M Macys Inc

By Aisha Al-Muslim 

Macy's Inc. gave a mostly flat outlook for fiscal 2019 as the retailer said it would further streamline its management structure to reduce costs and be faster in responding to changing customer expectations.

The Cincinnati-based company said Tuesday it launched a multiyear productivity program to reinvest in the business. Starting this year, the company expects its restructuring efforts to generate annual savings of $100 million. An initial part of the plan calls for the company to reduce the complexity of its upper-management structure, it said.

Macy's reported that net sales for its latest quarter fell 2.5% to $8.46 billion, above the consensus forecast of $8.45 billion from analysts polled by Refinitiv.

Same-store sales from stores it owns grew 0.4% for the fourth quarter, below the FactSet estimate of a 0.8% increase. Including stores it owns and licensed departments, same-store sales rose 0.7%. Excluding the 53rd week calendar shift, comparable sales were up 2% including licensed departments.

The company recorded a profit of $740 million, or $2.37 a share, down from $1.35 billion, or $4.38 a share, a year earlier. Adjusted earnings were $2.73 a share, above the $2.53 a share analysts polled by Refinitiv were looking for.

Macy's shares rose 0.3% to $24.43 in early trading Tuesday. Shares are down about 11% in the past year.

For fiscal 2019, the company projected that net sales would be roughly flat. The company also expects comparable sales to be flat to up 1%. Excluding settlement charges, impairment and other costs, the company also projected adjusted earnings per share of $3.05 to $3.25, compared with analysts' estimates of $3.29 a share.

In 2019, Macy's said it will focus on improving its supply chain and inventory management, as well as widening its customer base. It plans to do that by expanding its remodeling efforts to another 100 stores and adding off-price Backstage locations to 45 Macy's stores.

The company also said it would continue to invest in categories with strong market share such as dresses, fine jewelry, big-ticket items, men's tailored clothes, women's shoes and beauty, it said.

For fiscal 2018, the company recorded one-time, pretax restructuring charges of about $80 million. However, the anticipated savings is expected to fuel the productivity plan over the next three to five years.

The retailer has been investing in a group of stores it calls magnets, adding new lighting and fixtures and a better assortment of merchandising and technological innovations, while trying to shrink other, less-promising locations.

The company operates about 680 department stores under the Macy's and Bloomingdale's names, and nearly 190 specialty stores that include Bloomingdale's The Outlet, Bluemercury, Macy's Backstage and Story.

Write to Aisha Al-Muslim at aisha.al-muslim@wsj.com

(END) Dow Jones Newswires

February 26, 2019 09:55 ET (14:55 GMT)

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