NEW YORK, N.Y. - Macy's Inc.'s fourth-quarter profit rose 11 per cent, but the department store chain suffered a sales shortfall because a string of winter storms chilled business in January.
The results, released Tuesday, come on the heels of a solid but fiercely competitive holiday shopping season for the Cincinnati-based company, which also operates Bloomingdale's stores. The chain has been a standout among its peers throughout the economic recovery as it has benefited from its moves to tailor merchandise to local markets.
But like other retailers, severe winter storms have caused Macy's to close stores and kept shoppers at home. At one time during January, 244 Macy's and Bloomingdale's stores, or about 30 per cent of the company's total, were shut down because of the weather. Business remained sluggish until Valentine's Day.
The company stuck with its annual profit and sales forecast on hopes that business will bounce back in the spring. Its stock rose 5 per cent in late morning trading.
"Once warm spring weather arrives and our full assortment of fresh spring merchandise is in place, we believe customers will return to a more normalized pattern of shopping," Terry Lundgren, Macy's chairman, CEO and president, said in a statement.
Like other retailers, Macy's is also dealing with cautious shoppers and trying to respond to shoppers' shift toward buying online. For example, the retailer is rolling out a service that allows shoppers to buy online and pick up the items at a store.
Last month, the company announced it was cutting jobs as part of a reorganization to sustain profitability. But its workforce will remain level at about 175,000 as the company adds new positions in areas related to online shopping.
Macy's laid off 1,800 employees, below the original estimate of 2,500 because it was able to place more of its workers in new jobs than anticipated, Karen Hoguet, Macy's chief financial officer, told investors in a conference call Tuesday.
The department store chain said it earned $811 million, or $2.16 per share, in the three months that ended Feb. 1. That compares with $730 million, or $1.83 per share, a year earlier.
Excluding items related to closing some stores and other cost-reduction strategies, the company earned $2.31 per share in the latest quarter.
Revenue slipped 1.6 per cent to $9.2 billion.
Analysts were expecting $2.17 per share on revenue of $9.28 billion, according to FactSet.
Revenue at stores open at least a year rose 1.4 per cent, below the 2.5 per cent increase that Wall Street analysts expected.
For November and December combined, the traditional holiday shopping season, revenue at stores open at least a year rose 4.3 per cent. The figure includes sales from departments licensed to third parties like Finish Line.
Macy's reiterated that revenue at stores opened at least a year for the current year is expected to be up in the range of 2.5 per cent to 3 per cent. It also stuck with its earnings forecast of $4.40 to $4.50 per share for the year.
Analysts had expected $4.45 per share for the current fiscal year, according to FactSet.
Macy's shares rose $2.65 to $55.71 in late morning trading..
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