Macy's posts lower profit, cuts full-year outlook
NEW YORK (Reuters) - Macy's Inc (M.N) reported a 1.4 percent decline in quarterly profit and cut its fiscal-year earnings forecast, warning that cutbacks in U.S. consumer spending could push sales down further at its stores.
The department store operator said it expected a profit of $1.70 to $1.85 per share before one-time items for the year, down from its outlook of $1.85 to $2.15 in May. Analysts on average had expected $1.85, according to Reuters Estimates.
Macy's, also home to the upscale Bloomingdale's chain, said it expected fall sales at stores open at least one year to be flat to down 1 percent, resulting in a decline of 1 percent to 1.6 percent for the full year.
The company's shares fell 2 percent, but analysts said the outlook was not as bad as some investors had feared.
"The stock has been trading considerably weaker than peers," said Edward Jones retail analyst Stephanie Hoff, who has a "buy" rating on the stock.
Net profit fell to $73 million, or 17 cents per share, in the second quarter ended August 2 from $74 million, or 16 cents a share, a year earlier, when there were more shares outstanding.
Excluding unusual items, Macy's said it earned 29 cents per share. Analysts had forecast 19 cents.
Macy's is trying to trim costs and improve sales, which have suffered in a weak U.S. economy as high gasoline and food prices force shoppers to rein in their spending.
Macy's also said on Wednesday that it had hired data analysis firm dunnhumbyUSA to find ways to boost sales, which fell 3 percent to $5.72 billion in the second quarter. Same-store sales declined 2.1 percent.
Gross margin was up to 41.5 percent from 40.5 percent as Macy's controlled inventory.
Macy's has consolidated several regional divisions to cut costs and improve sales at its existing stores, a move that cost it $26 million in the second quarter.
Quarterly results also suffered because of noncash asset-impairment charges of $50 million from the purchase of May Department Stores in 2005.
Macy's shares were down 41 cents at $19.86 in morning New York Stock Exchange trading.
(Editing by John Wallace and Lisa Von Ahn)
