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May 13, 2015
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Macy's profit misses estimates on strong dollar, port strike

By
Reuters
Published
May 13, 2015

Macy's Inc reported a lower-than-expected quarterly profit due to a strong dollar that hurt foreign tourist spending in the United States, colder-than-usual weather in February and disruptions at West Coast ports that held up imports.

The company's shares were down 2.4 percent at $63.75 in premarket trading on Wednesday.

Macy's, which operates the upscale Bloomingdale's chain as well as its namesake stores, also said it increased its share repurchase program by $1.5 billion, bringing the total outstanding authorization to about $2.1 billion.

It raised its quarterly dividend to 36 cents per share from 31.25 cents.
Tourist spending at Macy's and Bloomingdale's stores in New York City, Chicago, Las Vegas and other cities were down in double digits in percentage terms, Chief Financial Officer Karen Hoguet said on a call with analysts.

She estimates that roughly 5 percent of the company's annual sales came from international tourists.

Macy's said in February that about 12 percent of its first-quarter merchandise was being delayed due to the strike in West Coast ports, and this would hurt sales, gross margin, and expenses in the first few months of the year.
Same-store sales, including licensed departments, fell 0.1 percent. Analysts were expecting it to rise 1 percent, according to research firm Consensus Metrix.

Macy's is moving into off-price retailing as it tries to attract bargain-hungry shoppers who are not its traditional customer base.

The company said this month it will open four pilot off-price stores, averaging about 30,000 square feet, in fall 2015 in New York, with one testing a cafe concept.

The department store operator's net income fell to $193 million, or 56 cents per share, in the first quarter ended May 2 from $224 million, or 60 cents per share, a year earlier.

Net sales fell 0.7 percent to $6.23 billion.

Analysts on average had expected earnings of 62 cents per share on revenue of $6.32 billion, according to Thomson Reuters I/B/E/S.

Up to Tuesday's close, the company's shares had gained 14 percent in the last 12 months.

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