Macy’s, Inc. had total sales of $4.397 billion for the five weeks ended Jan. 3, 2009, a decrease of 4.7% compared with total sales of $4.614 billion in the five weeks ended Jan. 5, 2008. On a same-store basis, Macy’s, Inc. sales were down 4.0% in December. Same-store sales for the combined November-December period were down 7.5%.

For the year to date, Macy’s, Inc. sales totaled $23.679 billion, down 5.4% from total sales of $25.040 billion in the first 48 weeks of fiscal 2007. On a same-store basis, Macy’s, Inc.’s year-to-date sales were down 4.6%.

“The holiday shopping season ended with strong sales in the fourth and fifth weeks of December after a slow start to the month and unfavorable weather conditions in the Northeast, Midwest and Pacific Northwest,” said Terry J. Lundgren, Macy’s, Inc. chairman, president and CEO. “This has been the most challenging economic environment in memory, and I am proud of our organization for staying focused on delivering a compelling combination of value and fashion to customers who were shopping cautiously. We went into the fourth quarter with an objective of reducing inventory levels to position us for 2009. We are pleased to have accomplished that objective with approximately 7.5% lower inventory on a comparable store basis at the end of December compared with last year.

“We are especially encouraged by our holiday season sales performance in My Macy’s pilot districts, where we have been working to tailor store assortments, service levels and the shopping environment to local customer needs and preferences. Of our top 15 best-performing geographic markets in December, 13 were My Macy’s pilot districts,” Lundgren said.

Online sales (macys.com and bloomingdales.com combined) were up by 39.1% in December, by 26.0% in the November-December period, and by 30.1% for the year to date. Online sales are included in the same-store sales calculation for Macy’s, Inc.

The company expects to end the fourth quarter with more than $1 billion in cash on hand and no borrowings against its $2 billion bank credit agreement.

The company said that same-store sales in the fourth quarter (the months of November through January) will be down approximately 7.5%, consistent with the November-December trend. This compares with previous guidance for same-store sales to be down between 1% and 6% for the fourth quarter. Achieving sales and inventory-reduction results required incremental markdowns that will result in a lower gross margin rate for the fourth quarter. As a result, the company currently expects earnings per share on a diluted basis in the range of 90 cents to $1.00 in the fourth quarter, excluding one-time costs associated with consolidations announced earlier in the year and store closings announced today, compared with previous guidance of $1.10 to $1.30 per diluted share on the same basis. For fiscal 2008 as a whole, current guidance is for earnings per share on a diluted basis of $1.10 to $1.20, excluding previously announced asset impairment charges and costs mentioned above, compared with previous guidance of $1.30 to $1.50 per diluted share on the same basis.

 

Macy's Closes 11 Stores

Macy’s, Inc. also announced plans to close 11 of its underperforming stores.


Final clearance sales at these stores will begin within the next week (with the exception of the Hawaii location, which will not hold a final clearance sale).


“These closings are part of our normal-course process to prune underperforming locations each year in order to maintain a healthy portfolio of stores,” said Terry J. Lundgren, chairman, president and CEO of Macy’s, Inc. “While new store growth has slowed in the current economy, our long-term strategy is to continue to selectively add new stores while closing those that are underperforming.”

 

Costs associated with these 11 store closings will be approximately $65 million (of which approximately $12 million will be cash), most of which will be booked in the fourth quarter of 2008.