Macy's Inc. (NYSE: M) is scheduled to report its third quarter earnings on Wednesday, November 11, 2009. Analysts, on average, expect the company to report a net loss of 10 cents per share on revenue of $5.20 billion. In the year ago period, the company reported earnings of 8 cents per share on revenue of $5.49 billion. Macy's, Inc. operates department stores in the United States. Its retail stores and Internet Web sites sells a range of merchandise, including men's, women's, and children's apparel and accessories; cosmetics; home furnishings; and other consumer goods. As of January 31, 2009, it operated approximately 840 retail stores in 45 states, the District of Columbia, Guam, and Puerto Rico under the names Macy's and Bloomingdales.
The Cincinnati, Ohio-based company posted an overall loss of over $4 million for fiscal 2008 ended January 31, 2009, primarily due to the difficult retail environment amid severe economic downturn. The company was hit hard as cash strapped consumers slashed spending on nondiscretionary items such as clothing and accessories, leading to an overall decrease in demand across all price points. The company has tried to attract shoppers through markdowns; however those markdowns have also eroded its profit.
Though there are visible signs of economic recovery, the job market still remains weak. A release by Department of Labor on Friday showed that U.S. employers slashed 192,000 net jobs in October while unemployment rate increased to 10.2%.
In August, Macy reported that its second-quarter net income tumbled to $7 million, or 2 cents per share, from net income of $73 million, or 17 cents per share, in the year-ago period. On an adjusted basis, the company earned 20 cents per share compared to prior year's earnings of $0.29 per share. Quarterly revenue declined 9.7% to $5.16 billion from $5.72 billion. Analysts, on average, expected the company to report earnings of 15 cents per share on revenue of $5.19 billion. On a same-store basis, Macy's second-quarter sales were down 9.5%. Gross margin in the quarter remained flat at 41.5% of total sales.
For full fiscal year 2009, the company expects to report earnings in the range of 70 cents to 80 cents per share, excluding restructuring-related costs. The company's previous adjusted earnings forecast was in the range of 40 cents to 55 cents per share. Further, Macy's expects same-store sales in the second half of fiscal 2009 to be in the range of down 5% to 6%, resulting in fiscal 2009 same-store sales to be down between 7% and 7.5%, within the previous guidance of a drop between 6% and 8%.
Early this month, the company said that its same-store sales decreased 0.8% in October. The department store chain registered a 2.3% decline in same-store sales in September. In August, Macy's posted 8.1% drop in same store sales and 8.5% decline.
Late in October, the company declared a regular quarterly dividend of 5 cents per share on Macy's common stock, payable Jan. 4, 2010, to shareholders of record at the close of business on Dec. 15, 2009.
In terms of stock performance, Macy's shares have gained 75% since the beginning of the year. Shares of the company rose $1.16 or 6.44% to close at $19.18 on Friday.
Disclosure: Author doesn’t own any of the stocks mentioned here.
