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Macy's swings to loss in quarter

November 13, 2008|the associated press

Macy's Inc. swung to a loss in its fiscal third quarter as sales dropped more than 7%, with the retailer saying the holiday season would be a nail-biter and it saw no benefit in being optimistic for next year.

The department store operator also said Wednesday that it slashed its budget for 2009 capital expenditures by almost half as it navigated the deteriorating economy. Macy's reiterated its profit outlook for the year but said it would be at the low end of the range if current sales trends continued.

As for the upcoming holiday season, "it will be a nail-biter," Chief Financial Officer Karen Hoguet told analysts in a conference call. She also noted that Macy's planned to have inventories for spring and fall 2009 below last year's levels, saying, "We don't see an upside in being optimistic."

Macy's said it lost $44 million, or 10 cents a share, in the quarter ended Nov. 1, after a profit of $33 million, or 8 cents, a year earlier. Excluding costs related to the consolidation of three regional divisions that totaled $16 million -- $10 million after tax or 2 cents a share -- the loss was 8 cents a share.

Sales fell to $5.49 billion; analysts surveyed by Thomson Reuters were expecting, on average, a loss of 19 cents a share on $5.49 billion in sales.

Shares of Cincinnati-based Macy's fell $1.04, or 11.1%, to $8.37 after the earnings news.

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