Macy’s ups outlook as Q2 profit beats estimates

Cincinnati Macy's posted a better-than-expected quarterly profit on Wednesday as it cut costs in the recession. The chain increased its annual earnings outlook as a companywide consolidation and cost-cutting efforts deliver dividends.

Macy's earned $7 million in the quarter ended Aug. 1, compared with $73 million in same period last year.

"Our unified organizational structure is settling in and working well," said Terry J. Lundgren, Macy's chairman, president and chief executive, in a statement. "It has allowed us to streamline decision-making and build closer relationship with our key vendor resources."

But excluding restructuring charges of $34 million, or 18 cents per share, related to division consolidations and initiatives to localize merchandising to regional markets, the company earned 20 cents per share. That well exceeded the 15 cents projected by analysts surveyed by Thomson Reuters.

Revenues were $5.16 billion, down 9.7% from a year ago, slightly below analysts' forecasts of $5.18 billion. Same-store sales fell 9.5%.

“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,” Lundgren said.