Macy's stock has entered a new phase after its Q2 earnings release, with short sellers cutting positions and the stock drifting lower — a combination that tells a more complicated post-print story than the pre-release setup suggested.
The clearest shift this week is in short positioning. Short interest dropped roughly 5.8% on the week to 11.4% of free float, pulling back from the 12.1% level flagged in the pre-earnings note. That move reverses part of the 30-day build that had accumulated heading into the print. The direction is meaningful: bears who held through the release appear to be reducing exposure, not adding. The borrow market offers no friction to either side — availability remains extremely loose at around 914%, far above the 52-week low of 286%, and borrowing costs are negligible at 0.44%, down 10% on the week. There is no squeeze dynamic here; the short unwind looks orderly and voluntary. Options positioning, however, has not followed suit. The put/call ratio is running at 1.16, more than 2.3 standard deviations above its 20-day average of 1.09 — near the most defensive reading in the past year. That divergence is the week's central tension: shorts are trimming, but options traders are still paying for downside protection.
The Street's reaction to the print has been broadly cautious, with targets moving modestly in both directions. UBS kept its Sell rating on Tuesday and raised its target from $9 to $10 — still a sharp discount to the current $22.59 price and worth flagging as an outlier. Citigroup was more measured, lifting its Neutral target from $22 to $24, reflecting the June earnings beat. The consensus mean sits at around $23.23, barely above where the stock trades, indicating limited upside is being priced in. Morgan Stanley's reinstated Overweight at $30 from July remains the most constructive position among the recent changes, though the stock has since slipped from the levels where that call was made. The bear case centres on an adjusted EBITDA margin guided below 5% — down from 6.3% last year — and tariff headwinds on gross margin. The bull case leans on the June print: comparable sales rose 0.4%, Reimagined locations showed 0.9% comps growth, and credit card revenues climbed 17%. The stock's P/E sits near 10x and EV/EBITDA around 5.8x, leaving the valuation argument relatively balanced but not compellingly cheap given the margin trajectory.
One institutional angle worth noting: Berkshire Hathaway added over 4.3 million shares in the quarter ended June 30, bringing its stake to 2.79% of shares outstanding. That is a meaningful addition for a name carrying 11%-plus short interest. At the same time, the ORTEX short score has dipped to 55.4 from a recent peak of 57.6 earlier in the month — a mild cooling rather than a dramatic shift. Closest peer KSS fell 5.5% on the week, a steeper decline than Macy's own 2.8% drop, suggesting some relative resilience in the immediate post-earnings period. ETSY moved in the opposite direction, gaining 5.6%.
The next scheduled event is September 10, which gives the market roughly two weeks to settle on what the Q2 print actually means — whether the short unwind continues or whether options traders demanding protection are the better read on what comes next.
See the live data behind this article on ORTEX.
Open M on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
