* Expects full-year same-store sales growth of 1.5-2 pct
* 3rd-qtr earnings $0.80/share vs est $0.86
* Says back-to-school season "extremely strong" so far
* Shares fall as much as 6 pct
(Adds details from conference call, CFO comment; updates
By Devika Krishna Kumar
Aug 13 Macy's Inc cut its full-year
same-store sales forecast, after second-quarter sales failed to
make up for weakness in the first quarter when harsh winter
weather kept shoppers away.
Macy's earnings for the quarter ended Aug. 2 also missed the
average analyst estimate as the company discounted heavily to
win business, squeezing gross margins.
The company said on Wednesday that margins would be flat to
slightly down for the rest of the year.
Shares of the company, which also owns the high-end
Bloomingdale's chain, fell as much as 6 percent.
"...Many customers still are not feeling comfortable about
spending more in an uncertain economic environment," Chief
Executive Terry Lundgren said in a statement.
U.S. retail sales unexpectedly stalled in July, data showed
on Wednesday, pointing to some loss of momentum in the economy.
The sales were the weakest since January.
Shares of Macy's rivals Kohl's Corp and Nordstorm
Inc were down 1.8 percent and 1.2 percent respectively.
Macy's said it expects same-store sales to increase 1.5
percent to 2 percent for the full year. It had earlier forecast
an increase of 2.5 percent to 3 percent.
The company, which has remodeled many stores, including its
flagship Herald Square store in Manhattan, plans more promotions
and discounts for the back-to-school season.
Weaker categories in the second quarter included women's and
men's sportswear as well as non-athletic shoes, Chief Financial
Officer Karen Hoguet said on a conference call.
However, Hoguet said the back-to-school season had been
"extremely strong" so far.
"Our juniors business, we really think now has turned around
and has been terrific," she said.
The company stuck to its full-year earnings forecast of
$4.40 to $4.50 per share.
Analysts remained positive on Macy's long-term prospects
despite the disappointing quarter.
"Its focus on improving the merchandise assortment while
enhancing the customer experience both in stores and online will
likely continue to drive strong results," Stifel Nicolaus
analysts wrote in a research note.
At least four brokerages including Stifel reiterated their
"buy" or equivalent ratings on the company's stock.
Macy's has spent nearly $2 billion on IT and e-commerce
projects over the past five years and has won over customers
with services such as in-store pickups for online orders and
The ship-from-store service allows customers to order from
another Macy's store if the item is not available and have it
sent to their home. This helps Macy's keep a tight hold on
inventories, especially at its smaller stores.
Same-store sales, which include sales at macys.com and
bloomingdales.com, rose 3.4 percent in the second quarter.
Net income rose to $292 million, or 80 cents per share, from
$281 million, or 72 cents per share, a year earlier.
Total sales rose 3.3 percent to $6.27 billion, after
declining about 2 percent in each of the previous two quarters.
Analysts on average had expected earnings of 86 cents per
share on revenue of $6.3 billion, according to Thomson Reuters
Macy's shares were down 4.3 percent at $57.15 in late
(Editing by Don Sebastian)