Macy's reports loss on weak sales, restructuring

CINCINNATI -- Macy's Inc. said Wednesday that it lost $59 million in the first quarter because of lower sales and the cost of consolidating business units, which should save money starting next year.

Losses totaled 14 cents a share in the three months ended March 31, compared with a profit of $36 million, or 8 cents a share, in the same quarter a year ago, Macy's said. Revenue was $5.75 billion, down from $5.92 billion a year ago.

Macy's booked a $55 million after-tax charge, or 13 cents a share, for the restructuring. Macy's also set aside $14 million after tax, or 3 cents per share, for a potential settlement of a wage and hour class-action lawsuit in California.

Without the unusual items, earnings from continuing operations were 2 cents a share, Macy's said.

Analysts polled by Thomson Financial forecast a loss of 2 cents a share on revenue of $5.6 billion. Analyst forecasts typically exclude one-time charges and gains.

Shares jumped 6.8 percent, or $1.64, to $25.70 in premarket trading.

"Given the very difficult economic environment, our company performed relatively well compared to the competition in the first quarter," said Terry J. Lundgren, chairman, president and chief executive.

Macy's has struggled with disappointing sales and resistance from shoppers in some markets where the Macy's name replaced local favorites after it bought department store operator May Co. in 2005.

Macy's announced in February that it would combine three regional divisions and cut about 2,300 management jobs to better tailor individual stores to customer needs.

"As we begin implementation of new My Macy's localization initiatives across the country, we are optimistic that our plans for tailored assortments and an improved shopping experience in every location will further enhance our store-level execution," Lundgren said.