By Chelsey Dulaney
Macy's Inc. said profit edged down in its holiday quarter on
sluggish sales growth, while the retailer also gave a muted outlook
for 2015.
Adjusted earnings for the latest quarter narrowly topped
expectations, while the top line came in just below forecasts.
Macy's projected per-share earnings of $4.70 to $4.80 for the
full year, just missing the $4.84 analysts had expected, according
to Thomson Reuters. Macy's forecast sales growth of 1%, below the
2% growth analysts had expected.
Macy's has posted weak results recently as consumers have spent
more of their disposable income on things such as cars, health
care, and electronics.
The company has said it is hopeful that improvements in the
economy, including lower gas prices, falling unemployment and a
healthy stock market will benefit the retailer going forward.
The retailer recently announced plans to change how it stocks
and sells clothing and other items as it responds to a shift in
consumer shopping. Macy's, which started in 1858 as a dry-goods
store on the corner of 14th Street and 6th Avenue in New York City,
is planning to strengthen its e-commerce, open more outlet stores
and is considering off-price retailing, much like T.J. Maxx and
Ross Stores Inc.
The restructuring, which will affect more than 2,000 workers
nationwide, is expected to save the retailer about $140 million a
year, starting in 2015, and result in about $100 million to $120
million in charges in the fourth quarter of 2014.
In the latest quarter, sales excluding newly opened or closed
stores grew 2% in the period. When licensed departments are
included, sales were up 2.5%.
Overall for the quarter ended Jan. 31, profit fell to $793
million, or $2.26 a share, from $811 million, or $2.16 a share, a
year earlier. Excluding restructuring and store closing charges,
among other items, per-share earnings were $2.44.
Revenue ticked up 1.8% to $9.36 billion.
Analysts polled by Thomson Reuters had expected $2.40 a share in
earnings and $9.4 billion in revenue.
Gross margin in the current quarter edged down to 40.3% from
40.6% a year earlier.
Write to Chelsey Dulaney at chelsey.dulaney@wsj.com
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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