Macy's Inc (M, Financial) has recently experienced a notable uptick in its stock performance, with a market capitalization now standing at $5.56 billion. The current price of Macy's stock is $20.27, reflecting a 1.52% gain over the past week. More impressively, the stock has seen a significant 49.42% gain over the past three months. When compared to the GF Value of $20.56, Macy's is currently considered fairly valued, a shift from its previous status as significantly undervalued when the GF Value was at $21.1. This change in valuation suggests that the market is recognizing the company's potential and adjusting its expectations accordingly.
Introduction to Macy's Inc
Macy's Inc, a stalwart in the retail - cyclical industry, has a storied history dating back to 1858. Headquartered in New York City, Macy's operates approximately 550 stores under its namesake brand, along with nearly 60 Bloomingdale's locations, and 158 Bluemercury specialty beauty stores. The company has also expanded its reach through e-commerce platforms and international licensing. Women's apparel, accessories, shoes, cosmetics, and fragrances accounted for 61% of Macy's 2022 sales, highlighting its focus on these key retail segments. 
Assessing Macy's Profitability
Macy's Inc boasts a Profitability Rank of 7 out of 10, indicating a strong position within its industry. The company's operating margin stands at 4.16%, outperforming 55.05% of 1,108 companies in the retail sector. Its return on equity (ROE) is an impressive 17.06%, surpassing 78.01% of its peers. Additionally, Macy's return on assets (ROA) and return on invested capital (ROIC) are 3.97% and 6.71% respectively, both of which are better than the majority of their competitors. These figures demonstrate Macy's ability to generate profits and manage its assets effectively, with nine years of profitability over the past decade.
Growth Trajectory of Macy's Inc
Despite its strong profitability, Macy's Inc's Growth Rank is a modest 2 out of 10. The company's 3-year revenue growth rate per share is 3.40%, which is better than 47.89% of the companies in the industry. However, the 5-year revenue growth rate per share shows a slight decline of 0.10%. Looking ahead, the estimated total revenue growth rate for the next 3 to 5 years is projected at -5.09%, indicating potential challenges in sustaining growth. On a brighter note, the 3-year EPS without NRI growth rate is a robust 15.50%, showcasing the company's ability to increase earnings. The future EPS growth rate estimate for the next 3 to 5 years is a slight decrease of -0.75%.
Key Shareholders in Macy's Inc
Notable investors have taken significant positions in Macy's Inc, demonstrating confidence in the company's prospects. David Tepper (Trades, Portfolio) holds 5,000,000 shares, representing 1.83% of the company, while Chuck Royce (Trades, Portfolio) owns 1,783,500 shares, accounting for 0.65%. Howard Marks (Trades, Portfolio) also has a stake in Macy's, with 530,675 shares, making up 0.19% of the company. These shareholders' involvement underscores the investment community's interest in Macy's performance and future.
Competitive Landscape
When compared to its competitors, Macy's Inc holds a competitive position within the retail industry. Kohl's Corp (KSS, Financial) has a market cap of $2.87 billion, and Nordstrom Inc (JWN, Financial) is valued at $2.77 billion, both of which are smaller than Macy's. On the other hand, Dillard's Inc (DDS, Financial) has a slightly larger market cap at $6 billion. Macy's market cap of $5.56 billion places it in a strong position relative to these key competitors, reflecting its significant presence in the retail sector.
Conclusion
In summary, Macy's Inc's recent stock performance has been impressive, with a 49.42% gain over the past three months and a current valuation that aligns with the GF Value. The company's profitability metrics are robust, with a high Profitability Rank and strong operating margins, ROE, ROA, and ROIC. While growth presents some challenges, the company has demonstrated the ability to increase earnings over the past three years. The involvement of significant shareholders like David Tepper (Trades, Portfolio), Chuck Royce (Trades, Portfolio), and Howard Marks (Trades, Portfolio) suggests a vote of confidence in Macy's future. Finally, Macy's holds its own against competitors like Kohl's, Nordstrom, and Dillard's, maintaining a competitive market capitalization within the industry. As Macy's continues to adapt and evolve in the dynamic retail landscape, investors and market watchers alike will be keen to see how the company's strategies unfold in the coming quarters.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
