Warren Buffett‘sBerkshire Hathaway made a move that caught even longtime investors off guard.
The conglomerate first built a new position in Macy’s in Q1 of 2026, marking its first public bet on a department store chain in about 60 years.
According to Tikr.com data
- Berkshire now holds 7.37 million shares of Macy’s (M) worth roughly $173 million, according to filing data.
- That stake grew 141.82% during the period covered by the filing, giving Berkshire 2.79% ownership of Macy’s outstanding shares as of June 29, 2026.
- It’s a small position relative to Berkshire’s overall portfolio, representing just 0.06% of total holdings.
Buffett has generally avoided traditional retailers for several years, and this shift suggests someone at Berkshire sees real value sitting inside Macy’s stock right now.
Berkshire avoided department stores for decades
Berkshire’s relationship with department stores goes back to the 1960s, when Buffett and longtime partner Charlie Munger invested in Hochschild Kohn, a Baltimore-based chain.
That bet didn’t work out, and Buffett later became known for avoiding retailers facing structural headwinds like e-commerce competition and shrinking mall traffic.
Buffett isn’t making the call, since Berkshire’s stock picks in recent years have often come from other portfolio managers.
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Still, any new retail bet from Berkshire tends to draw attention given the firm’s track record of avoiding value traps.
Macy’s operates through three brands:
- Macy’s is the classic department store chain, selling apparel, cosmetics, and home goods across the middle-to-upper price range.
- Bloomingdale’s is the luxury arm, known for high-end fashion and a more elevated shopping experience.
- Bluemercury rounds things out as a specialty beauty and skincare retailer.
Combined, the company carries a market cap of around $6.2 billion.
Macy’s stock delivered a strong quarter
The timing of Berkshire’s stake lines up with a strong quarter for Macy’s. During its first-quarter 2026 earnings call, CEO Tony Spring told investors:
“In the first quarter, we delivered enterprise-wide growth, better than expected performance across all key metrics. And our best comparable sales in four years with all nameplates and channels positive.”
Companywide comparable sales rose 3%, well above the company’s own guidance of 0.5% to 1.5%.
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Adjusted earnings per share came in at $0.13, beating a guidance range that topped out at a penny of profit. Net sales climbed 1.8% to $4.7 billion, also ahead of expectations.
Macy’s nameplate posted its fourth straight quarter of positive comps, up 1.6%. Bloomingdale’s posted a 10.2% comp gain, the best first-quarter sales result in its 154-year history. Bluemercury grew comparable sales 6.4%.
CFO Tom Edwards said operating cash flow swung to a $292 million inflow, compared to a $64 million outflow a year earlier.
The Reimagine stores are key growth drivers
Much of the improvement traces back to what Macy’s calls its Reimagine program, a set of upgraded stores with more staffing, better assortments, and improved visual presentation.
Spring said these locations have posted positive comps in eight of the last nine quarters and now cover about 60% of Macy’s go-forward store base.
Management also pointed to steady growth in average unit retail, which was up 8.3% companywide, alongside consistent customer traffic.
Executives attributed part of that gain to selling more premium products and less clearance merchandise than a year earlier.
Not everything is firing on all cylinders.
Big-ticket furniture and the plus-size category both showed softness, something Spring attributed partly to tariff-related price increases and a soft housing market.
What the raised guidance tells investors
Macy’s raised its full-year outlook following the quarter, now expecting net sales between $21.5 billion and $21.75 billion, with adjusted earnings per share of $2.00 to $2.20.
The company also returned $100 million to shareholders in the quarter through dividends and buybacks, with about $1.1 billion still left on its repurchase authorization.
For a stock trading at a roughly $6.2 billion market cap against $21.5 billion or more in expected annual revenue, the valuation gap is hard to ignore.
Analysts tracking the retail stock forecast free cash flow to expand from $690 million in fiscal 2026 to $955 million in fiscal 2031, given consensus forecasts from Tikr.com.
If the stock is priced at 8.3x forward FCF, similar to its current multiple, it could return over 35% within the next three years, after adjusting for dividends.
Out of the 10 analysts covering Macy’s stock, one recommends “Buy”, eight recommend “Hold”, and one recommends “Sell”. The average Macy’s stock price target is $22.33, which is 4.6% below current levels.
Whether this stake grows into something larger remains to be seen. Berkshire’s position is still tiny relative to its overall book.
But for a firm that has stayed away from department stores since the Hochschild Kohn days, even a modest bet on Macy’s stock is worth watching closely.
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