Consolidation costs still stifling Macy’s
By Staff -- Home Textiles Today, 5/14/2008 2:16:00 PM
Cincinnati – Macy’s Inc. reported a loss for the first quarter this morning, but reaffirmed its full-year earnings forecast.
Macy's posted a net loss of $59 million, or 14 cents a share, for the quarter ended May 3, compared with a profit of $36 million, or 8 cents a share, in the year-ago period.
The results were impacted by a cost of 13 cents per share and a reserve of 3 cents per share related to May Co. consolidation costs and a pending lawsuit settlement related to wages, respectively. Barring those items, Macy’s earned 2 cents per share from continuing operations.
Sales fell 2.9% to $5.75 billion, with comps down 2.6%
In terms of product categories, the weakest performers were ready-to-wear and home textiles, cfo Karen Hogue told analysts during today’s quarterly conference call. Overall, the home department is “okay,” she said, with strong sales of mattresses and housewares.
The multi-line Martha Stewart Collection program, launched in fall 2007, “is actually doing very well,” said Hogue. She did not elaborate on the statement, nor did any analyst ask her to.
The $26 billion retailer kept its forecast steady: 2008 comps will be down 1.0% to up 1.5%, with EPS of $1.85 to $2.15, excluding one-time division consolidation costs. After booking $87 million ($55 million after-tax) in division consolidation costs in the first quarter, the company expects to book about $60 million in such costs during the final three quarters of 2008.
