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Wednesday, November 12, 2008

Macy's Posts Loss as Consumers Tighten Belts

Donna Fuscaldo

FOXBusiness

Macy’s (M), the department-store operator, posted a loss for its third quarter, suffering from a clampdown on spending by consumers as job losses mount and the economy continues to suffer.

For its third quarter, Cincinnati-based Macy’s posted a loss of $4 million, or 10 cents a share, compared to a profit of $33 million, or eight cents a share, in the year-earlier third quarter. Excluding items, Macy’s had a loss of eight cents a share. Revenue came in at $5.49 billion, down from $5.9 billion a year ago.

Analysts, according to Thomson Reuters, had expected Macy’s to weigh in with a loss of 19 cents a share and revenue of $5.49 billion.

Macy’s backed its target for fourth-quarter earnings of $1.10 to $1.30 a share, excluding items and for same-store sales to be down 1% to 6%. Macy’s did warn that if sales continue to deteriorate, which it saw during the second half of the third quarter, results could come in at the lower end of its targets.

While Macy’s did back its forecast, the company had reduced it in October as consumers reined in on spending.

“Within this poor economic environment, Macy’s, continues to outperform most of our major competitors in same-store sales,” said Terry Lundgren, Chief Executive at Macy’s. ”Macy’s remains financially healthy, with strong cash flow, a solid balance sheet and ample borrowing capacity. We are committed to continuing to aggressively manage expenses and inventories consistent with planned sales levels.”