The New Berkshire Hathaway Just Made a Fresh Bet on a Department Store Everyone Wrote Off

The post The New Berkshire Hathaway Just Made a Fresh Bet on a Department Store Everyone Wrote Off appeared first on 24/7 Wall St..

Berkshire Hathaway (NYSE:BRK.B) disclosed a brand-new 3.04 million-share stake in Macy’s (NYSE:M) in its Q1 2026 13F filing, revealed on May 15, 2026, the first quarterly portfolio reshuffle under Greg Abel’s tenure as CEO. The position, valued at $55 million last quarter, lands in Macy’s alongside a new stake in Delta Air Lines (NYSE:DAL). While every other fund manager spent the quarter chasing AI infrastructure exposure, Abel’s opening move was a 166-year-old department store.

What Abel bought

The size is tiny by Berkshire standards, which is itself the tell. Buffett’s known fingerprint is a small initial position that gets scaled if the thesis holds, and Barron’s noted the size matches Buffett’s typical starter bites even as CNBC flagged that the actual decision-maker, between Buffett, Abel, and remaining portfolio manager Ted Weschler, is unclear.

The price paid, however, is clear. Macy’s traded at $10.67 a year ago and the entire equity could be had for a market cap well under $6 billion at the time of purchase. Since the filing dropped, the stock has run hard. Macy’s is up 21% over the past month and 135% over the past year.

The thesis hiding in plain sight

Macy’s fits precisely because it is a steady cash generator rather than a turnaround pitch. The Q2 FY27 report filed June 3, 2026 showed adjusted diluted EPS of $0.13 against a $0.03 estimate, revenue of $4.89 billion beating by 6.06%, and Bloomingdale’s posting a 10.2% comp, its seventh straight quarter of gains. CEO Tony Spring raised full-year guidance to net sales of $21.5 billion to $21.75 billion and adjusted EPS of $2.00 to $2.20. So the stock trades at roughly 12x forward earnings, carries a 2.99% dividend yield, and sits on a real estate portfolio whose value has been litigated by activists for years. There is also $1.1 billion remaining on a $2.0 billion buyback authorization.

The philosophical frame matches Delta. Both businesses generate cash, own hard assets, and trade at prices that reflect investor exhaustion rather than operating collapse. Abel inherited a cash pile north of $300 billion and his first deployment is into businesses Wall Street finds boring. That is a signal worth absorbing.

Should a retirement investor follow the trade

The candid answer is that the easy money has already been made. Anyone copying Berkshire on May 16 paid roughly 18% less than today’s print. The current setup is different. You are buying a department store after a 126.18% one-year run, at a forward multiple that is no longer obviously cheap, with tariff headwinds already hitting gross margins by 30 basis points and roughly $145 million in annual sales walking out the door from planned closures.

What is worth following is the framework. Abel’s Berkshire appears willing to underwrite businesses with durable cash generation and out-of-favor narratives, the same playbook that built the original conglomerate. For a retirement-focused investor, the takeaway is structural rather than tactical. Macy’s is a coupon-clipping equity now, paying a $0.1915 quarterly dividend while it executes Spring’s Reimagine 200 store-upgrade program. If the comps at the +2.4% Reimagine cohort hold across more locations, Berkshire’s basis looks brilliant. If they fade, you own a low-multiple retailer with real estate optionality. Either way, the framework is what bears copying here, while the entry window has closed.

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