Most investors have been running away from Macy’s in 2026. But Greg Abel just ran toward it with $55 million of Berkshire Hathaway’s money.
The new Berkshire CEO made headlines Friday when the conglomerate’s Q1 2026 13F filing revealed a brand new 3.04 million-share stake in Macy’s (M) valued at approximately $55 million. The stock is down 15.56% year-to-date and trading near $18, a far cry from the department store’s former glory days, according to Yahoo Finance.
That gap between perception and underlying value is precisely what the Berkshire playbook has always been about. The world’s most famous value-investing machine, with $263 billion in managed 13F securities, according to WhaleWisdom, just decided that a 167-year-old American retail institution is worth a second look.
The question worth asking is not whether Berkshire is sentimental about department stores. It is whether the numbers actually support the bet.
Why Berkshire’s Abel made a $55M contrarian call on Macy’s
Macy’s shares had shed roughly 17% of their value in 2026 before Berkshire’s filing became public. That selloff pushed the stock to a price-to-earnings multiple of approximately 8 times, below what analysts considered fair value, according to Yahoo Finance reporting.
For a company generating $21.8 billion in annual revenue, 450 locations, and 94,000 employees, according to Wikipedia, that’s a valuation reflecting maximum pessimism rather than measured risk assessment.
My review of Macy’s balance sheetfundamentals reveals a more interesting picture than the stock price suggests. The company ended fiscal year 2025 with $1.2 billion in cash and equivalents, generated $1.4 billion in operating cash flow, and produced $800 million in free cash flow, according to the company’s March 18 earnings release. The quarterly dividend of 19.15 cents per share is also intact.
Then there is the real estate. Macy’s owns or controls premium retail locations in high-traffic markets across the United States – a physical asset base that has consistently been cited by analysts as worth significantly more than the stock’s market capitalization implies. This is the kind of asset-backed safety net that Benjamin Graham, an American economist and financial investor who mentored Warren Buffett, would have recognized immediately. It appears Abel sees it too.
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Macy’s “Bold New Chapter” turnaround is showing up in the financial results
Before writing Macy’s off as a value trap, the recent operating results deserve an honest read.
Macy’s fiscal fourth-quarter 2025 and full-year results reported on March 18:
- Q4 net sales of $7.6 billion, exceeding guidance
- Q4 comparable sales up 1.8%, above guidance
- Q4 Bloomingdale’s comparable sales up 9.9% – the brand’s best holiday performance on record
- Full-year comparable sales up 1.5%, returning to positive territory
- Full-year adjusted diluted EPS of $2.32, exceeding the most recent guidance range
- Returned $448 million to shareholders through dividends and buybacks
Source: Macy’s, Inc. Fourth Quarter and Fiscal Year 2025 Results
The “Bold New Chapter” strategy at the core of CEO Tony Spring’s turnaround plan is straightforward: close roughly 150 underperforming locations, reinvest in 350 profitable go-forward stores, and aggressively grow Bloomingdale’s and Bluemercury.
Spring also announced the expansion of strategic initiatives to 75 additional stores under a new “Reimagine 200” program for 2026, according to their earnings statement.
Related: Warren Buffett doubles down on stock market message for 2026
“Bloomingdale’s exceptional performance underscores its ability to elevate the customer experience and capture demand across premium contemporary to luxury businesses,” Tony Spring, CEO, said in the March earnings release.
That last point matters. Bloomingdale’s at 9.9% comparable sales growth is not the story of a dying retail brand. It is the story of a premium brand inside a struggling parent, and it is the kind of hidden value that a disciplined value investor cannot ignore.
What Macy’s buy reveals about how Greg Abel is reshaping Berkshire’s portfolio
The Macy’s stake does not exist in isolation. Abel’s first major 13F reveals a portfolio in deliberate transition.
Berkshire has been exiting capital-light digital payments and technology names – including trimming or exiting Visa, Mastercard, and Amazon – to reallocate into undervalued, asset-backed businesses with tangible earnings power. Delta Air Lines at $2.65 billion and Macy’s at $55 million both fit the same philosophical framework: real assets, real cash flows, and prices that reflect investor fatigue rather than business deterioration.
More Retail:
- Another mall retailer quietly closed over 150 locations
- Ultra-wealthy shoppers flock to this 63-year-old rugged retailer
- 72-year-old mall retailers to close more stores in 2026
This is the Abel version of the Berkshire playbook. It is not dramatically different from Buffett’s, but calibrated for a market where the most obvious AI and tech bets are already richly priced and genuine value lives in overlooked corners.
Macy’s 2026 guidance directly acknowledges the headwinds. The company expects tariff pressure to be most concentrated in the first quarter, with second-half conditions improving, according to the earnings statement. Management is investing in the Reimagine 200 locations to support long-term growth while maintaining financial flexibility to navigate the uncertain macro environment.
Berkshire sees something the broader market is entirely discounting. History suggests that when Berkshire moves with conviction on a beaten-down American brand, the patient investor gets rewarded eventually. We say, more money is made by sitting on your hands. Warren had several times proved that with Berkshire.
Related: Warren Buffet’s Berkshire makes major $2.65B move in surging stock
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