Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Nordstrom, Inc. (JWN), Macy’s, Inc. (M): GMROI and the Department Stores

J.C. Penney had the lowest GMROI out of the group, although this isn’t surprising. Right now, investors wonder whether Mike Ullman can get this department store back on track. GMROI offers one way to answer this question. If J.C. Penney can get better control over its inventory and improve its margins, this department store’s GMROI will trend upward. This metric could also indicate a turnaround before J.C. Penney achieves a profitable quarter, although a successful turnaround still remains in doubt with this store.


GMROI might not provide enough information to make an investment decision by itself. This metric does help illustrate the department stores’ strengths and weaknesses, though. Nordstrom could be stronger than its recent results suggest. Although this department store had an underwhelming quarter, the GMROI shows that it still has decent pricing power and reasonable inventory turnover. This upscale retailer still looks like it could beat the market.

The article GMROI and the Department Stores originally appeared on and is written by Eric Novinson.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.