Macy's sees $44 million in third quarter |
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| Friday, 14 November 2008 | |
.jpg) Macy's Inc. reported a loss of $44 million in the third quarter and said it would cut capital expenses by as much as 45 percent, as sales fell on poor consumer confidence. The loss of $44 million compared with a profit of $33 million in the same quarter a year ago. The loss is excluding costs
related to the consolidation of three regional divisions that totaled $16 million, which was $10 million after tax. Sales fell to $5.5 billion from $5.9 billion.
As for the upcoming holiday season, "it will be a nailbiter," Chief Financial Officer Karen Hoguet said. She 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." Chief executive officer Terry Lundgren said Macy's continues to outperform most of its competitors in same-store sales. He added that the retailer's companywide program to localize merchandise mix, called My Macy's, is delivering promising early results with good signs for 2009. "Thus we are staying focused on our priorities for offering unique and differentiated merchandise assortments, delivering great value and service to our customers, and reaching out with creative marketing that positions Macy's and Bloomingdale's as preferred shopping destinations for the holidays," he said. "Macy's Inc. remains financially healthy, with strong cash flow, a solid balance sheet and ample borrowing capacity." Lundgren added the retailer will continue to aggressively manage expenses and inventories, and has reduced its 2009 capital expenditures budget to $550 million to $600 million, from about $1 billion. That compares with roughly $950 million in 2008, he said. Macy's announced a reorganization in February that dispersed more managers to local markets. As part of the plan, the company combined three regional divisions and slashed about 2,300 management jobs. image: Macy's |
The department store operator said it slashed its budget for 2009 capital expenditures by almost half as it navigates 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 continue.