Macy’s Inc

Macy's Inc. raised its fiscal 2026 net sales outlook to $21.5-$21.75 billion from $21.4-$21.65 billion, while comparable sales guidance increased to 0.5-1.2% from a decline of 0.5% to growth of 0.5%. The adjusted EPS guidance rose to $2-$2.20 from $1.90-$2.10. The company is gaining momentum in its luxury business as part of its Bold New Chapter strategy, with Bloomingdale's and Bluemercury emerging as important contributors to growth plans. Bloomingdale's is expanding its luxury assortment with brands like Chloe Ready-to-Wear, Isabel Marant, Phoebe Philo, Park Denim, Aireloom and Kate Shoes, while Bluemercury is benefiting from demand across makeup, dermatological skin care and fragrances, with brands such as Byredo, Parfums de Marly, Dr. Diamond's Metacine and SkinCeuticals enhancing its premium assortment. Macy's shares have risen 73.5% over the past year compared with the industry's 34.9% growth, and the stock currently has a Zacks Rank #2 (Buy).

Berkshire Hathaway CEO Greg Abel deployed roughly $23.5 billion into nine publicly traded companies last quarter, marking the conglomerate's first quarter as a net buyer of stocks since 2022. The largest investment was Alphabet, with a $10 billion private placement in June plus an additional $5 billion to $7 billion in open-market purchases, making it Berkshire's third-largest marketable equity holding. Other U.S. additions included Macy's, Delta Airlines, Lennar, New York Times, and a new position in D.R. Horton, while earlier disclosures revealed increased stakes in Japanese trading houses Mitsubishi, Marubeni, and Sumitomo. The article highlights Alphabet as the best of the bunch, citing its $514 billion contracted revenue backlog, expanding cloud operating margin to 35.6%, and a forward earnings multiple of 16.5 times.

Berkshire Hathaway significantly increased its Alphabet stake in the second quarter of 2026, raising its holdings by 83% to about 106 million shares. The position was worth nearly $38 billion at the end of June, making Alphabet the third-largest holding in Berkshire's U.S. stock portfolio, behind Apple and American Express. Berkshire also increased its stake in Delta Air Lines by 44% during the quarter, taking that position to about $5.4 billion as of June 30. The company initiated a new position in D.R. Horton and significantly increased its holdings in Lennar and Macy's, while roughly halving its stakes in Capital One and Nucor and trimming Bank of America and Kroger. Berkshire also repurchased $4.5 billion of its own shares, marking its largest quarterly buyback since 2021.

Warren Buffett's Berkshire Hathaway increased its stake in Macy's by 141.82% during the period covered by its latest filing, bringing its holdings to 7.37 million shares worth roughly $173 million and giving it 2.79% ownership of the retailer as of June 29, 2026. The position, which represents just 0.06% of Berkshire's total portfolio, marks the conglomerate's first public bet on a department store chain in about 60 years. Macy's delivered a strong first quarter, with companywide comparable sales up 3% versus guidance of 0.5% to 1.5%, adjusted earnings per share of $0.13 beating a range that topped out at a penny, and net sales climbing 1.8% to $4.7 billion. The company raised its full-year outlook to net sales between $21.5 billion and $21.75 billion and adjusted earnings per share of $2.00 to $2.20, while returning $100 million to shareholders through dividends and buybacks. Analysts forecast free cash flow to expand from $690 million in fiscal 2026 to $955 million in fiscal 2031, and at 8.3 times forward free cash flow the stock could return over 35% within three years after dividends, though the average price target of $22.33 is 4.6% below current levels.

Macy's stock has surged 88.5% over the past year yet still screens as undervalued based on a Discounted Cash Flow model and earnings multiples. The DCF model, using trailing free cash flow of about $966 million and moderate growth assumptions, estimates an intrinsic value of roughly $39 per share, implying the stock is about 42.2% undervalued at its recent price of $22.70. On an earnings basis, Macy's trades at a P/E of about 9.0 times, well below the Multiline Retail industry average of 18.9 times and a peer group average of 14.4 times, while a fair P/E for the company is estimated at around 12.3 times. Recent positive attention includes Morgan Stanley's new Overweight rating and a share purchase by Berkshire Hathaway CEO Greg Abel, but the market still appears to apply a cautious view to projected cash flows.

Macy's reported first-quarter fiscal 2026 results that surpassed the Zacks Consensus Estimate, with adjusted earnings of 13 cents per share and net sales of $4,682 million. Comparable sales rose 3%, marking the strongest fiscal first-quarter performance in four years, driven by growth across all three nameplates: Macy's, Bloomingdale's, and Bluemercury. Encouraged by the results, management raised its full-year outlook, now expecting net sales of $21.5 to $21.75 billion and adjusted earnings per share of $2.00 to $2.20. The company also provided second-quarter guidance, projecting net sales of $4.75 to $4.80 billion and adjusted earnings per share of 29 to 34 cents. Shares have added about 1% since the last earnings report, outperforming the S&P 500.

Greg Abel, in his first quarter as CEO of Berkshire Hathaway, trimmed the company's equity portfolio from 42 to 29 positions, the lowest in over a decade, while expanding the stake in Alphabet. Abel's moves reflect his stated principles of concentrating in high-conviction stocks and avoiding companies that could tarnish Berkshire's reputation. He closed out the position in Amazon, leaving Apple and Alphabet as the two artificial-intelligence-related holdings, though Apple is viewed more as a consumer goods company. New positions in Macy's and Delta Air Lines align with classic Buffett-style investing, but the increased bet on Alphabet may signal Abel's comfort with pure-play tech as the digital shift accelerates.

Berkshire Hathaway, under new CEO Greg Abel, has acquired three million shares of Macy's, marking the conglomerate's first investment in the department-store chain. The stake is seen as a vote of confidence in Macy's brand strength, dividend profile, and progress in higher-growth banners like Bloomingdale's and Bluemercury. However, the investment does not fundamentally change near-term catalysts, which still depend on execution against 2026 sales guidance, margin discipline, and ongoing store rationalization. The stock has risen sharply over the past three months and is trading above consensus price targets, suggesting the news may already be partly reflected in expectations. Key risks include structurally pressured mall traffic, insider selling, and questions around the durability of Macy's dividend.

Berkshire Hathaway's new CEO Greg Abel has purchased shares of Macy's, marking the first time the conglomerate has invested in the department store retailer in its more than 30 years as a public company. The purchase was one of three new stock buys Abel made in his first quarter as CEO, as he works to concentrate the portfolio into fewer high-conviction holdings. Macy's trades at a price-to-earnings ratio of only 10 and offers a dividend yield of 3%, but the company has been distressed amid changing shopping habits. In its fiscal 2026 first quarter, total comparable sales rose 3%, driven by a 10.2% increase at Bloomingdale's and a 6.4% increase at Bluemercury, while the Macy's brand saw a 1.6% gain. Adjusted earnings per share were $0.13, up from $0.11 a year earlier.

Zacks Investment Research named NextEra Energy Partners, Banco Bilbao Viscaya Argentaria, and Macy's as top income stocks with buy ranks on June 25. NextEra Energy Partners, which owns and manages clean energy projects, saw its current-year earnings consensus estimate jump 127.7% over the last 60 days and offers a dividend yield of 12.7%, far above its industry average of 0.0%. Banco Bilbao Viscaya Argentaria, a Spanish banking and financial services firm, posted a 3.9% increase in its current-year earnings estimate and carries a 7% dividend yield versus an industry average of 4.6%. Macy's, the omni-channel retailer, recorded an 8.6% rise in its current-year earnings estimate and provides a 3.8% dividend yield compared to its industry's 2.8%. All three stocks hold a Zacks Rank #1, or Strong Buy.

Berkshire Hathaway has been adding to its stake in Macy’s even while being a net seller of stocks, likely because the retailer is absurdly cheap on multiple metrics. Macy’s trades at a price-to-earnings ratio of 10, which fell as low as 7.5 in the first quarter of 2026, far below competitors like Walmart and Costco at over 40 times earnings and Target at 18 times. The company also owns up to an estimated $9 billion in real estate, well above its roughly $6.7 billion market cap, and pays a dividend yield of about 3% that it recently raised by 5%. Sales growth has turned positive, with first-quarter fiscal 2026 net sales rising and full-year comparable sales guidance lifted to a range of 0.5% to 1.2% growth. The combination of a discounted asset base, recovering sales, and a sustainable dividend makes Macy’s an overlooked bargain that may reflect the influence of Warren Buffett himself.

Macy's is leveraging luxury demand, omnichannel selling, artificial intelligence, and supply-chain upgrades to reshape its business, though tariffs and uneven consumer spending continue to weigh on margins. Bloomingdale's posted 10.2% comparable sales growth in the first quarter of 2026, its highest first-quarter sales volume in 154 years, while Bluemercury added 6.4% comparable sales growth led by makeup, dermatological skincare, and fragrances. Digital sales rose to 34% of net sales from 33% a year earlier, supported by reimagined store locations that helped the Macy's nameplate achieve 1.6% comparable sales growth. The company is deploying AI for inventory forecasting and management, and has introduced Ask Macy's, an AI-powered conversational shopping assistant, while its China Grove distribution facility is ramping up automation to improve service levels and cost efficiencies. However, tariffs reduced first-quarter gross margin by about 30 basis points, and second-quarter guidance assumes a 20- to 40-basis-point gross margin headwind from tariffs and fuel costs, with lower-income customers remaining selective and big-ticket home categories soft.

Macy's shares have rallied sharply, gaining 10.4% year to date and 123.9% over the trailing 12 months, but the valuation debate remains active. The stock trades at 10.90 times forward 12-month earnings, a discount to its Zacks sub-industry at 13.46 times, the Zacks sector at 23.43 times, and the S&P 500 at 21.65 times. First-quarter enterprise comparable sales rose 3%, with Bloomingdale's up 10.2% and Bluemercury up 6.4%, while other revenues grew 8.2% to $210 million, including an 11.7% increase in credit card revenues to $172 million. However, gross margin fell 30 basis points to 38.9%, partly due to tariffs, and store closures reduced sales by about $40 million. Macy's ended the quarter with $1.3 billion in cash and nearly $2 billion in borrowing capacity, and operating cash flow swung to a $292 million inflow from a $64 million outflow a year earlier. The stock carries a Zacks Rank #3, or Hold, reflecting a middle-ground view rather than a high-conviction buy call.