Department store giant Macy's Inc. on Tuesday posted a better-than-expected profit for the fourth quarter that was a vast improvement from the huge loss it reported a year earlier.
For the quarter ended Jan. 30, Macy's reported a profit of $466 million, or $1.10 a share, compared with a loss of $4.77 billion, or $11.33, in the same quarter a year earlier, a result of a write-down in assets.
Chief executive Terry Lundgren said the results were driven by success from the company's new local merchandising initiative, My Macy's; a 26.6% increase in online sales; and a rebound at its luxury Bloomingdale's chain. He added that the Cincinnati company also reduced expenses and improved margins.
"Our company initiated unprecedented change in 2009 as we adopted a unified organization structure and rolled out our My Macy's localization strategy amid the worst economic environment in decades," Lundgren said in a statement.
But sales in the fourth quarter still declined 1.1%, to $7.85 billion from $7.93 billion in the year-earlier period. Sales at stores open at least a year, known as same-store sales and considered an important measure of retail health, were down 0.8%.
Macy's has been trying to reverse a decades-long decline in the department store business model that has seen consumers migrate to big-box discounters, free-standing stores and the Internet. The company operates about 800 Macy's and 40 Bloomingdale's stores.
During an interview last week with The Times, Lundgren said he still expected a difficult economy this year with "lots of head winds" facing consumer spending, but said Macy's was in a good position to grab market share from competitors.
"I believe the industry in general will continue to be challenged," he said. "But in our case we have a stronghold on the relationship with the customer."
Shares of Macy's declined 4 cents, or 0.2%, to $18.43 in morning trading.