Macy's cuts quarterly profit outlook on weak sales

ATLANTA (Reuters) - Retailer Macy's Inc. (M.N) cut its quarterly profit outlook on Thursday as June same-store sales came in lower than expected, and its shares fell nearly 4 percent.

The company, which has said that sales at former May stores acquired in 2005 have been disappointing, forecast earnings of 20 cents to 30 cents per share, excluding merger integration costs, for the second quarter that began on May 6. Its previous profit forecast was 35 cents to 45 cents a share.

Before the profit warning, analysts were expecting earnings of 41 cents a share, according to Reuters Estimates.

For the five weeks ended July 7, sales at stores open at least one full fiscal year fell 2.7 percent, worse than analysts' expectation of a 1.9 percent drop as well as Macy's own forecast for a fall of up to 2 percent.

A Macy's spokesman declined to comment on the sales results.

June marked the fifth-straight month that the operator of the Macy's and Bloomingdale's chains posted same-store sales that missed expectations.

The Cincinnati-based company said total sales for the June period fell 1.9 percent to $2.32 billion.

Macy's, formerly known as Federated Department Stores, said it expected July same-store sales to be flat to down 3 percent.

The company, which has been the subject of takeover speculation in recent weeks, said during the month of May that it would boost promotions in a bid to spur traffic at former May stores it acquired in 2005 and converted to the Macy's name last year.

Macy's shares were down $1.50, or 3.7 percent, at $38.91 in morning New York Stock Exchange trading.

(Reporting by Karen Jacobs)