EARNINGS : Macy Loses $72.3 Million, Expects Modest Christmas

R. H. Macy & Co. said Friday that it lost $72.3 million in the recent quarter despite efforts to trim inventories and lure customers, and the giant retailer predicted a less-than-buoyant Christmas season.

The loss for the final fiscal quarter ended Aug. 3 was 10% less than an $80-million shortfall in the year-ago period but was still weaker than expected.

Sales totaled $1.63 billion, roughly equivalent to the 1990 period.

Macy is one of the biggest and best-known American merchants, and its performance is considered an important indicator of the state of U.S. retailing. The company doesn’t report per-share results because it is privately owned.

For the fiscal year, the retailer lost $150.2 million on sales of $6.76 billion. That compares to a loss of $215.3 million on sales of $7.27 billion the previous fiscal year.

In a letter to investors, Macy Chairman and Chief Executive Edward Finkelstein called the results disappointing despite the difficult economic climate.

He noted that the retailer took significant steps to pay down debt incurred in its $3.74-billion takeover in 1986. In the recent fiscal year, Macy reduced the face amount of its debt by about $2 billion, partly through the sale of its credit card operations to GE Capital Corp., which raised more than $200 million.

The New York company reduced interest expenses by $80 million in the last fiscal year; interest expense is expected to total $520 million for the current year.

Finkelstein said the company’s marketing campaign has begun to show results. He said comparable-store sales rose 1.7% in August and 4.2% in September, reversing a declining trend during the first three quarters.

Analysts consider sales from stores open at least a year--known as comparable-store sales--a more accurate assessment of a retailer’s performance. New stores tend to have extraordinarily strong sales that can skew a retailer’s results.

Finkelstein said he expects additional sales gains in October, but he warned that this should not be construed as “a fundamental shift in consumer confidence” or a precursor to a buoyant holiday shopping season. To the contrary, he said, Macy is carefully managing inventories and expenses to weather what it projects to be a lackluster Christmas.

In addition to its Macy stores, the company owns the Bullock’s and I. Magnin stores on the West Coast. All told, it runs 144 department stores as well as several specialty store chains stocked with private-label clothing.