Macy’s Q1 loss beats expectations

Cincinnati Macy's reported a wider loss for the first quarter on Wednesday as the department store operator's results were hurt by restructuring charges and the ongoing pullback in discretionary spending. But its loss was still less than analysts had predicted.

The chain posted a loss of $88 million for the period ended May 2, compared with a loss of $59 million a year earlier. The results included restructuring charges of $138 million related to the consolidation of divisions and initiatives to tailor merchandise to local markets announced in February.

Revenues fell to $5.12 billion from $5.74 billion a year ago. Analysts were expecting sales of $5.2 billion.

Macy's chairman, president and chief executive Terry J. Lundgren said in a statement that the company expects its consolidation efforts to lead to about $400 million in expense savings each year beginning in 2010, after $250 million in the partial year of 2009.

The chain also expects to see an improvement in sales from its localization efforts beginning in fourth quarter 2009, and particularly in spring 2010. The plans included the closure of two of Macy’s geographic divisions and the consolidation of their operations into its corporate offices in Cincinnati and New York City.