Macy's delivered its first-quarter earnings Thursday and walked away with one of the more unusual setups in retail this week: Warren Buffett's successor at Berkshire Hathaway initiated a 3 million-share stake in the department store chain on the same day the stock slipped 5.5% on the week to $18.41.
The Berkshire disclosure is the week's dominant story. Berkshire revealed it had taken a new position of 3,038,355 shares in Macy's — a signal from under the new Greg Abel leadership that the conglomerate sees value at current levels. The stock closed up 0.5% on Friday alone as the 13-F news broke after the bell Thursday. Macy's also declared a fresh quarterly dividend of $0.1915 per share on May 15, the first dividend announcement captured in the news feed since 2022, suggesting the company is resuming — or formalising — a cash return programme. These two events together represent a meaningful shift in the narrative around a stock that has spent much of the past year under pressure.
Short interest, however, is telling a more sceptical story. Bears added aggressively this week: short interest jumped 14% in seven days to reach approximately 11.7% of the free float, up from around 10.2% at the start of the week. That move extends a longer rebuild — SI has risen roughly 17% over the past month from a base near 10.1% in early April. Days-to-cover stand at 7.55 per the most recent FINRA data, meaning any covering pressure would not resolve quickly. The ORTEX short score has crept up from 50.8 to 54.3 over the past ten days, still in moderate territory but trending higher. Yet the lending market is not signalling stress: borrow costs run at just 0.46% annually, and availability has not tightened to any worrying degree, which means adding short exposure remains straightforward. New shorts are not paying a premium to press the trade.
Options positioning is close to neutral. The put/call ratio comes in at 1.00, barely above its 20-day average of 1.00, with a z-score of just 0.22. The range context matters here: the PCR spent much of April above 1.10 and touched 1.19 in mid-April during peak tariff anxiety. The retreat to parity over the past two weeks signals that options traders have largely stood down from active hedging. The 52-week PCR high is 1.62 and the low is 0.73 — the current reading is mid-range, offering no directional lean.
The Street's posture is cautious but not hostile. Analyst data as of mid-April shows a consensus of Hold with nine analysts at that rating and no active Buys from the major houses, though Jefferies carries a Buy with a $27 target from January. Following the Q4 March earnings print — where the stock rose 6.7% on the day and 9.3% over the following five sessions — several analysts cut targets while keeping Neutral ratings: JPMorgan trimmed to $21, Citigroup to $18, and Telsey Advisory to $20. The valuation is undemanding. The P/E sits near 8.6x and EV/EBITDA near 5.1x, both of which have drifted lower over the past month. The price-to-book has slipped to 0.98x, putting the stock just below book value. The EPS surprise factor score ranks in the 74th percentile, suggesting the company has been beating estimates more often than not. Bulls point to 20 consecutive quarters of comparable-sales growth across Macy's nameplates and double-digit gains in the Macy's Media Network and credit card revenues. Bears flag the ongoing net sales decline — down 1.7% year-on-year — and margin compression from tariff headwinds expected to pressure gross margins in the quarters ahead.
The Berkshire entry adds a new dimension. Closest domestic peer KSS dropped nearly 19% on the week, making Macy's relative resilience even more apparent. DDS, which posted strong first-quarter results of its own this week, fell 4.4%. Against that backdrop, the Berkshire stamp of approval and the resumed dividend programme set up an interesting dynamic: watch whether short covering follows, or whether bears use the news-driven bounce as fresh entry.
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