Macy’s is emerging as a surprising contender in today’s challenging retail landscape, showing promising signs of resilience amidst concerns surrounding the so-called retail apocalypse. Over the past year, Macy’s share price has surged by over 30%, significantly outpacing the broader S&P 500, which experienced a 16% gain.
Once viewed as a cautionary tale in the retail world, Macy’s has managed to turn investor sentiment around in a remarkably short period. The transformation can be traced back to late 2023 when strategic investors Arkhouse Management and Brigade Capital Management began accumulating shares. Their interest was primarily fueled by Macy’s impressive real estate assets, and they initiated a series of bids to purchase the company, all of which were ultimately rejected.
Instead of succumbing to acquisition pressure, Macy’s leadership launched a “bold new chapter” strategy that involved consolidating its operations. The company focused on selling off underperforming assets, including its extensive brick-and-mortar stores, a move reflecting the broader industry’s shift away from large physical retail networks. Macy’s plans include shuttering around 150 stores by the end of the current fiscal year, concentrating on retaining the most lucrative locations.
In line with this strategy, Macy’s has been actively divesting assets to real estate investment trusts, expecting to earn approximately $150 million from property sales this year, building on the $275 million it generated in 2024.
Despite facing revenue declines attributed to these closures, Macy’s has maintained a positive bottom line, albeit modest at times. Noteworthy highlights include a 9% year-over-year increase in comparable sales at Bloomingdale’s during the third quarter of the previous year and continuous growth in sales for the Bluemercury cosmetics brand, which has shown increases for 19 consecutive quarters.
Current market insights reveal a share price of $21.61, with a gross margin of 40.38% and a dividend yield of 3.32%. As the company continues its path of streamlining operations, there are signs that customers are responding positively to its new approach.
While optimism surrounds Macy’s recent performance, analysts remain cautious about the overarching potential for a full return to its former retail prominence. Continued reliable growth—both in profits and revenues—will be essential for Macy’s to regain its status as a leading retailer with a significant footprint in the American market.
