Macy’s Q4 Sales Down Slightly But Exceed Expectations

Macy’s reported improved fourth quarter results that exceeded expectations and represented a strong ending to the fiscal year, company officials said. In addition, the department store chain provided initial guidance that anticipates further improvement in sales and earnings in 2010.

“Our company initiated unprecedented change in 2009 as we adopted a unified organization structure and rolled out our My Macy’s localization strategy amid the worst economic environment in decades,” said Terry Lundgren, chairman, president and CEO of Macy’s Inc. “Despite these obstacles, we improved our profitability over the previous year through better-than-expected sales, improved gross margins and reduced expenses. We also continued to generate significant cash flow and ended the year with cash on hand of more than $1.6 billion after reducing debt by more than $950 million in 2010.”

Sales in the fourth quarter of 2009 totaled $7.849 billion, a decrease of 1.1%, compared with sales of $7.934 billion in the same period last year. On a same-store basis, Macy’s, Inc.’s fourth quarter sales were down 0.8%. This is better than the company’s guidance for fourth quarter sales to be down between 1% and 2%.

The company’s total sales for the 52 weeks of fiscal 2009 totaled $23.489 billion, down 5.6% from total sales of $24.892 billion in fiscal 2008. On a same-store basis, Macy’s, Inc.’s fiscal 2009 sales were down 5.3%. This is better than initial guidance, provided at the beginning of the year, for sales to be down between 6% and 8% in 2009.

Online sales (macys.com and bloomingdales.com combined) were up 26.6% in the fourth quarter and 19.6% for fiscal 2009 compared with the same fiscal 2008 periods. Online sales positively affected the company’s same-store sales by 0.7% points in the fourth quarter and 0.6% points in fiscal 2009 as a whole.