David Einhorn’s Greenlight Capital cut its losses on Macy’s Inc., selling its stake after the department store pointed to a rockier year ahead than initially expected.

“We sold Macy’s for a loss after the company announced a significant reduction in full-year 2016 earnings,” Greenlight said in a letter to its investors. “This announcement invalidated our thesis that 2016 earnings would benefit from easy comparisons later in the year. We exited the position at $32.08.” A spokesman for could not immediately be reached for comment Tuesday, but the letter was published in full on valuewalk.com.

Einhorn revealed his stake in Macy’s in January, telling investors that he paid an average price of $45.69 and noting that the retailer was a takeover candidate.

“Earlier in 2015, with the stock at $70, an activist argued that the store real estate could be separated to unleash a valuation in excess of $125 per share,” Einhorn wrote in January, referring to activist Jeffrey Smith of Starboard Value.

Macy’s nixed the idea of spinning off its real estate into a separate trust, but Einhorn wrote, “It wouldn’t surprise us if a private equity firm teamed up with a REIT to buy the company and unlock the value privately.”

Apparently, the hedge fund was also betting that it would be relatively easy for the company to beat last year’s numbers.

In May, Macy’s projected that its 2016 comparable sales would fall by 3 percent to 4 percent, down from the roughly 1 percent drop previously projected.

Macy’s pegged its adjusted earnings per share at $3.15 to $3.40, down from the $3.80 to $3.90 seen earlier.

Macy’s is working to reenergize its business and is also in the midst of a corner office switch.

Longtime chief executive officer Terry J. Lundgren said last month he would pass the ceo reins to Macy’s veteran Jeff Gennette.

“This is the time for us to be laser-focused on what is most important to our customers, and how we can best deliver the shopping experience that will secure our position as the premier omnichannel retailer of the future,” Gennette said.

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