One-glance verdict
Undervalued
$40.18 our estimate vs market $22.08
Wall Street consensus: $23.15 (-42.4% lower than our fair-value estimate)
45% below our estimate, below the bear case
Fundamentals snapshot
Macy's, Inc.
M · NYQ · Consumer Cyclical · Department Stores
Current price
$22.08
52-week range
$16.41 - $26.59
Market cap
$5.77B
Balance sheet
Watch
9.11x Adequate
Net debt $3.79B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 0.7% last year.
- Reward Returns 16.0% on equity, ahead of 20% of its peers.
- Risk Forward P/E (9.3x) is higher than trailing (8.1x) - earnings are expected to drop.
- Risk Operating margin compressed from 6.4% to 3.2% over 3 years.
What this company does
Macy's, Inc.
Macy's is a large department store chain selling clothing, makeup, and home goods through its well-known brands like Macy's and Bloomingdale's. The company makes money from these sales in its physical stores and online, so its success depends on attracting enough customers to cover the high costs of running its big retail locations.
How the company got here
Macy's started in 1858 as a single dry goods store in New York City opened by Rowland H. Macy. It grew over many decades by acquiring other regional department stores across the country. A major turning point came in 1994 when it was acquired by a rival, Federated Department Stores, which also owned Bloomingdale's, creating the nation's largest department store company. In 2007, the parent company renamed itself Macy's, Inc., solidifying the brand's central role. Facing challenges from online shopping, the company is now focused on a major overhaul to modernize its operations and focus on its most successful stores and brands.
What it actually does
Macy's is an omni-channel retailer, which means it sells things to customers in physical stores, on websites, and through mobile apps. Most people know it as a department store that sells a wide variety of items you'd use every day. This includes clothing and accessories for men, women, and children, as well as cosmetics, home furnishings, and other consumer goods. The company operates under a few different brand names that you might recognize: Macy's, Bloomingdale's, and Bluemercury.
Macy's
This is the company's main and largest brand, making up the vast majority of its business. These are the large department stores you see in malls and cities, selling a wide range of products like clothing, shoes, jewelry, makeup, and housewares. Customers are everyday shoppers and families looking for a variety of well-known brands at different price points. This segment also includes sales from the Macy's website and app, which are a crucial part of how the company reaches its customers.
Bloomingdale's
Bloomingdale's is the company's upscale department store, targeting customers looking for luxury and high-end brands. It offers more expensive and designer clothing, handbags, and home goods than a typical Macy's store. Think of it as a more premium shopping experience, which has been performing well and is a key area of growth for the company. While much smaller than the Macy's brand, it represents an important and profitable piece of the overall business.
Bluemercury
This is a smaller, separate chain of stores focused entirely on high-end beauty products. It sells luxury skincare, makeup, and fragrances, often in smaller neighborhood locations rather than big malls. Bluemercury competes with stores like Sephora and Ulta by offering a more curated (carefully chosen) selection and personalized advice from beauty experts. It's a small but fast-growing part of Macy's, Inc., and the company plans to open many new locations.
What management is betting on now
The company's current strategy is called "A Bold New Chapter," which focuses on modernizing the business to return to growth. A major part of this plan is to strengthen the main Macy's brand by closing about 150 less productive stores and investing heavily in its remaining 350 locations and its online presence. At the same time, management is accelerating the growth of its luxury businesses, planning to open dozens of new, smaller-footprint Bloomingdale's and Bluemercury stores. They are also working to simplify their supply chain (the system of getting products from the manufacturer to the store shelf) and use technology like artificial intelligence to better plan what products to sell and manage their inventory (the goods they have on hand).
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q4
$-295.00M
FY2026 Q1
$1.19B
FY2026 Q2
$-164.00M
FY2026 Q3
$240.00M
FY2026 Q4
$-101.00M
FY2027 Q2
$204.00M
FY2027 Q3
$229.00M
Revenue
$5.06B
Net income
$169.00M
Diluted EPS
0.62
Operating cash flow
$294.00M
Free cash flow
$229.00M
Fetching…
Sources
Revenue
$4.89B
Net income
$63.00M
Diluted EPS
0.23
Operating cash flow
$292.00M
Free cash flow
$204.00M
Fetching…
Sources
Revenue
$4.91B
Net income
$11.00M
Diluted EPS
0.04
Operating cash flow
$-8.00M
Free cash flow
$-101.00M
Fetching…
Sources
Revenue
$5.00B
Net income
$87.00M
Diluted EPS
0.31
Operating cash flow
$319.00M
Free cash flow
$240.00M
Fetching…
Sources
Revenue
$4.79B
Net income
$38.00M
Diluted EPS
0.13
Operating cash flow
$-64.00M
Free cash flow
$-164.00M
Fetching…
Sources
Revenue
$8.01B
Net income
$342.00M
Diluted EPS
1.22
Operating cash flow
$1.31B
Free cash flow
$1.19B
Fetching…
Sources
Revenue
$4.90B
Net income
$28.00M
Diluted EPS
0.10
Operating cash flow
$-167.00M
Free cash flow
$-295.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $40.18 vs current price $22.08
Wall Street consensus is the average analyst price target: $23.15 (-42.4% lower than our fair-value estimate).
Our most-likely fair value is $40.18 a share — about 82.0% above today's price of $22.08, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $3.8B. Interest coverage 9.1x.
Net debt
$3.79B
Interest coverage
9.11x
Macy's, Inc.'s profit covers its interest bill about 9.1 times over.
Watch
Worse cushion
Baseline
Better cushion
M
BASELINE
Macy's, Inc.
Total debt $5.09B Interest coverage 9.11x This is the baseline the peer rows are being compared against.
Total debt $6.42B Interest coverage 1.77x -81% vs M Carries about 5.1x less debt cushion than M.
Total debt $456.84M Interest coverage 16.78x +84% vs M Carries about 1.8x more debt cushion than M.
Total debt $4.74B Interest coverage 71.36x +683% vs M Carries about 7.8x more debt cushion than M.
Total debt $14.32B Interest coverage 97.00x +964% vs M Carries about 10.6x more debt cushion than M.
What you should know
The case for and against M
3 Rewards
2 Risks
Rewards
-
Revenue grew 0.7% last year.
-
Returns 16.0% on equity, ahead of 20% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Forward P/E (9.3x) is higher than trailing (8.1x) - earnings are expected to drop.
-
Operating margin compressed from 6.4% to 3.2% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
8.09x
Forward P/E
9.31x
P/B
1.17x
P/S
0.25x
EV/EBITDA
6.83x
PEG ratio
2.89x
Profitability
How much profit each dollar creates
Gross margin
40.3%
Operating margin
3.2%
Net margin
3.3%
ROE
16.0%
ROA
3.5%
Health
Liquidity and balance-sheet strength
Debt / equity
1.03x
Current ratio
1.59x
Quick ratio
0.38x
Total debt
$5.09B
Total cash
$1.29B
Growth
How the business has been compounding
Revenue TTM
$22.78B
Revenue 5Y CAGR
-1.9%
EPS TTM
2.73
EPS 5Y CAGR
-17.9%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.76B
Free CF TTM
$1.06B
FCF margin
4.6%
Dividend
Shareholder payout
Yield
3.5%
Payout ratio
27.4%
Last ex-div date
2026-09-15