{"id":2827,"date":"2026-05-18T18:10:33","date_gmt":"2026-05-18T18:10:33","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=2827"},"modified":"2026-05-18T18:10:33","modified_gmt":"2026-05-18T18:10:33","slug":"buffetts-berkshire-drops-bold-55m-bet-on-struggling-retail-icon","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=2827","title":{"rendered":"Buffett\u2019s Berkshire drops bold $55M bet on struggling retail icon"},"content":{"rendered":"

<\/p>\n

Most investors have been running away from Macy’s in 2026. But Greg Abel just ran toward it with $55 million of Berkshire Hathaway’s money.<\/p>\n

The new Berkshire CEO made headlines Friday when the conglomerate’s Q1 2026 13F filing revealed a brand new 3.04 million-share stake in Macy’s (M) valued at approximately $55 million. The stock is down 15.56% year-to-date and trading near $18, a far cry from the department store’s former glory days, according to Yahoo Finance.<\/p>\n

That gap between perception and underlying value is precisely what the Berkshire playbook has always been about. The world’s most famous value-investing machine, with $263 billion in managed 13F securities, according to WhaleWisdom, just decided that a 167-year-old American retail institution is worth a second look.\u00a0<\/p>\n

The question worth asking is not whether Berkshire is sentimental about department stores. It is whether the numbers actually support the bet.<\/p>\n

Why Berkshire’s Abel made a $55M contrarian call on Macy’s<\/h2>\n

Macy’s shares had shed roughly 17% of their value in 2026 before Berkshire’s filing became public. That selloff pushed the stock to a price-to-earnings multiple of approximately 8 times, below what analysts considered fair value, according to Yahoo Finance reporting.<\/p>\n

For a company generating $21.8 billion in annual revenue, 450 locations, and 94,000 employees, according to Wikipedia, that’s a valuation reflecting maximum pessimism rather than measured risk assessment.<\/p>\n

My review of Macy’s balance sheetfundamentals reveals a more interesting picture than the stock price suggests. The company ended fiscal year 2025 with $1.2 billion in cash and equivalents, generated $1.4 billion in operating cash flow, and produced $800 million in free cash flow, according to the company’s March 18 earnings release. The quarterly dividend of 19.15 cents per share is also intact.<\/p>\n

Then there is the real estate. Macy’s owns or controls premium retail locations in high-traffic markets across the United States – a physical asset base that has consistently been cited by analysts as worth significantly more than the stock’s market capitalization implies. This is the kind of asset-backed safety net that Benjamin Graham, an American economist and financial investor who mentored Warren Buffett, would have recognized immediately. It appears Abel sees it too.<\/p>\n

\n

Macy’s Inc. CEO announced the expansion of strategic initiatives to 75 additional stores under a new “Reimagine 200” program for 2026.<\/p>\n

LightRocket via Getty Images<\/p>\n<\/figcaption><\/figure>\n

Macy’s “Bold New Chapter” turnaround is showing up in the financial results<\/h2>\n

Before writing Macy’s off as a value trap, the recent operating results deserve an honest read.<\/p>\n

Macy’s fiscal fourth-quarter 2025 and full-year results reported on March 18:<\/p>\n

    \n
  • Q4 net sales of $7.6 billion, exceeding guidance<\/li>\n
  • Q4 comparable sales up 1.8%, above guidance<\/li>\n
  • Q4 Bloomingdale’s comparable sales up 9.9% – the brand’s best holiday performance on record<\/li>\n
  • Full-year comparable sales up 1.5%, returning to positive territory<\/li>\n
  • Full-year adjusted diluted EPS of $2.32, exceeding the most recent guidance range<\/li>\n
  • Returned $448 million to shareholders through dividends and buybacks
    \nSource: Macy\u2019s, Inc. Fourth Quarter and Fiscal Year 2025 Results\n<\/li>\n<\/ul>\n

    The “Bold New Chapter” strategy at the core of CEO Tony Spring’s turnaround plan is straightforward: close roughly 150 underperforming locations, reinvest in 350 profitable go-forward stores, and aggressively grow Bloomingdale’s and Bluemercury.\u00a0<\/p>\n

    Spring also announced the expansion of strategic initiatives to 75 additional stores under a new “Reimagine 200” program for 2026, according to their earnings statement.<\/p>\n

    Related: Warren Buffett doubles down on stock market message for 2026<\/strong><\/p>\n

    “Bloomingdale’s exceptional performance underscores its ability to elevate the customer experience and capture demand across premium contemporary to luxury businesses,” Tony Spring, CEO, said in the March earnings release.<\/p>\n

    That last point matters. Bloomingdale’s at 9.9% comparable sales growth is not the story of a dying retail brand. It is the story of a premium brand inside a struggling parent, and it is the kind of hidden value that a disciplined value investor cannot ignore.<\/p>\n

    What Macy’s buy reveals about how Greg Abel is reshaping Berkshire’s portfolio<\/h2>\n

    The Macy’s stake does not exist in isolation. Abel’s first major 13F reveals a portfolio in deliberate transition.<\/p>\n

    Berkshire has been exiting capital-light digital payments and technology names – including trimming or exiting Visa, Mastercard, and Amazon – to reallocate into undervalued, asset-backed businesses with tangible earnings power. Delta Air Lines at $2.65 billion and Macy’s at $55 million both fit the same philosophical framework: real assets, real cash flows, and prices that reflect investor fatigue rather than business deterioration.<\/p>\n

    More Retail:<\/strong><\/p>\n

      \n
    • Another mall retailer quietly closed over 150 locations<\/strong><\/li>\n
    • Ultra-wealthy shoppers flock to this 63-year-old rugged retailer<\/strong><\/li>\n
    • 72-year-old mall retailers to close more stores in 2026<\/strong><\/li>\n<\/ul>\n

      This is the Abel version of the Berkshire playbook. It is not dramatically different from Buffett’s, but calibrated for a market where the most obvious AI and tech bets are already richly priced and genuine value lives in overlooked corners.<\/p>\n

      Macy’s 2026 guidance directly acknowledges the headwinds. The company expects tariff pressure to be most concentrated in the first quarter, with second-half conditions improving, according to the earnings statement.\u00a0 Management is investing in the Reimagine 200 locations to support long-term growth while maintaining financial flexibility to navigate the uncertain macro environment.<\/p>\n

      Berkshire sees something the broader market is entirely discounting. History suggests that when Berkshire moves with conviction on a beaten-down American brand, the patient investor gets rewarded eventually. We say, more money is made by sitting on your hands. Warren had several times proved that with Berkshire.<\/p>\n

      Related: Warren Buffet’s Berkshire makes major $2.65B move in surging stock<\/strong><\/p>\n

      #Buffetts #Berkshire #drops #bold #55M #bet #struggling #retail #icon<\/p>\n","protected":false},"excerpt":{"rendered":"

      Most investors have been running away from Macy’s in 2026. But Greg Abel just ran toward it with $55 million of Berkshire Hathaway’s money. The new Berkshire CEO made headlines… <\/p>\n","protected":false},"author":1,"featured_media":2828,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[4861,2696,157,1476,4345,647,1946,1076,937],"class_list":["post-2827","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-popular","tag-55m","tag-berkshire","tag-bet","tag-bold","tag-buffetts","tag-drops","tag-icon","tag-retail","tag-struggling"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/2827","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2827"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/2827\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/2828"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2827"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2827"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2827"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}