Macy's Backs FY13 EPS Outlook; To Lay Off 2,500 Employees

(RTTNews) - Macy's, Inc. (M) announced that its comparable sales including licensed departments rose by 4.3 percent in the 2013 holiday shopping season in the months of November and December. November/December 2013 comparable sales were up 3.6 percent.

Macy's, Inc. is narrowing the range of its guidance for comparable sales growth in the second half of 2013 to a range of 2.8 percent to 2.9 percent from previous guidance of up between 2.5 percent and 4 percent which calculates to guidance for comparable sales in the fourth quarter to grow by approximately 2.3 percent to 2.5 percent, and for full-year 2013 sales to grow by 2.2 percent to 2.3 percent.

Earlier, the company expected comparable sales to increase in the range of 2.5 percent to 4 percent in the second half of 2013, and in the range of 2 percent to 2.9 percent for the full year.

The company said it is maintaining its full-year 2013 earnings guidance in the range of $3.80 to $3.90 per share. Twenty-one analysts project annual earnings of $3.87 per share.

Macy's, Inc. said it currently expects 2014 comparable sales to increase in the range of 2.5 percent to 3 percent compared with 2013 levels and earnings per share are expected in the range of $4.40 to $4.50. Analysts currently expect earnings of $4.32 per share.

Separately, the company said it will implement focused cost reductions, including organizational changes, as it prepares to sustain profitable sales growth in the years ahead.

The company stated that about 2,500 employees are expected to be laid off and are eligible for severance as a result of these organizational changes.

The company announced that it will close five Macy's stores in early spring 2014.

Changes being announced are estimated to generate savings of approximately $100 million per year, beginning in 2014.

The company noted that in conjunction with the implementation of these cost reductions, as well as of store closings and asset impairment charges, an estimated $120 million to $135 million of charges, of which $50 million to $55 million is expected to be non-cash, will be booked in the fourth quarter of 2013.