Could Toys ‘R’ Us Boost Macy’s Stock as It Preps for Holiday Resurgence?

Toys R Us is store
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Almost five years after declaring bankruptcy, Toys “R” Us was given a second life after being acquired by Macy’s parent company, WHP Global, in March 2021. Big rollout plans had been promised and are now coming to fruition. Thankfully, for kids of all ages, it seems you can’t keep a good giraffe down.

On Monday, Macy’s announced it will be opening brick-and-mortar Toys “R” Us spaces inside all of its American stores by October 15. The venerable toy brand began installing in-store outlets, ranging from 1,000 to 10,000 square feet, last year.

“Our toy business grew exponentially in the past year, with many families looking to inspire their children’s imagination and create meaningful moments together,” said Nata Dvir, Macy’s chief merchandising officer. “Toys ‘R’ Us is a globally recognized leader in children’s toys and our partnership allows Macy’s to significantly expand our footprint in that category, while creating more occasions for customers to shop with us across their lifestyles.”

Resurrecting the Toys “R” Us brand might help Macy’s “significantly expand” more than just its toy footprint. In a recent Insider Monkey article, billionaire David Tepper listed his 10 value stocks to buy and included Macy’s among them.

Tepper not only outlined Macy’s strong Q1 2022 performance numbers (earnings and revenue that exceeded market estimates, quarterly sales up 13.9% year-over-year, a net income margin of 6.21%), but specifically mentioned the partnership as an initiative that could prove financially fruitful for the retail giant.

Macy’s stock price is up nearly 3% Tuesday morning.

U.S. toy sales have seen a remarkable increase during the pandemic, rising 13%, from $25.4 billion in 2020 to $28.6 billion in 2021, according to the NPD Group. Per Business Wire, Macy’s toy sales were 15 times higher in the first quarter of 2022 than in the comparable period prior to it being acquired by WHP Global.

Investing for Everyone

In its original press release announcing the partnership, Macy’s stated that it would be rolling out Toys “R” Us shops inside more than 400 of its stores in 2022. However, according to Consumer Affairs, all 509 Macy’s stores will be ready for toy business on October 15.

To celebrate the store openings, each location will reportedly feature nine days of events, including daily giveaways from brands like Barbie and LEGO and family-friendly activities. The fun starts October 15 and runs through October 23.

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