Macy’s, Inc. reported Wednesday that sales in the first quarter totaled $5.74 billion, a decrease of 2.9 percent compared to sales of $5.92 billion in the same period last year. On a same-store sales for the quarter ended May 3 were down 2.6 percent.
Macy’s, Inc.’s operating income for the first quarter totaled $30 million or 0.5 percent of sales for the quarter, compared with operating income of $208 million or 3.5 percent of sales for the same period in the prior year. Macy’s, Inc.’s operating income for the period included $87 million in division consolidation costs and a $23 million reserve for the potential litigation settlement. Excluding these costs, operating income for the first quarter of 2008 was $140 million or 2.4 percent of sales.
Net cash provided by continuing operating activities was $21 million in the first quarter of 2008, compared with $370 million of cash used by continuing operating activities in the first quarter last year. Net cash used by continuing investing activities in the first quarter of 2008 was $99 million, compared with $31 million a year ago. Net cash used by continuing financing activities was $139 million in the first quarter of 2008, compared with $309 million in the first quarter last year.
“Given the very difficult economic environment, our company performed relatively well compared to the competition in the first quarter. Macy’s, Inc.’s same-store sales for the quarter, while below last year, were significantly better than most of our largest competitors, continuing a trend from the fourth quarter of 2007. This indicates that customers are preferring Macy’s and we appear to be capturing market share even in this period of weak consumer spending,” said Terry J. Lundgren, Macy’s, Inc. chairman, president, and chief executive officer. “We are running the business with discipline given the weakened level of consumer confidence, as demonstrated by inventory levels at the end of the quarter that were about 4 percent below a year ago. And as we begin implementation of new My Macy’s localization initiatives across the country, we are optimistic that our plans for tailored assortments and an improved shopping experience in every location will further enhance our store-level execution.”
The company repurchased no shares of its common stock in the first quarter of 2008 and said it anticipates no share repurchases for the remainder of fiscal 2008. As of May 3, the company had remaining authorization to repurchase up to $850 million of its common stock.
For the quarter, the company opened a new Macy’s store in Westminster, Col., and closed a Macy’s store in Memphis, Tenn., and a Macy’s furniture store in Richmond, Va.
The company said same-store sales in fiscal 2008 will be in the range of down 1 percent to up 1.5 percent. The company expects to book approximately $60 million in division consolidation costs in the final three quarters of 2008.
Macy’s, Inc., with corporate offices in Cincinnati and New York, operates more than 850 department stores in 45 states, the District of Columbia, Guam, and Puerto Rico under the names of Macy’s and Bloomingdale’s. The company also operates macys.com, bloomingdales.com and Bloomingdale’s By Mail.