Macy's heads into its Q2 earnings release today with short sellers holding an unusually large position and options traders positioning more defensively than at almost any point this year.
The most striking feature of the setup is how much short interest has grown over the past month. At 12.1% of free float, Macy's short position is already elevated for a large-cap retailer — and it has climbed nearly 19% over the past 30 days. The one-week change is a modest 0.6%, suggesting the build has stabilised ahead of the print rather than accelerating into it. The borrow market remains loose, with availability around 935% — well above the 52-week low of 286% — meaning new shorts have faced no friction entering the trade. Borrowing costs are negligible at under 0.5%, up only modestly on the week. Options positioning reinforces the cautious lean: the put/call ratio has risen to 1.16, roughly 2.4 standard deviations above its 20-day average of 1.09. That is close to the most defensive reading in the options market all year, behind only the 52-week high of 1.62.
The bull and bear cases into this print are genuinely in tension. Bears point to what is already on the table: net sales fell 1.7% year-over-year in the most recent quarter, adjusted EBITDA margins are expected to compress sharply to roughly 5% from 6.3%, and tariff headwinds continue to pressure gross margins across the department-store space. Peers and other broadline retailers have also struggled, with Kohl's down more than 5% on the week even as surged 11%. Bulls see a different story: comparable sales at Macy's "Reimagined" store concept have grown for 20 consecutive quarters, credit card revenues rose 17% and its media network grew 12.5%, and Morgan Stanley reinstated coverage with an Overweight rating and a $30 target in July. Citigroup's Paul Lejuez raised his target to $24 from $22 this morning — maintaining Neutral — a signal that even the fence-sitters see some value at current levels. The Street's mean target is $23.14, only marginally above the current $22.59 close, which reflects genuine uncertainty rather than clear bullish or bearish conviction.
The institutional picture adds one genuinely interesting data point. Berkshire Hathaway reported a position of 7.3 million shares as of June 30 — and added 4.3 million of those shares in the most recent quarter, making it one of the larger incremental buyers in the holder base. That sits alongside BlackRock at 10.7% and Dimensional at 6.4% as the anchor holders. On the insider side, the CFO sold shares in late June at around $24.90 — above today's price — while the prior Q1 print delivered a solid 6.3% single-day gain and held most of that move over five days.
Today's print is less a referendum on whether Macy's is structurally in decline and more a test of whether the Reimagined store strategy and ancillary revenue streams can offset enough margin pressure to justify the position Berkshire and other value-oriented buyers have been building into a heavily shorted name.
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