NEW YORK (AP) — Macy's reported a fourth-quarter profit that beat Wall Street expectations as its strategy of tailoring merchandise to local markets paid off during the holiday season.
The department store chain, which also operates the upscale Bloomingdale's stores, also said Tuesday that it expects that same game plan to help increase revenue at stores open at least a year by 3.5 percent in fiscal 2013. That's on top of the increase of 3.7 percent for 2012. The measure is a key indicator of health because it strips out the impact of newly opened and closed locations.
"Going into 2013, our team is moving ahead with new plans and actions to sharpen our approach to localized merchandise assortments and marketing," CEO Terry Lundgren said in a statement.
Like many retailers, Macy's had a slow start to the fourth quarter because of the lingering effects of Superstorm Sandy and ongoing economic uncertainty. But sales bounced back in January. Gross margin, or revenue after the cost of sales, slipped to 40.6 percent during the quarter, from 41 percent a year earlier, suggesting the company may have had to discount more heavily to sell items.
Meanwhile, rival J.C. Penney is expected to report its fourth straight quarter of big losses and declining sales on Wednesday. The company has been reeling since it abandoned hundreds of sales last year in favor of "everyday pricing," with shoppers fleeing to competitors.
When asked about how J.C. Penney's missteps helped Macy's, Chief Financial Officer Karen Hoguet said, "As you know it's obviously helped us" in 2012. But she also added that the overlap in customers between Macy's and J.C. Penney isn't "100 percent."
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