Macy’s maintains outlook for full year, disappointing Wall Street

NEW YORK, Wed May 9, 2012 – Macy’s Inc. kept its full-year profit forecast despite reporting better-than-expected first-quarter earnings on Wednesday, disappointing Wall Street and putting pressure on the retailer’s shares.

Macy’s, which also owns the upscale Bloomingdale’s chain, has handily outperformed its mid-tier competitors in the last year, winning shoppers away from chains such as J.C. Penney Co. Inc. and Kohl’s Corp.

CFO Karen Hoguet told analysts on a conference call that Macy’s has seen an uptick in sales in areas where a store competes directly with Penney, which in February implemented a new pricing strategy that largely gets rid of sales events. Analysts have said such changes would hurt Penney at least initially.

Macy’s often raises its full-year profit forecast after reporting such strong numbers.

When Barclays Capital analyst Robert Drbul asked Hoguet why the company had not done so this time, she said the “guidance for the year was more aggressive than usual.”

Macy’s gross profit margin edged down in the first quarter, largely because of shipping costs linked to its rising Internet sales. Sales growth in April, which had been expected to be weaker than in March because of an early Easter, came in below what Wall Street was expecting.

Morningstar analyst Paul Swinand said that Macy’s long winning streak may have led analysts to get ahead of themselves.

Macy’s shares last week rose to $42.17, their highest level since July 2007, making them vulnerable to a sell-off. On Wednesday morning, the shares fell as much as 6.3 percent to $37.02 on the New York Stock Exchange before paring some of those losses to be down 3.4 percent to $38.18 in early afternoon trading.

Procter & Gamble cuts outlook for year; restructuring under way

CINCINNATI, Fri Apr 27, 2012 – Procter & Gamble Co. lowered its profit expectations for the year on Friday as it works on its new restructuring plan and continues to feel some pressure from higher commodity costs.

Shares of P&G fell 2 percent to $65.55 in premarket trading.

The world’s largest household products maker posted a lower quarterly profit, weighed down by charges for its restructuring, which calls for eliminating 5,700 nonmanufacturing jobs and cutting $10 billion in costs by the end of fiscal 2016.

The maker of Pampers diapers and Gillette razors earned $2.41 billion, or 82 cents per share, in the third quarter ended in March, compared with $2.87 billion, or 96 cents per share, a year earlier.

Core earnings per share, which exclude items such as restructuring charges, were flat at 94 cents. The results topped analysts’ expectations of 93 cents, according to Thomson Reuters I/B/E/S.

Sales rose 2 percent to $20.19 billion.

P&G said it now expected to post core earnings per share of $3.82 to $3.88 this year. Back in February, it had forecast $3.93 to $4.03 for the year ending in June.

P&G outlined its restructuring plan in February.