CHICAGO (Reuters) - Macy's Inc said on Thursday it will close 11 stores that are performing badly in the recession as it also cut its quarterly profit and sales forecasts due to steep markdowns during the holiday season. On November 28, Chief Executive Terry Lundgren told Reuters that Macy's typically closes as many as 10 underperforming stores a year and expected to do the same in 2009. "These closings are part of our normal-course process to prune underperforming locations each year in order to maintain a healthy portfolio of stores," Lundgren said in a statement on Thursday. Macy's is shutting stores in nine states, including two each in Colorado and Pennsylvania. Shares of Macy's, which also owns the Bloomingdale's chain, were down 0.4 percent at $11.26 after falling as low as $10.75. Macy's sales at stores open at least a year fell 4 percent in December, better than the analysts' average forecast for a 5.3 percent decline, according to Thomson Reuters Estimates. Macy's expects such sales to fall about 7.5 percent in the quarter, which runs from November through January, versus prior expectations for a 1 percent to 6 percent decline. The company plans to record about $65 million in costs due to the store closings, including about $12 million in cash costs. Most of the costs will be booked in the fourth quarter. Macy's expects to earn 90 cents to $1.00 per share in the fourth quarter, excluding certain items, down from its earlier target of $1.10 to $1.30 per share. For the year it forecast earnings of $1.10 to $1.20 per share, excluding items, down from an earlier target of $1.30 to $1.50 per share. Macy's 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. (Reporting by Jessica Wohl in Chicago and Ratul Ray Chaudhuri in Bangalore; Editing by Derek Caney)Macy's to close 11 stores, cuts forecast
Thursday, 8 January 2009
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