Macy's sees deeper drop in sales than forecasted

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Macy's sees deeper drop in sales than forecasted

October 10, 2008

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Cincinnati--Same-store sales at Macy's Inc. have decreased 5.8 percent for the third quarter to date (August and September sales combined), and 3.2 percent for the year to date, representing a weakening from sales earlier in the year, the company announced on Friday.

If weaker sales trends continue, the company says, same-store sales for the fall season could be down 3 percent to 6 percent, when previous guidance suggested that same-store sales for the fall season would be flat to down 1 percent.

The company noted that with the uncertain direction of the economy, predictions of future performance remain difficult.

Macy's continues to be financially healthy, however, and year-to-date cash flow is stronger than anticipated at the beginning of the year, despite lower sales, the company said.

Through a combination of initiatives--including the suspension of Macy's share-repurchase program, reduced capital spending and disciplined management of inventories and expenses--the company's need for cash has been reduced.

"We are continuing to manage our business well in this tough economic environment, while simultaneously offering customers exciting fashion product and great value," Macy's Chairman, President and Chief Executive Officer Terry J. Lundgren said in a media release. "We expect this will result in sales performance that continues to outpace key competitors, as we have done throughout the year-to-date period."

Macy's Inc., with corporate offices in Cincinnati and New York, is one of the nation's premier retailers, with fiscal 2007 sales of $26.3 billion. The company operates more than 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names of Macy's and Bloomingdale's. The company also operates Macys.com, Bloomingdales.com and Bloomingdale's By Mail.

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