Macy’s loss less than forecast

CINCINNATI — Despite a $59-million loss and a slump in sales in the first quarter, Macy’s Inc. on Wednesday posted results that beat Wall Street expectations because of what analysts said were tight controls on expenses and inventories.

The loss resulted from lower sales and the cost of consolidating business units, Macy’s said.

Losses totaled 14 cents a share in the three months ended May 3, compared with a profit of $36 million, or 8 cents, a year earlier, Macy’s said.

Revenue was $5.75 billion, down from $5.92 billion a year ago.

Macy’s booked a $55-million after-tax charge, or 13 cents a share, for the restructuring that the retailer said should start saving money next year.

Macy’s also set aside $14 million after tax, or 3 cents a share, for a potential settlement of a wage and hour class-action lawsuit in California.

Stripping out unusual charges, earnings from continuing operations were 2 cents a share, Macy’s said.

Analysts polled by Thomson Financial forecast a loss of 2 cents a share on revenue of $5.6 billion. Analyst forecasts typically exclude one-time charges and gains.

Macy’s shares rose 87 cents, or 3.6%, to $24.93.

Goldman Sachs analyst Adrianne Shapira said Macy’s delivered the better-than-expected results “primarily as a result of leaner inventory levels and tight expense control.”

Sales at stores open at least a year -- considered a key indicator of a retailer’s success -- fell 2.6% in the quarter but were not as bad as Kohl’s Corp.’s 6.7% decrease and drops of 7.4% for J.C. Penney Co. and 6.5% for Nordstrom Inc.

Macy’s has struggled with disappointing sales and resistance from shoppers in some markets where the Macy’s name replaced local favorites after it bought department store operator May Department Stores Co. in 2005.