Avoid Macy’s Stock
At least 125 store closures over the next three years.
Thousands of jobs cut.
A 1st quarter 2020 net loss of $3.6 billion.
A 1st quarter 2020 net loss per share of $11.53.
Impairment charges of $3.1 billion.
And the company pulling its earnings and revenue guidance for the rest of the year.
These are the lowlights of Macy’s latest earnings that came out on July 1st, 2020.
The earnings report was brutal for the retailer that’s been flailing for years now.
Macy’s stores were once one of the most recognized and admired retail brands in the world.
But from 2015 to today its fallen like a rock.
Macy’s stock hit its all-time high of $69.94 per share on July 24th. As of this writing its shares are selling at $6.38.
Since July 24th, 2015 to today on July 22nd, 2020 – or almost exactly 5 years later – its stocks fallen 90.9%.
At its height, the stock had a market cap of $24 billion.
Now it’s $1.98 billion.
This rapid fall is due to more people shopping online as the 2010’s progressed. And then accelerated in more recent years as companies like Amazon allowed people to buy stuff from home and have it delivered to their houses within days.
All without leaving your home, dealing with traffic, dealing with rude employees, dealing with other rude customers, and all the other negatives that come with shopping in stores.
In time its stock is likely to go to $0 if it’s not bought out or taken private before its inevitable bankruptcy.
This trend has been building for years and is known as the “Retail Apocalypse.”
The Retail Apocalypse is former great retailers like Sears, JC Penney, Macy’s, Bed Bath & Beyond and others losing out to people shopping online and collapsing.
It’s impossible to give you exact stats on the following due to the slow decline of individual companies in the retail industry.
But millions of jobs have been lost to this trend already. And thousands if not tens of thousands of stores have closed nationwide.
And it’s only going to continue with the rise of people shopping and then getting things delivered directly to their houses.
This has been going on for years… But retail store closures due to the coronavirus is accelerating this.
Since the start of the coronavirus pandemic in March the following retailers declared bankruptcy.
• JC Penney
• Brooks Brothers
• Lucky Brands
• J. Crew
• Neiman Marcus
And according to reports many other retailers are preparing to file for bankruptcy.
Including Macy’s as recently as early June 2020 when it narrowly avoided bankruptcy by taking on an added $4.5 billion worth of debt.
A few retails stores like Bed Bath & Beyond and Macy’s are hanging on as best they can by laying off employees and closing stores to conserve on costs.
But it won’t work.
Normally in these articles I show you profitability metrics, valuations, and more.
But frankly none of those matter in this case.
Macy’s continued decline into bankruptcy is inevitable.
Stay away from owning its stock.
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Disclosure – Jason Rivera is a 13+ year veteran value investor who now spends much of his time helping other investors earn higher than average investment returns safely. He does not have any holdings in any securities mentioned above and the article expresses his own opinions. He has no business relationship with any company mentioned above.