What Happened?
Shares of department store chain Macy’s (NYSE: M) jumped 4.3% in the morning session after the company announced positive early results for its cash tender offer and upsized the deal.
The retailer's subsidiary, Macy's Retail Holdings, LLC, increased the maximum combined aggregate purchase price for its outstanding notes and debentures to $250 million. A debt tender offer is a process where a company offers to repurchase some of its outstanding debt from investors before it matures. This action was often viewed positively by investors as a sign of financial strength and confidence in future cash flows. By reducing its debt, the company worked to lower its future interest payments and strengthen its balance sheet, which likely contributed to the positive investor sentiment.
After the initial pop the shares cooled down to $13.55, up 3.6% from previous close.
Is now the time to buy Macy's? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Macy’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 11 months ago when the stock dropped 14% on the news that the company reported weak second quarter earnings. Its full-year revenue and earnings guidance were lowered, missing Wall Street's estimates. Management noted that the new guidance reflects "a more discriminating consumer and heightened promotional environment relative to its prior expectations."
On the other hand, revenue came in roughly in line with expectations during the quarter, while EPS beat by a more convincing margin. Overall, this was a weaker quarter due to the outlook.
Macy's is down 18.2% since the beginning of the year, and at $13.55 per share, it is trading 25.2% below its 52-week high of $18.10 from December 2024. Investors who bought $1,000 worth of Macy’s shares 5 years ago would now be looking at an investment worth $2,107.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
