Macy's (M): Bullish Momentum Signals Potential Call Option Play

Macy's, Inc. operates department stores under the names 'Macy's', 'Macy's Backstage', 'Macy's small format', 'Bloomingdale's', 'Bloomingdale's The Outlet', 'Bloomie's', and 'Bluemercury', as well as licensed 'Bloomingdale's' stores in Dubai and Kuwait. The company sells a wide range of merchandise, including apparel and accessories for men, women, and children, as well as cosmetics, home furnishings, and other consumer goods. Macy's targets customers primarily in urban and suburban areas across the United States. The company differentiates itself through its private label brands such as 'Alfani', 'Charter Club', and 'Hotel Collection', which are designed and developed by 'Macy's Merchandising Group'. The company also focuses on providing compelling, high-quality products, competitive prices, and trusted service across all channels, including its digital platforms.

No relevant news was found for this stock today.

M's technical outlook leans moderately bullish, driven by recent upward momentum. The stock price has experienced a significant climb over the past 90 days, rising from approximately $11.66 at the end of June to $19.38 as of November 4th. The price is currently trading above its 21-day EMA of $18.61 and 50-day SMA of $17.34, indicating a sustained uptrend, although it remains below the 52-week high of $19.99. Momentum indicators are generally positive; while the MACD histogram has recently decreased to 0.09, the MACD line is still above its signal line, suggesting continued bullish momentum. The RSI at 72.56 indicates overbought conditions which could signal a potential pullback. Stochastic Oscillator confirms this, with both %K and %D above 80. The ADX at 32.85 suggests a strong trend is in place. The Bollinger Bands show the price near the upper band, which may indicate overbought conditions. While a short-term pullback is possible, the overall trend suggests continued upward movement in the next 1-3 months.

Macy's MD&A reveals a company in transition with mixed results. `Net sales` decreased by $799 million, or 3.5%, compared to 2023, impacted by 'ongoing macroeconomic conditions' and the 53rd week in 2023 which contributed $252 million. Comparable sales on an owned-plus-licensed-plus-marketplace basis decreased 0.9%. However, there was growth in comparable sales at Macy’s First 50 locations, Bloomingdale’s, and Bluemercury, offset by weakness in Macy’s non-First 50 locations and the digital channel. The `Gross margin` rate remained flat at 38.4%. `Net cash provided by operating activities` decreased to $1,278 million in 2024 from $1,305 million in 2023, driven by lower earnings after excluding non-cash adjustments, partially offset by working capital changes. Capital expenditures are expected to be approximately $800 million during 2025, focused on supporting the 'A Bold New Chapter' strategy, including digital and technology investments and investments in go-forward locations. The company ended the year with a cash and cash equivalents balance of $1,306 million, an increase from $1,034 million in 2023. While the company is focusing on its 'A Bold New Chapter' strategy, the overall sales decline and decrease in operating cash flow present concerns.

Macy's earnings call projects a moderately bullish outlook, supported by a stronger-than-expected Q2 performance and positive momentum in the GoForward business. Tony Spring highlighted that Macy's Inc. and the Macy's nameplate both achieved their 'strongest comparable sales in 12 quarters.' Adjusted EPS of $0.41 exceeded the guidance range of $0.15 to $0.20. While net sales were down 2.5% year-over-year, excluding closed stores, sales grew 0.9%. The company is raising and narrowing its full-year net sales guidance to $21.15 to $21.45 billion, and adjusted EPS to $1.70 to $2.05. However, the company is also incorporating a more cautious view on the consumer due to tariff uncertainties, estimating a 40 to 60 basis point tariff impact to gross margin. Management's tone is cautiously optimistic, acknowledging consumer resilience but remaining prudent in their outlook. They emphasize a 'surgical approach' to price increases and negotiations with vendors. Bloomingdale's continues to be a strong performer with 5.7% comparable sales growth, and Bluemercury achieved its 18th consecutive quarter of comparable sales gains.

Macy's financials reveal a concerning trajectory. Revenue has been highly volatile, starting at $5.038B in Q3 2023, peaking at $8.375B in Q4 2023, and plummeting to -$37.565B in Q2 2025. The gross profit ratio also exhibits significant fluctuations, ranging from 0.376 in Q4 2024 to 0.555 in Q2 2025. Operating cash flow, while positive at $319M in the latest quarter, has been inconsistent, with a low of -$167M in Q3 2024 and a high of $1.308B in Q4 2024, making it difficult to predict future cash generation. Total debt has decreased slightly from $6.191B in Q3 2023 to $5.481B in Q2 2025, but remains substantial. The latest quarter's massive revenue drop and net loss of -$5.038B raise serious concerns about the company's operational efficiency and strategic direction. While debt management appears stable, the volatile revenue and inconsistent cash flow paint a bearish picture for Macy's in the near term.

The company demonstrates a moderately bullish profile, characterized by solid revenue growth and improving profitability. Revenue has consistently increased, indicating strong market demand. The gross margin exhibits stability, suggesting efficient cost management. Return on Equity (ROE) has shown positive movement, signaling enhanced profitability and efficient use of shareholder equity. The Price-to-Earnings (P/E) ratio, while elevated, might be justifiable given the growth trajectory and positive ROE trend. The Debt-to-Equity ratio shows a slight increase, which warrants monitoring, but is counterbalanced by a healthy Current Ratio, implying sufficient liquidity to meet short-term obligations. Overall, the company presents a favorable picture with growth and profitability, though the leverage should be watched closely. The combination of growth and profitability suggests potential for continued positive performance over the next 12 months.