Macy's (M) AI Stock Analysis

• Market Cap: $4.67B
• Dividend Yield: 4.22%
• Average Volume (3M): 10.12M
• Price to Earnings (P/E): 9.7
• Beta (1Y): 1.14
• Revenue Growth: -3.43%
• EPS Growth: 169.28%
• Country: US
• Employees: 94,189
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Department Stores
• EPS (TTM): 0.41
• Shares Outstanding: 268,505,740
• 10 Day Avg. Volume: 9,163,597
• 30 Day Avg. Volume: 10,121,939
• PEG Ratio: <0.01
• Price to Book (P/B): 0.96
• Price to Sales (P/S): 0.19
• P/FCF Ratio: 5.76
• Enterprise Value/Market Cap: 1.73
• Enterprise Value/Revenue: 0.36
• Enterprise Value/Gross Profit: 0.88
• Enterprise Value/Ebitda: 4.89
• 1Y Price Target: $15.00
• Price Target Upside: -12.18% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

• Rating: 62 Neutral
• Price Target: $17.50 ▲(2.46% Upside)

Macy's overall stock score reflects a mix of financial challenges and positive technical momentum. The company's low valuation and strong technical indicators are offset by declining revenue and profitability. While the earnings call highlighted some strategic successes, the financial instability remains a significant concern.

Positive Factors

Omnichannel Strategy

Macy's strong omnichannel strategy, integrating physical and digital platforms, enhances customer experience and drives sustainable growth.

Luxury Segment Growth

Growth in luxury segments like Bloomingdale's and Blue Mercury indicates Macy's ability to capture high-margin markets, supporting profitability.

Debt Management

Proactive debt management through refinancing improves financial flexibility and reduces interest burden, strengthening Macy's balance sheet.

Negative Factors

Declining Net Profit Margins

Falling net profit margins indicate operational inefficiencies and cost pressures, potentially impacting Macy's long-term profitability.

SG&A Expense Increase

Rising SG&A expenses as a percentage of revenue suggest increased operational costs, which could pressure margins and profitability.

Reduced Free Cash Flow

Significant reduction in free cash flow limits Macy's ability to invest in growth initiatives and manage financial obligations effectively.

Macy's Business Overview & Revenue Model

Company Description

Macy's, Inc., an omni-channel retail organization, operates stores, Websites, and mobile applications. The company sells a range of merchandise, such as apparel and accessories for men, women, and children; cosmetics; home furnishings; and other consumer goods. As of January 29, 2022, it operated 725 department stores in the District of Columbia, Puerto Rico, and Guam under the Macy's, Macy's Backstage, Market by Macy's, Bloomingdale's, Bloomingdale's The Outlet, Bloomies, and bluemercury brands. It also operates in Dubai, the United Arab Emirates, and Al Zahra, Kuwait under the license agreements. The company also operates as a beauty products and spa retailer. The company was formerly known as Federated Department Stores, Inc. and changed its name to Macy's, Inc. in June 2007. Macy's, Inc. was founded in 1830 and is based in New York, New York.

How the Company Makes Money

Macy's generates revenue primarily through the sale of merchandise in its department stores and online. The company's revenue streams include full-price sales, clearance sales, and off-price sales through its Backstage stores. A significant portion of its earnings comes from apparel and accessories, which encompass clothing, footwear, and handbags. Macy's also benefits from its private label brands, which provide higher margins compared to national brands. In addition to retail sales, Macy's earns revenue through strategic partnerships, promotional events, and loyalty programs that drive customer engagement. The company's real estate assets, including owned and leased properties, contribute to its financial stability, and the ability to leverage its physical locations for distribution and fulfillment enhances its overall revenue potential.

Macy's Financial Statement Overview

Summary

Macy's financial performance is challenged by declining revenue and profitability, despite some improvements in cash flow management. The balance sheet shows moderate leverage but poor returns on equity, indicating financial instability.

Income Statement

Macy's income statement reveals significant challenges. The TTM data shows a drastic decline in revenue and profitability, with negative revenue growth and net income. Gross profit margin remains high, but net profit margin is negative, indicating operational inefficiencies. Historical data shows declining revenue growth and fluctuating margins, reflecting instability in financial performance.

Balance Sheet

The balance sheet indicates moderate leverage with a debt-to-equity ratio of 0.35 in the TTM period, a significant improvement from previous years. However, return on equity is negative, highlighting profitability issues. The equity ratio is stable, but the overall financial health is weakened by inconsistent equity returns and past high leverage.

Cash Flow

Cash flow analysis shows a positive trend in free cash flow growth in the TTM period, suggesting improved cash management. The operating cash flow to net income ratio is positive, indicating some operational efficiency. However, historical volatility in free cash flow growth and low coverage ratios suggest potential liquidity risks.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	22.70B	23.01B	23.87B	25.45B	25.40B	18.10B
Gross Profit	9.15B	9.27B	9.64B	10.10B	10.44B	5.81B
EBITDA	1.65B	1.76B	1.07B	2.50B	3.00B	-3.54B
Net Income	495.00M	582.00M	45.00M	1.15B	1.43B	-3.94B
Balance Sheet
Total Assets	15.55B	16.40B	16.25B	16.87B	17.59B	17.71B
Cash, Cash Equivalents and Short-Term Investments	829.00M	1.31B	1.03B	862.00M	1.71B	1.68B
Total Debt	5.48B	6.07B	6.34B	6.29B	6.83B	8.24B
Total Liabilities	11.10B	11.85B	12.11B	12.78B	13.97B	15.15B
Stockholders Equity	4.45B	4.55B	4.14B	4.08B	3.62B	2.55B
Cash Flow
Free Cash Flow	804.00M	760.00M	312.00M	320.00M	2.12B	183.00M
Operating Cash Flow	1.40B	1.28B	1.30B	1.61B	2.71B	649.00M
Investing Cash Flow	-481.00M	-592.00M	-913.00M	-1.17B	-370.00M	-325.00M
Financing Cash Flow	-732.00M	-413.00M	-220.00M	-1.30B	-2.38B	699.00M

Macy's Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 17.08
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For M, the sentiment is Positive. The current price of 17.08 is above the 20-day moving average (MA) of 16.53, above the 50-day MA of 14.19, and above the 200-day MA of 13.28, indicating a bullish trend. The MACD of 0.97 indicates Positive momentum. The RSI at 63.21 is Neutral, neither overbought nor oversold. The STOCH value of 48.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for M.

Macy's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MHO	80 Outperform	3.84B	7.87	16.59%	―	7.39%	-1.37%
KSS	77 Outperform	1.92B	9.34	5.30%	5.45%	-7.23%	-27.81%
DDS	77 Outperform	9.53B	16.84	30.00%	4.26%	-2.44%	-10.74%
PVH	73 Outperform	4.31B	10.03	9.63%	0.17%	-1.14%	-29.30%
M	62 Neutral	$4.67B	9.73	11.31%	4.22%	-3.43%	169.28%
VFC	53 Neutral	5.79B	68.23	-3.66%	2.50%	-7.41%	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Macy's Corporate Events

Macy’s Issues $500 Million in Senior Notes

On July 29, 2025, Macy’s Retail Holdings, LLC, a subsidiary of Macy’s, Inc., issued $500 million in senior notes due 2033 in a private offering to qualified institutional buyers. The proceeds are intended to fund a tender offer for outstanding senior notes and debentures, redeem approximately $587 million of other outstanding notes, and cover related fees and expenses. Additionally, Macy’s announced the early tender results and upsizing of its tender offer to repurchase up to $250 million of its outstanding notes, increasing the maximum amount from $175 million to $250 million. The tender offer, which had an early settlement date of July 29, 2025, saw all validly tendered notes accepted for purchase, with no notes accepted after the early tender date.

Macy’s Announces $500 Million Senior Notes Offering

On July 14, 2025, Macy’s, Inc. announced that its subsidiary, Macy’s Retail Holdings, LLC, priced a $500 million offering of 7.375% senior notes due 2033. The proceeds from this offering will be used to fund a tender offer, redeem outstanding senior notes, and cover related expenses. The closing of this offering is expected on July 29, 2025, and is crucial for the company’s financial restructuring efforts, impacting its debt management strategy.

Macy’s Announces $500 Million Senior Notes Offering

On July 14, 2025, Macy’s, Inc. announced that its subsidiary, Macy’s Retail Holdings, LLC, plans to offer $500 million in senior notes due 2033 in a private offering. The proceeds from this offering, along with cash on hand, will be used to fund a tender offer to repurchase certain outstanding senior notes and debentures, redeem approximately $587 million of other outstanding notes, and cover related expenses. This financial maneuver is part of Macy’s strategy to manage its debt and optimize its financial structure, potentially impacting its market positioning and stakeholder interests.