(Corrects Wall Street FY estimate for Macy's to $3.81/shr from
$3.41. This error appeared in earlier versions of this story.)
* Macy's sees fiscal-yr 2013 same-store sales up 3.5 pct
* Macy's sees fiscal-yr EPS $3.90-$3.95 vs Wall St $3.81
* Saks sees full-year 2013 same-store sales up 3-5 pct
* Saks shares fall nearly 1 pct, Macy's shares up 2.5 pct
By Phil Wahba
Feb 26 Department store chains Macy's Inc
and Saks Inc both reported better-than-expected holiday
season results and forecast further sales gains this year,
banking on investments in technology and e-commerce to pay off.
Macy's has put a lot of money into updating its inventory
management systems in recent years, allowing it for the first
time last holiday season to integrate nearly 300 of its stores
to help fill online orders, speeding delivery and reducing the
amount of merchandise that ends up in the clearance bin.
Macy's Chief Financial Officer Karen Hoguet told Wall Street
analysts she expects that number to rise to 500 stores by the
That online coordination helped Macy's, which also operates
the Bloomingdale's chain, report a better-than-expected profit.
Macy's also said it expects the so-called "omni-channel"
approach of blending stores and e-commerce to help it reach a
3.5 percent rise in same-store sales for the fiscal year that
began this month.
Saks Inc, trying to catch up to Macy's and Nordstrom
Inc, plans to begin using its stores to help fill online
orders this year on the way to achieving what it expects to be a
3 percent to 5 percent jump in same-store sales.
Saks is about halfway through a three-year $100 million
project to update its inventory management, and Chief Executive
Steve Sadove warned Wall Street that such investments would
pinch profits but were needed to keep pace with competitors and
"There's no question in my mind that omni-channel is the
future of where retail is, that there is a brick-and-mortar play
and a dot-com play," Sadove told analysts on a conference call.
Lazard Capital Markets analyst Jennifer Davis agreed, and
said in a note that Saks' efforts would pay off.
Last year, Saks' investments included a new robotic
e-commerce order fulfillment center in Tennessee.
Still, Sadove warned of a "somewhat volatile" 2013 for the
luxury sector as higher tax rates on more affluent shoppers take
Saks' shares were down about 12 cents, or nearly 1 percent
in morning trading, while Macy's shares were up 2.5 percent.
HAPPY HOLIDAYS BUT WORRIES ABOUT HIGHER TAXES
Saks reported revenue rose 5.5 percent to $976.6 million for
the three months that ended Feb. 2. Same-store sales rose 0.7
percent, better than the 0.3 percent decline Wall Street was
Saks has closed 10 department stores since 2010 and is
looking to shut a few more. It currently operates 43, in
addition to its lower-priced Saks Off Fifth chain.
Saks' fourth-quarter results were affected by Hurricane
Sandy, which disrupted many consumers' lives in November. Saks
gets about 20 percent of sales from its Manhattan flagship and
has many locations in the U.S. Northeast, leaving it more
exposed to the storm's disruption than some rivals.
Saks earned $20.4 million, or 13 cents per share, for the
quarter that ended Feb. 2, versus a year-earlier profit of $40
million, or 21 cents per share.
Excluding store closing expenses, asset impairment charges
and other items, Saks had a profit of 17 cents per share. Wall
Street analysts were expecting 15 cents, according to Thomson
Macy's reported net income of $730 million, or $1.83 per
share for the quarter that ended Feb. 2, helped by sales in
January that CFO Hoguet told analysts were strong enough to help
it overcame a slow start to the quarter.
Excluding pretax expenses, Macy's earned $2.05 a share,
while analysts, on average, were expecting $1.99 a share.
Macy's said it expected same-store sales to rise about 3.5
percent during the year and forecast earnings of $3.90 to $3.95
a share, compared with an average Wall Street estimate of $3.81,
according to Thomson Reuters I/B/E/S.
(Additional reporting by Nivedita Bhattacharjee and Brad
Dorfman in Chicago.; Editing by Maureen Bavdek and Gerald E.