R. H. Macy & Co., suffering from the consumer spending slowdown in its East and West Coast markets, Tuesday reported an unexpectedly big loss of $100.9 million for its third quarter.
The New York-based retailer, which owns the Bullock's and I. Magnin stores in Southern California, posted a deficit of $63.1 million in the same quarter last year. The widened loss, the company's biggest in nearly three years, came on sales that fell 6.8% to $1.39 billion in the quarter that ended May 4.
It was a reversal from the recent improvement in Macy's results. In the second quarter, the retailer posted earnings of $78 million after a one-time gain, its first profit in two years.
Macy's loss was "much, much steeper than anticipated, especially since the company has been very upbeat lately about its long-term prospects," said Barbara Wedelstaedt, an analyst with Duff & Phelps in Chicago.
Wedelstaedt blamed the results on a combination of the weakened economy and Macy's increased expenses for advertising and other activities. But she said that debt-burdened Macy, which over the past year has worked hard to maintain the confidence of its suppliers and trim its losses, will continue to have their support.
She cited, among other things, the more than $200 million in fresh capital that Macy has attracted from equity investors since late last year and the recent sale of the company's credit card subsidiaries to a unit of General Electric. As a result, Macy's annual interest costs have been reduced by $213 million over the last year.
In a prepared statement, Macy called the quarterly results unsatisfactory. The company cited efforts it is making to boost its sales, including a credit card promotion and its stepped-up television advertising.
Macy also noted previously announced plans to add 11 stores, including five Bullock's locations in Southern California, over the next five years and to renovate other stores.
For the nine months ended May 4, Macy has posted losses of $79.4 million on sales of $5.13 billion.