Macy's beats 2Q earnings expectations

CINCINNATI Macy's Inc. reported earnings of 2 cents per diluted share for the second quarter of 2009 compared with earnings of 17 cents per diluted share for the second quarter of 2008. According to the company, these results include restructuring charges of $34 million ($77 million after tax; 18 cents per share) related to division consolidations and localization initiatives announced in February. Excluding these charges, the company earned 20 cents per diluted share in the second quarter of 2009. This exceeds recent guidance for earnings of 15 to 17 cents per diluted share, excluding restructuring costs.

"We were able to exceed our expectations with strong earnings and cash flow in the second quarter, despite lower sales in an economic environment that continues to be very difficult," said Terry Lundgren, Macy's Inc. chairman, president and chief executive officer. "In particular, we successfully lowered inventories and managed expenses to align more closely with current levels of business. Our second quarter same-store sales performed as well as or better than most department store retailers even while we were completing the largest organizational transition in Macy's recent history. Most of that transition work is behind us now.

Sales in the second quarter totaled $5.164 billion, down 9.7% from total sales of $5.718 billion in the second quarter of 2008. On a same-store basis, Macy's Inc.'s second-quarter sales were down 9.5%.

Online sales (macys.com and bloomingdales.com combined) were up 9.4% in the second quarter.

The company expects same-store sales in the second half of fiscal 2009 to be in the range of down 5% to 6%. This would result in full-year 2009 same-store sales to be down between 7% and 7.5% -- within the original guidance for fiscal 2009 same-store sales to be down between 6% and 8%.

Macy's Inc. now is projecting that fiscal 2009 earnings per share on a diluted basis will be 70 cents to 80 cents per share, excluding restructuring-related costs. This is an increase from previous guidance (provided in February) for 40 cents to 55 cents per diluted share on the same basis.