Macy's Inc. reports earnings decline

CINCINNATI Macy's Inc. today reported earnings of 16 cents per diluted share for the second quarter of 2007, ended Aug. 4. This compares with diluted earnings per share from continuing operations of 51 cents for the same 13-week period last year.

For the first half of 2007, Macy's Inc. reported diluted earnings per share from continuing operations of 27 cents per share, compared with 37 cents per share in the first half of 2006.

Terry Lundgren, Macy's Inc. chairman, president and ceo, said, "While the second quarter was below our initial expectations, we did see improving sales trends through the quarter in former May Company stores and in home-related merchandise categories. We are optimistic that our business can and will improve in the second half of the year, despite what appears to be a more challenging economic environment."

Sales in the second quarter totaled $5.892 billion, a decrease of 1.7% compared to sales of $5.995 billion in the same period last year. On a same-store basis, Macy's Inc.'s second quarter sales were down 2.6%.

For the year to date, Macy's Inc.'s sales totaled $11.813 billion, down 0.9% from total sales of $11.925 billion in the first 26 weeks of 2006. On a same-store basis, Macy's Inc.'s year-to-date sales were down 1.1%.

Macy's Inc. expects same-store sales in the range of down 1% to up 1% in the third quarter of 2007, and flat to up 2% in the fourth quarter of 2007. For fiscal 2007 as a whole, same-store sales are expected in the range of down 1 percent to up 0.5%.

Total sales are expected to be $5.9 billion to $6 billion in the third quarter of 2007 and $8.8 billion to $9 billion in the fourth quarter of 2007. For fiscal 2007 as a whole, total sales are expected to be $26.5 billion to $26.8 billion.

Earnings per diluted share, excluding merger integration costs, are expected to be 5 cents to 10 cents in the third quarter and $1.70 to $1.80 in the fourth quarter. For fiscal 2007 as a whole, earnings per diluted share from continuing operations, excluding merger integration costs, are expected to be $2.15 to $2.30. Merger integration costs for the year are now expected to total between $150 million and $160 million.