Macy’s Stock Has Rallied This Year — But Here's Why One Fund Cut 6.7 Million Shares

On November 14, Cooper Creek Partners Management LLC disclosed a major sale of Macy's shares in the third quarter, according to a new SEC filing.

What Happened

According to a Securities and Exchange Commission (SEC) filing published November 14, Cooper Creek Partners Management LLC sold nearly 6.7 million shares of Macy's (NYSE:M) in the third quarter, contributing to the overall value of the position falling by about $73 million. The remaining stake stands at 740,517 shares, valued at $13.3 million as of September 30.

What Else to Know

The fund’s sale leaves Macy's as 0.4% of reported AUM, which places it outside the fund's top five holdings. The position was previously 2.7% of the fund's AUM as of the prior quarter.

Top holdings after the filing:

• NYSE:OI: $130.5 million (4.9% of AUM)
• NASDAQ:NWL: $130.2 million (4.9% of AUM)
• NYSE:CXW: $129.7 million (4.9% of AUM)
• NYSE:BBWI: $129 million (4.8% of AUM)
• NYSE:AAP: $107 million (4% of AUM)

As of Friday, Macy's shares were priced at $22.36, up 40% over the past year and well outperforming the S&P 500's 14% gain in the same period.

Company Overview

Company Snapshot

Macy's is a leading U.S. department store operator with a significant national footprint and a diversified brand portfolio. The company leverages an omni-channel strategy to integrate in-store and digital experiences, driving sales across multiple consumer segments. More specifically, it offers apparel, accessories, cosmetics, home furnishings, and other consumer goods through department stores, websites, and mobile applications. The retailer targets a broad consumer base in the United States and select international markets, serving both value- and premium-oriented shoppers.

Foolish Take

Macy’s has staged a sharp rebound since the spring, demonstrated by stronger-than-expected second-quarter earnings (released in September), yet Cooper Creek opted to dramatically reduce exposure. With the sharp rally in mind, the move could suggest the fund is rotating into opportunities with more payoff potential rather than expressing a view that the Macy's recovery is over.

The retailer's latest results underscore why sentiment improved this year. Second-quarter net sales of $4.8 billion beat guidance, while adjusted earnings per share came in at $0.41—also above expectations. Comparable sales grew across all banners (marking the best such growth in 12 quarters), with Bluemercury, for example, posting its 18th straight quarter of gains. The company also returned $100 million to shareholders during the first half of the year through an equal split of dividends and share repurchases.

For long-term investors, Macy’s remains a cyclical name tied to consumer strength—but its improving balance sheet, better inventory discipline, and multi-brand omnichannel footing could support more durable performance than its reputation suggests.

Glossary

Assets Under Management (AUM): The total market value of investments managed by a fund or investment firm.
Reportable U.S. equity assets: U.S. stocks that a fund must disclose in regulatory filings, typically large or significant holdings.
Stake: The ownership interest or amount of shares held in a company by an investor or fund.
Top holdings: The largest investments in a fund's portfolio, usually ranked by market value.
Omni-channel: A retail strategy integrating physical stores, websites, and mobile apps for a seamless customer experience.
Outperforming: Achieving better returns or results than a benchmark or comparable investment, such as the S&P 500.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.