Macy's Swings To Third Quarter Loss

A family walks into a Macy's store in San Jose, Calif. on Aug. 12, 2008.
Department store operator Macy's Inc. swung to a loss in the third quarter as sales dropped 7 percent amid a slowdown in consumer spending and a deteriorating economy.

Still, the Cincinnati-based chain reiterated its earnings outlook, adding they would be at the lower end if current sales trends continue.

Macy's said it lost $44 million, or 10 cents per share, in the quarter, after a profit of $33 million, or 8 cents per share, a year earlier.

Excluding costs related to the consolidation of three regional divisions that totaled $16 million - $10 million after tax or 2 cents per share - the third-quarter 2008 loss was 8 cents per share.

The company said sales fell to $5.49 billion in the quarter from $5.9 billion a year earlier. Analysts surveyed by Thomson Reuters expected, on average, a loss of 19 cents on $5.49 billion in sales.

"Macy's Inc. remains financially healthy, with strong cash flow, a solid balance sheet and ample borrowing capacity. We are committed to continuing to aggressively manage expenses and inventories consistent with planned sales levels," said Terry J. Lundgren, chairman, president and chief executive in a statement.

Macy's expects earnings in the range of $1.30 to $1.50 per share this year, and $1.10 to $1.30 per share in the fourth quarter. Analysts surveyed by Thomson Reuters forecast $1.37 per share for the year, and $1.24 per share in the fourth quarter.