If You Invested $1,000 In Macy's Stock One Year Ago, Here's How Much You'd Have Now

Investors who have owned stocks in the past year generally have experienced some decent gains. In fact, the SPDR S&P 500's SPY total return in the past 12 months is 12.8%. But there is no question some big-name stocks performed better than others along the way.

Macy's Big Year: One company that has been a spectacular investment in the past five years is department store retailer Macy's Inc M.

Macy’s is one of countless brick-and-mortar retailers that have been under pressure from Amazon.com, Inc. AMZN and other online retailers in recent years. Fortunately for Macy’s investors, the company’s strategy of trying to shrink its way to success may finally be gaining traction.

From 2010 to 2015, Macy’s closed 52 stores and opened just 12. In August 2016, Macy’s announced it would be closing 100 stores as their leases expired. In February 2020, Macy’s said it will be closing 125 stores and cutting about 2,000 jobs by the end of this year. Then in January 2021, Macy’s announced another 30 store closures, setting the company up to monetize another chunk of real estate.

In the past, investors have understandably been skeptical of Macy's strategy to reduce its footprint, shore up the company’s balance sheet and boost its same-store sales numbers. However, Macy's just reported a 27.8% increase in same-store sales from a year earlier, and 6.1% same-store sales growth compared to pre-pandemic January 2019, in the critical holiday shopping quarter.

Macy's digital sales were also up 12% year-over-year and 36% on a two-year basis, suggesting the company may finally have its business headed in the right direction after years of underperformance.

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At the beginning of 2020, Macy's shares were trading at $17.18. By the beginning of March of that year, the stock was down to around $13.30 as news of the coronavirus spreading in China prompted concerns about a U.S. pandemic.

Macy's ultimately bottomed at $4.38 during the pandemic-driven March sell-off. Fortunately for Macy's investors, the dip didn't last long. By June, Macy's shares were back above $10, and the stock finished 2020 at $11.25.

A recovery rally in the first quarter of 2021 sent Macy's soaring back above its pre-pandemic highs above $20, but the stock didn't stop there. An impressive sales recovery throughout 2021 had Macy's shares up to as high as $37.95 in November 2021.

Macy's In 2022, Beyond: This year began with a dip, as Macy's investors took some profits on the big rally in the closing weeks of 2021, and the stock is now back down under $25 amid broad market weakness so far in 2022.

Still, Macy's investors who bought a year ago and held on have generated an impressive return on their investment. In fact, $1,000 in Macy's stock purchased on February 22, 2021 would be worth about $1,739 today, assuming reinvested dividends.

Looking ahead, analysts are expecting new highs for Macy's in the next 12 months. The average price target among eight analysts covering the stock is $36.63, suggesting 49.69% upside from current levels.

Photo: Courtesy of Mike Mozart on Flickr