Macy’s Spinoff? What Investors Should Know About a Potential Split-Up

Today’s been a very good day for investors in Macy’s (NYSE:M). Currently, Macy’s stock is up more than 20% on intense investor interest around a potential Macy’s spinoff. That is, as intense as one could expect for a department store retailer.

Macy's (M) logo on storefront in city with white sky behind
Source: Joe Tabacca /

Notably, Macy’s reported much better-than-expected earnings today. Both revenue and earnings beat analyst estimates, propelling this stock higher. The company noted comparable sales growth of more than 35%. Analysts were expecting just over 29% growth on the top line.

On the bottom line, this beat was even more pronounced. Adjusted earnings per share came in at $1.23, compared to estimates of only 31 cents. Accordingly, many investors bullish on M stock remain confident that this impressive economic environment can continue through Q4. The company raised its expectations for full-year 2021, supporting this view.

However, there were a couple of other bombshells dropped during this earnings report that added fuel to this fire. Let’s dive into what investors are looking at right now with Macy’s.

Potential Macy’s Spinoff and Digital Marketplace Boosting M Stock

A top and bottom line beat along with an outlook raise is certainly enough for most stocks to see a marked rise in interest. However, there’s an additional catalyst investors appear to have their eye on with Macy’s right now.

The company suggested it could be looking to launch a digital marketplace in 2022. Few details were given with respect to what this digital marketplace would look like. However, the company did note that it had hired consulting firm AlixPartners to review Macy’s business structure.

What that means is unclear. However, many investors believe this could be a step toward restructuring the company and spinning off digital operations from the company’s physical stores. Vocal activist investors have been pressuring management to make such a move. Accordingly, this appears to be a step in this direction.

Certainly, nothing is set in stone. And if anything, Macy’s is still in the preliminary stages of reviewing such a move. However, investors appear to be bullish on the value that could be created from such a spinoff. Accordingly, M stock is one that’s trending today — which is a rather unusual, but welcome, surprise for investors.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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