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UPDATE 3-Macy's posts lower profit, cuts full-year outlook

Wed Aug 13, 2008 11:30pm IST
 
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(Adds conference call comments, analyst, Commerce Dept. report)

By Sarah Coffey

NEW YORK, Aug 13 (Reuters) - Macy's Inc (M.N: Quote, Profile, Research) reported a 1.4 percent decline in quarterly profit and cut its fiscal-year earnings forecast, warning that cutbacks in U.S. consumer spending could push sales down further at its stores.

The department store operator said it expected a profit of $1.70 to $1.85 per share before one-time items for the year, down from its outlook of $1.85 to $2.15 in May. Analysts on average had expected $1.85, according to Reuters Estimates.

Analysts said the reduced outlook is more in-line with expectations as investors were skeptical Macy's could meet the upper end of its prior guidance.

Macy's said it is "hopeful" it will come in at the high end of its outlook, but Chief Financial Officer Karen Hoguet cautioned "we are not ignoring the risk that so many of you have pointed out," as the company continues to tightly manage vendor and operational costs.

Macy's, also home to the upscale Bloomingdale's chain, said it expected fall sales at stores open at least one year to be flat to down 1 percent, resulting in a decline of 1 percent to 1.6 percent for the full year.

The company's shares fell as much as 2 percent, but analysts said the outlook was not as bad as some investors had feared.

"Investors were expecting worse. The stock has been trading considerably weaker than peers," said Edward Jones retail analyst Stephanie Hoff, who has a "buy" rating on the stock.  Continued...

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