UPDATE 3-Macy's fears prolonged retail downturn

* Q3 loss 10 cents/share

* Q3 sales $5.49 billion, down 7 percent

* Shares down 5 percent (Adds conference call, analysts, share move updates)

By Sarah Coffey

NEW YORK, Nov 12 (Reuters) - Macy's said it is concerned U.S. shoppers will continue to curb spending and avoid all but the most crucial purchases well into spring of next year as the economic crisis deepens, sending its shares down 5 percent.

"We are increasingly concerned that we won't see the improvement that we had anticipated as recently as a month ago," Macy's Chief Financial Officer Karen Hoguet said during a conference call with analysts.

"That doesn't mean we are expecting further deterioration, but we may not get as much improvement as we had hoped. But until we are through the next 60 days, we won't know how to guide you about 2009," Hoguet said.

Macy's reported a quarterly loss on Wednesday but beat Wall Street estimates as it kept a tight reign on inventory and bumped up promotions entering the critical holiday season, a time when most retailers earn the bulk of their yearly profit.

The better-than-expected results at Macy's came on the same morning that consumer electronics retailer Best Buy Co Inc (BBY.N) slashed its fiscal 2009 earnings forecast. Best Buy shares were down 7 percent in afternoon trade. [ID:nN12264327]

U.S. consumers have stayed away from department stores for months as rising food and fuel prices pressured household budgets hampered by the housing market slump, job losses and the credit crunch.

Since the beginning of October, Macy's shares have fallen 47 percent, while the Standard & Poor's retail index .RLX is down 28 percent.

Macy's, which runs both its namesake department stores and the upscale Bloomingdale's chain, reported a loss of $44 million, or 10 cents per share, for the third quarter ended Nov. 1, compared with net profit of $33 million, or 8 cents per share, a year earlier.

Excluding division consolidation costs of 2 cents per share, the quarterly loss was 8 cents per share. Analysts, on average, were expecting a loss of 19 cents per share, according to Reuters Estimates.

Sales fell 7 percent to $5.49 billion, and sales at stores open at least a year, or same-store sales, were down 6 percent. Gross margin edged higher to 39.5 percent from 39.3 percent.

CUSTOMERS BUYING LESS, STICKING TO NECESSITIES

The average amount spent per customer fell in October "for the first time I can remember," Hoguet said, as shoppers scaled back spending amid the worst financial crisis since the Great Depression.