it stands to lose, regardless of the final rulings.

According to the latest 10-K, the entire home/miscellaneous segment comprised only 16% of Macy’s, Inc. (NYSE:M) sales during fiscal 2013. I don’t imagine Macy’s stands to lose a great deal of customers over the matter. Besides, I doubt that a significant number of consumers are going to stop shopping at Macy’s because they can buy similar champagne flutes at J.C. Penney.

Conclusion

Even if J.C. Penney Company, Inc. (NYSE:JCP) returns to it’s normal, lackluster, performance after the ousting of Ron Johnson, the level of competition is hardly significant. Also, a perceived loss of Martha Stewart product exclusivity isn’t going to stop the Macy’s train.

Since 2009, Macy’s has steadily been growing both revenue and earnings per share. The company has steadily payed down its debts over the past several years and now boasts of a healthy balance sheet. If its share price tumbles due to perceived competition from J.C. Penney, I might start a long position in this nearly 200-year-old retailer.

The article Should Macy’s Fear a J.C. Penney Revival? originally appeared on Fool.com.

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