Macy’s ups 4Q outlook, plans to freeze pension
Posted at: 02/07/2013 8:08 AM
(AP) CINCINNATI - Macy’s is raising its fourth-quarter adjusted earnings forecast due to its strong performance in January. The department store chain is also planning to freeze its pension and executive retirement plans in an effort to better manage rising costs.
Its stock gained more than 2 percent in Thursday morning trading.
Macy’s Inc., which runs Bloomingdale’s and its namesake stores, said revenue at stores open at least a year, a key gauge of a retailer’s performance, rose 11.7 percent in January. This handily topped the 6.4 percent increase analysts polled by Thomson Reuters expected.
Revenue at stores open at least a year excludes results from stores recently opened or closed.
Chairman, President and CEO Terry Lundgren said in a statement that Macy’s January sales were helped by putting more new fashion items into its stores for post-holiday shoppers.
Total revenue for the five weeks ended Feb. 2 rose 34.6 percent to $1.8 billion. Online sales for the month jumped 48.9 percent.
Macy’s now foresees quarterly earnings between $1.94 and $1.99 per share, up from a range of $1.91 to $1.96 per share. The company said that it was basically returning to an earnings outlook that it previously gave in November. Analysts surveyed by FactSet expect earnings of $1.96 per share.
Quarterly revenue climbed 7 percent to $9.35 billion, topping the average analyst estimate of $9.29 billion, as online sales surged 47.7 percent. Revenue at stores open at least a year was up 3.9 percent.
Fiscal 2012 revenue climbed 4.9 percent to $27.69 billion. Revenue at stores open at least a year rose 3.7 percent, and online sales increased 41 percent.
Macy’s said that benefits payable under its existing pension and executive retirement plans will be fixed at current levels, effective Dec. 31. Starting in 2014, the retailer’s matching contributions under its 401(k) plan will increase and a new defined contribution plan similar to the 401(k) plan will begin.
Macy’s, which has corporate offices in New York and Cincinnati, will report its fourth-quarter financial results on Feb. 26. It runs about 840 department stores in 45 states, the District of Columbia, Guam and Puerto Rico.
The company’s stock added $1.02, or 2.6 percent, to $40.50 in early trading. The shares have traded in a 52-week range of $32.31 to $42.17.
(Copyright 2013 by The Associated Press. All Rights Reserved.)