NEW YORK: Macy’s Inc. sent out a mixed message: It raised its annual profit guidance but told investors Wednesday that Superstorm Sandy would temper the start of the holiday season.
The department store chain’s fourth-quarter profit forecast was below analysts’ expectations and noted that this month’s business would be negatively affected by Sandy. That puts more pressure on December and January to achieve sales goals.
The guidance came as Macy’s posted a 4.3 percent increase in third-quarter net income, helped by its efforts to tailor merchandise to local markets and bring in trendy exclusive brands.
“Were it not for Hurricane Sandy, we would be even more optimistic about the fourth quarter than what you’re hearing today,” Karen Hoguet, Macy’s chief financial officer, told investors during a call. The company closed the book on the third quarter two days before Sandy steamed through the densely populated Mid-Atlantic and Northeast regions.
As a result of Sandy, Macy’s extended a sale for customers living in the hard-hit region and was issuing coupons on home goods for those who’ve experienced damage to their homes.
The company temporarily closed 200 stores at one point last week because of Sandy.
Macy’s Inc., a standout among its peers throughout the economic recovery, is the first of the major retailers to report third-quarter results that should provide insight into Americans’ mindset heading into the crucial holiday season.
The fear: Consumers who are now being forced to buy cleanup supplies and pay for expensive repairs in the aftermath of the storm may feel less inclined to spend for the holidays. The storm hit a densely packed region, which accounts for about 24 percent of total U.S. retail sales excluding autos, according to MasterCard Advisors’ SpendingPulse.
Macy’s will again be opening its doors at midnight following Thanksgiving for the official start of the holiday season.
Macy’s Inc. earned $145 million, or 36 cents per share, for the three-month period that ended Oct. 27. That compares with $139 million, or 32 cents per share, in the year-ago period.
Revenue rose 3.7 percent to $6.07 billion. Revenue at stores open at least a year rose 3.7 percent.