Genesco Inc. (GCO): How Macy’s, Inc. (M) Can Help This Smaller Retailer Profit

Finish Line Inc (NASDAQ:FINL) shares are up 18.6% in the calendar year. The chain is seeing a new audience of women through its Macy’s, Inc. (NYSE:M) partnership. The company’s shares should be bought on weakness because the chain will likely take market share away from Foot Locker and grow its sales. Analysts are expecting double-digit sales growth of 13.6% and 10.8% in fiscal 2014 and fiscal 2015, respectively.

Winning strategy

Macy’s, Inc. (NYSE:M) continues to have success with its retail strategy. In the second quarter, earnings per share increased 7.5% to $0.72. Total sales declined 0.8% to $6.1 billion. Shares of Macy’s have increased 20.9% on the calendar year. This comes on the back of a strong first quarter and poor second quarter.

Macy’s, Inc. (NYSE:M) is completing a turnaround and introducing its store-within-a-store concept to boost sales across its locations. Shares continue to look attractive, as other retailers like J.C. Penney Company, Inc. (NYSE:JCP) struggle. Macy’s has a winning concept and should be bought on weaknesses.

Conclusion

Shares of Genesco Inc. (NYSE:GCO) are up 29% on the year. This seems surprising despite declining sales across several of the company’s business segments. This partnership with Macy’s, Inc. (NYSE:M) has the potential to transform the company’s Lids division and boost sales. Analysts see sales growing 4.8% and 8% in the next two fiscal years, respectively. With the Macy’s partnership, Genesco may be able to pull double-digit sales gains. Genesco is a winning retail play for investors.

 The article How Macy’s Can Help This Smaller Retailer Profit originally appeared on Fool.com and is written by Chris Katje.

Chris Katje has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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