Macy's Imploding, Catching Down To Sears & Penney's

About that resilient consumer and the tremendously low unemployment rate of 5%, maybe someone should tell Macy’s why their sales and profits continue to plummet. Their stock is down 13% today to a three year low of $40. It has fallen 45% in the last four months. It seems the market doesn’t like it when your sales fall 5.2% over last year and your profits crash by 46%. And this is after you close a bunch of your worst performing stores. I have a feeling they might be announcing the closure of another 100 stores after this upcoming disastrous Christmas season.

It was interesting that when I looked for their earnings announcement link on Marketwatch, it was no where to be found. So I went to their website, and now I know why they don’t want the results too widely viewed. It’s much worse than the headlines reveal. When you examine their balance sheet and cash flow statement, you see the looming disaster on the horizon. The executives running this retail titanic might be the dumbest fuckers on earth.

Let’s examine their brilliant strategic moves:

They have burned through $574 million of cash in the last year.

Despite sales FALLING by 5.2%, these idiots have increased their inventory 4.6% or $356 million. Get ready for some 80% off sales at Macy’s. That should do wonders for margins.

They have increased their short term debt by $781 million. That means they owe that within the next year, while only having $474 million of cash on hand. And this is while entering a holiday season guaranteed to be awful.

This company has more than double the amount of debt to equity.

And now for the cherry on top. The greedy blithering idiot CEO of this sinking ship borrowed money to buy back 31.6 million shares at an average price of $57 per share. He bought back $1.8 billion of stock in order to boost EPS and his own executive compensation. As I mentioned earlier, the stock is at $40 today. He lost $537 million of shareholder money with this inexplicably idiotic move. And this was after buying back $1.5 billion of stock in the previous year. This dude deserves a big fat fucking raise.