Macy’s lowers forecast, asserts financial health
October 10, 2008,
Cincinnati – Macy’s Inc. today lowered its forecast for the year to $1.30 to $1.50. It had previously expected earnings for share for the year of $1.70 to $1.85.
“If weaker trends continue, same-store sales in the fall season could be down 3% to 6%,” the company said in a statement. Macy’s had originally projected fall season comps down 1%.
Macy’s said its year-to-date cash flow is stronger than anticipated despite the slowing sales. The company said it had approximately $740 million in cash and cash equivalents at the end of September. It has currently has no borrowings until its $2 billion bank credit agreement lead by Bank of America and J.P. Morgan, which is committed through August 2010, according to the statement.
To reduce the need for cash, Macy’s earlier suspended its share repurchase program and reduced capital spending. The company said it has been keeping tight control on inventories and expenses.