Jan 8 Department store operator Macy's Inc
on Wednesday reported strong holiday season sales and gave a
preliminary forecast for 2014 that suggests it would continue to
outpace its rivals.
The retailer also announced plans to cut about 2,500 jobs,
or 1.4 percent of its U.S. workforce, but said it expects to add
positions for its growing online business, leaving overall
staffing levels unchanged at around 175,000. Its shares rose 5
percent after the bell.
Macy's said comparable sales, which include online sales and
sales at stores open at least a year, rose 3.6 percent in
November and December, roughly the same pace as in the third
quarter, when it easily outperformed rivals from Kohl's Corp
and J.C. Penney Co Inc to Target Corp
and Wal-Mart Stores Inc in terms of sales growth. Data
firm ShopperTrak on Wednesday said holiday season sales at
stores rose 2.7 percent across the industry.
Macy's, which also operates the high-end Bloomingdale's
chain, forecast a profit of $4.40 to $4.50 per share for next
fiscal year, while analysts were only expecting $3.87, according
to Thomson Reuters I/B/E/S/. Macy's expects comparable sales to
grow 2.5 percent to 3 percent next fiscal year, which starts in
The job cuts were part of a new cost-cutting plan that is
expected to save the retailer about $100 million annually. That
would include combining some store districts and some jobs at
its central office.
Macy's expects to incur charges of between $120 million and
$135 million this quarter for the cost-cutting plan.
In addition to benefitting from brisk luxury sales that
lifted business at Bloomingdale's, Macy's has been able to gain
an advantage over rivals Penney and Kohl's by using hundreds of
its stores to help it fill online orders. It was also more
aggressive in wooing shoppers on a more modest budget during the
holiday season, helping it compete in the most discount-driven
season since the recession.
Going into the fall and holiday season, Macy's increased its
selection of lower-priced items and boosted advertising and
in-store signage during sales events to tout its least-expensive
merchandise. Macy's, which caters to a middle-class clientele,
offers a broad range merchandise, from $10 cotton T-shirts to
Louis Vuitton handbags.